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Mario Monti on Trial

Mario Monti, the European Union's Commissioner for Competition Policy, is often in the spotlight, usually to popular acclaim. Over the years, he has won important victories limiting state aid to business, one of Europe's most pernicious economic maladies. Today, however, the benefits derived from his achievements are at risk because of a series of stunning courtroom defeats. With a competition case against software giant Microsoft seemingly in the offing, Commissioner Monti will need to rediscover his footing fast.

Within a period of just a few weeks, the European Court of Justice (to which private parties can appeal decisions made by the Commission) voided three of Monti's decisions rejecting proposed corporate mergers. While the two issues, state aid and private mergers, are in principle separate, losing repeatedly on one battlefield undermines Monti's position elsewhere, particularly the battle against state aid.

The Court's rulings against Monti's decisions are devastating. In the Schneider/Legrand steel merger case, it cites "several obvious errors, omissions and contradictions in the Commission's economic reasoning" as well as a "procedural irregularity which constitutes an infringement of defense rights." The Tetra Laval case saw the Court denounce Monti's "economic analysis of the immediate anti-competitive effects," which it said was "based on insufficient evidence and some errors of assessment."

Finally, in the Airtours merger case, the Court rebuked the competition authorities for "decisions that are vitiated by errors" concerning issues that are "fundamental to any determination of the question of the creation of a collective dominant position." Worsening the injustice, in at least one case the Court's decision came too late for the companies involved to go ahead with their plans.