The second-highest European court today annulled the European Commission's 1999 decision to block the £950 million sterling (€1.47 billion) Airtours' bid for its rival UK travel group First Choice.
It is the first-ever defeat of the Brussels authorities on a merger decision and will have far-reaching implications on competition policy.
The Luxembourg-based Court of First Instance ruled the Commission was wrong to conclude the takeover would have led to a three-way oligopoly in the UK travel market.
However, it is not thought that today’s ruling will prompt Airtours (now called MyTravel) to launch a second bid for First Choice.
The European Commission can appeal the decision which looks set to restrict the European competition authorities ability to block mergers that lead to the creation of oligopolies.