UEAPME to challenge big business probe

Date: 30/07/1998

By Simon Coss

EUROPE's main small firms lobby is preparing a two-pronged attack on the way the European Commission investigates alleged foul play by big business.

The European Association of Craft and Small and Medium-Sized Enterprises (UEAPME) is planning not only to take legal action against the Commission in the European Court of First Instance but also to complain to the EU Ombudsman.

The organisation argues that the way the Commission's Directorate-General for competition policy (DGIV) handled an investigation into the case of a small UK firm allegedly driven out of business by a much larger Norwegian rival raises serious concerns.

"What is worrying from our point of view is how many similar cases like this are out there," said UEAPME spokesman Garry Parker.

The organisation claims that the Commission did not follow rules set out in the EU treaties when it investigated the case of Microwave Ovenware Limited (MOL), a small kitchen utensils company which went bust in 1988 after allegedly being forced out of business by Dynopack, a much larger Norwegian-based firm.

MOL claims Dynopack used unfair pricing to undercut its products. Its former head Paul Gregory complained to the UK competition authorities, which passed the case on to DGIV.

Gregory claims DGIV handled his complaint sloppily, accepted "false evidence" from Dynopack and failed to inform him of all the procedural details of his case.

In 1994, the Commission told Gregory it was closing the investigation, saying there were no grounds for it to continue with the case because, as MOL had gone out of business, it was not possible for the firm to be suffering an ongoing abuse of its ability to trade freely. "The Commission's job is to act to stop ongoing infringements and there is no continuing business here," explained one DGIV expert.

Commission officials add that because Dynopack was based in non-EU country Norway, they had even less room than usual for manoeuvre.

But Gregory says he told officials that MOL was no longer trading from the outset, and claims DGIV led him to believe on at least one occasion that there could be grounds for complaint even though Dynopack was a Norwegian company.

In 1997, Gregory contacted UEAPME, which agreed to take up his case on the grounds that similar alleged abuses of small firms by big business should not be allowed to happen because of bad management by the Commission.

Parker says that while Gregory accepts that his business is finished, he is adamant that large companies should not be led to believe they can drive their smaller competitors out of business. "Mr Gregory feels very strongly that there must be a forceful political signal that behaviour such as Dynopack's will ultimately be stamped on," he said.

Europe's main small business lobby (UEAPME) is attacking the way that DG IV of the Commission investigates alleged foul play by big business.