Europe's top antitrust regulator won an important victory yesterday when the European Union's second-highest court, the Court of First Instance, backed its 2001 decision to block GE's $45 billion (€37.51 billion) takeover of Honeywell, the biggest industrial deal ever proposed.
At the time, the European Commission's decision to kill off an all-US deal, even though it had won clearance from US regulators, came under heavy fire from US politicians and businessmen.
Brussels' tough line did much to cement the Commission's reputation as an interventionist regulator. However, yesterday's confirmation of the GE/Honeywell ruling was marred by the judges' finding that the Commission had committed a string of errors in its justification of the merger prohibition.
The Luxembourg-based European Court of First Instance was especially critical of the Commission's use of a controversial theory known as "conglomerate effects", which allows the regulator to block mergers between groups with few overlaps.
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