BRUSSELS, Oct. 25 (UPI) -- The European Commission announced a major overhaul of its competition policy Friday after the European Union's highest court delivered its third damning judgment on a major merger decision in as many months.
The Court of Justice -- the EU equivalent of the U.S. Supreme Court -- ruled Friday that the commission was wrong to forbid the $1.7 billion fusion of packaging giant Tetra Laval and French firm Sidel earlier this year.
The decision comes just days after the court threw out a commission ban on the merger of French firms Schneider and Legrand and just over three months after it criticized the EU executive for outlawing the alliance of Airtours and First Choice -- two British travel firms.
Delivering its verdict on the Schneider/Legrand case Tuesday, the Luxembourg-based court accused the commission of producing work riddled with "obvious errors, omissions and contradictions."
At a news briefing in Brussels, Competition Commissioner Mario Monti, who last year caused a transatlantic rift by forbidding General Electric's $45 billion merger with Honeywell, acknowledged that mistakes had been made.
"This has been a tough week for the EU's merger policy and for me," Monti said, expressing his "disappointment" at the court's decision.
"This is an important setback. But we are not going to stand back and let the commission's world class mergers record be washed away."
In a bid to "recover the trust" of the financial community, Monti unveiled a radical shake-up of the commission's mergers policy.
The EU competition chief pledged to hold regular "state of play" meetings with companies planning to merge and to keep them informed of complaints by third parties.
The commission also plans to set up a "peer review panel" inside the EU executive to provide a second opinion on major judgments.
While ruling out any change to the commission's controversial four-month timeframe for ruling on merger requests, Monti said the EU civil service would apply greater flexibility in complex cases.
Monti said the proposals, which are due to be published in December, would result in a "bold modernization and reform of the mergers control system."
They also represent a softening of Monti's hard-line approach to mergers, which has made the Italian enemies on both sides of the Atlantic.
Matthew Heim, a Brussels-based antitrust expert, said: "There has been a real lack of checks and balances in the merger review process which has meant that the commission could take decisions that companies effectively could not challenge."
Monti also admitted that the current rules often left companies in the dark.
"Many companies complain -- probably quite rightly -- about the uncertainty of interpretations in merger cases," he told reporters.
