The European Court of Justice (ECJ) has rejected Unilever’s final appeal against the European Commission competition ruling that found Unilever had abused its dominant position in the Irish ice cream sector, bringing to an end a 15-year legal battle between Unilever and Masterfoods.
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In the early 1980s Masterfoods, whose brands include Mars, Snickers and Galaxy, attempted to expand in Ireland. However, HB Ice Cream, a Unilever subsidiary, dominated the market. The company had signed exclusivity deals with a large proportion of retailers, meaning that retailers could only stock HB ice cream in freezers supplied by Unilever.
Masterfoods challenged the legitimacy of these agreements in the Irish courts and submitted a complaint to the EC, arguing that the deals were an abuse of Unilever’s dominant position.
The EC took up the case on behalf of Masterfoods and brought it before the European Court of First Instance. The Commission said that many small Irish retailers only had space for one ice cream freezer, meaning that the exclusivity agreements prevented Masterfoods from competing effectively. In 2003 the European Court of First Instance ruled in favour of the EC, a decision appealed by Unilever.
The ECJ found that Unilever has no valid legal grounds to appeal the ruling. The court ordered Unilever to pay legal costs in the case, which are likely to run into millions of euros. The company cannot appeal the ruling.
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