“Diamonds are Forever”: a Look into the Alrosa Judgment of the Court of First Instance of the European Communities

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Damien Gerard, Jul 31, 2007

On July 11, 2007, the Court of First Instance of the European Communities (CFI) issued two important judgments in the field of competition law, Schneider Electric v. Commission (cf. T-351/03), and Alrosa Company Ltd. v. Commission (cf. T-170/06). The Alrosa ruling received much less press coverage than the Schneider one, although it is no less remarkable. In its decision in Alrosa, (the “Judgment”) the CFI annulled a Commission decision giving legal effect to a commitment by De Beers never to purchase rough diamonds from Alrosa after January 1, 2009. In doing so, it interpreted for the first time a number of substantive and procedural requirements binding on the European Commission when adopting “commitment decisions” pursuant to Article 9 of Regulation 1/2003. In a nutshell, the Judgment confirms that such decisions, which give legal force to commitments offered by undertakings in the course of investigations, must be proportionate to the initial concerns of the Commission. It also establishes that companies that have proposed commitments have a right to understand and comment on the Commission’s reasoning, and to access the Commission’s file, if the Commission rejects their proposed commitments following a formal market testing. Overall, the Judgment sets the stage for the future enforcement of EU competition law by means of “commitment decisions” and will certainly influence the interpretation of those provisions of national competition law modeled after Article 9 of Regulation 1/2003 (“Article 9″). As suggested in Section III below, it might also affect the ongoing debate surrounding the proportionality of merger control remedies, as well as the procedural rights of merging parties, at least potentially.

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