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United Brands v Commission

[1978] Case 27/76

Case summary last updated at 27/01/2020 18:57 by the Oxbridge Notes in-house law team.

Judgement for the case United Brands v Commission

UB leading world producer of bananas and accused by commission of number of abusive practices that according to the Commission were in breach of art 102. The commission defined the relevant product market as Bananas. They argued that commission had wrongly defined the relevant market. UB argued that relevant market was not bananas, but fresh fruit in general. Companies always try to go of broad definitions. In response, COURT: held that essential issue here to define market was Interchangeability and Court said: 
“For the banana market to be regarded as forming a market which is sufficiently differentiated from the other fruit markets it must be possible for it to be singled out by such special factors distinguishing it from other fruits that it is only to a limited extent interchangeable with them and is only exposed to their competition in a way that is hardly perceptible” 
• One of most controversial cases in relation to art 102 
• Chapman points out that UB was also a very controversial company with its practices in Central America. 
• Criticism still on all points of case: 
         ◦ Market definition: referring to very young, old and sick is not appropriate way to define a market as there are always some consumers who cannot or will not switch products. 
         ◦ Dominance: Even in arrow market def, UB was said to have 40% and 45% m share and there was lively competition.  Relying on technological advantage seem to say that UB was simply more efficient than its competitors. 
• Also becomes clear that one of issues that ECJ is concerned about is market partitioning as opposed to the econ effects of practices which are condemned. 
• All in all, approach to excessive pricing raises more questions than it answers, and ECJ even seemed aware of this in the UB case.

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