''United Brands v Commission'' (1976
Case 27/76
is an EU competition legal case concerning abuse of a dominant position in a relevant product market. The case involved the infamous "green banana clause". It is one of the most famous cases in European competition law, which seeks to ban

cartels A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Mo ...

, collusion and other anti-competitive practices, and to ban abuse of dominant market positions.

Facts

United Brands Company Chiquita Brands International Sàrl (), formerly known as Chiquita Brands International Inc. and United Fruit Co., is a Swiss-domiciled American producer and distributor of bananas and other produce. The company operates under a number of su ...

(UBC) was the main supplier of

banana A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large herbaceous flowering plants in the genus ''Musa''. In some countries, bananas used for cooking may be called "plantains", distinguis ...

s in Europe, using mainly the '' Chiquita'' brand. UBC forbade its distributors/ripeners to sell bananas that UBC did not supply. Also, UBC fixed pricing each week; charging a higher price in different Member States, and imposed unfair prices upon customers in Belgo-Luxembourg Economic Union, Denmark, The Netherlands and Germany. The Commission viewed United Brands' action as a breach of Article 86 of the Treaty of Rome (now Art 102 of the

TFEU The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...

). Article 86 prohibits "abuse of a dominant position" of a relevant market. The case was referred for a

Preliminary Ruling A preliminary ruling is a decision of the European Court of Justice (ECJ) on the interpretation of European Union law that is given in response to a request (preliminary reference) from a court or a tribunal of a member state. A preliminary rulin ...

to the

European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Uni ...

under Article 177 (now Art 267).

Judgment

Agreeing with the Commission, the ECJ held that United Brands' behaviour was unlawful: * The ECJ rejected UBC's claim that the product market was the "fresh-fruit market as a whole". Instead, because of the notion of

cross elasticity of demand In economics, the cross elasticity of demand or cross-price elasticity of demand measures the percentage change of the quantity demanded for a good to the percentage change in the price of another good, ceteris paribus. In real life, the quantity d ...

and product characteristics, the product market was defined as the banana market. * UBC had about 45% of the EU banana market, and 45% was deemed to amount to a "dominant position". M.A.G. van Meerhaeghe, ''Protection of competition in Belgium'', Economia delle Scelte Pubbliche (Journal of Public Finance and Public Choice), Vol. VIII, 1990-2/3, p. 100. * Since the "green banana clause" effectively prevented any competing logistics firms from carrying Chiquita bananas, it was anti-competitive and in breach of Art 86.

References

European Union competition case law 1976 in case law 1976 in the European Economic Community Banana production {{Europe-law-stub

Facts

Judgment

See also

References