## Facts

- United Brands Company and its EU sales coordinator marketed “Chiquita” bananas in several European Economic Community (EEC) Member States through a vertically integrated supply chain (production, shipping, ripening, and distribution).
- The European Commission initiated proceedings after complaints from distributors and found that United Brands infringed Article 86 EEC (now Article 102 TFEU), imposing a fine.
- The Commission identified four principal practices: (1) contractual exclusivity preventing ripeners/distributors from handling competing banana brands (“green banana clause”); (2) refusal to supply certain distributors, including a long-standing customer in Denmark (Olesen) and certain Irish undertakings; (3) charging different prices by Member State for equivalent transactions; and (4) allegedly imposing unfairly high (excessive) prices.
- United Brands challenged the decision before the Court of Justice, disputing market definition, dominance, and whether the practices constituted abuse, and seeking annulment and reduction or cancellation of the fine.

## Issues

1. Whether bananas constituted a distinct relevant product market, rather than part of a broader “fresh fruit” market.
2. What constituted the relevant geographic market, and whether it was a substantial part of the common market.
3. Whether United Brands held a dominant position in the relevant market.
4. Whether exclusivity requirements, refusal to supply, geographic price discrimination, and alleged excessive pricing constituted abuse under Article 86 EEC.
5. Whether the Commission’s findings and evidentiary basis warranted annulment in whole or in part and whether the fine should be reduced.

## Decision

- The Court partly upheld and partly annulled the Commission decision.
- The Court upheld that bananas were a distinct relevant product market based on limited interchangeability and specific consumer and supply characteristics.
- The Court upheld the finding that United Brands held a dominant position in a substantial part of the common market, relying on market share, vertical integration, brand strength, and customer dependence.
- The Court upheld findings of abuse as to geographic price discrimination between Member States where equivalent transactions were treated differently without objective justification, and upheld abuse principles applicable to unjustified refusal to supply a long-standing customer.
- The Court annulled the Commission’s excessive-pricing finding due to inadequate methodology and evidentiary support.
- The Court reduced the fine to reflect the partial annulment.

## Legal Principles

- Relevant product market assessment focuses on whether a product can be singled out by special features such that it is only to a limited extent interchangeable with others and only weakly constrained by them.
- Relevant geographic market is the area where conditions of competition are sufficiently homogeneous to assess the undertaking’s market power, and it may comprise a substantial part of the common market.
- A dominant position is a position of economic strength enabling an undertaking to behave to an appreciable extent independently of competitors, customers, and consumers.
- Exclusivity obligations imposed by a dominant undertaking that tie customers and foreclose competitors can constitute abuse.
- A dominant undertaking generally may not stop supplying a long-standing customer following regular commercial practice where orders are not out of the ordinary, absent objective justification; refusal tending to eliminate a trading party may be abusive.
- Applying dissimilar conditions to equivalent transactions (including by Member State) that place trading parties at a competitive disadvantage, without objective justification, constitutes abuse.
- Excessive-pricing allegations require a rigorous demonstration that the price is excessive relative to costs and economic value, and that it is unfair in itself or by comparison; insufficient proof warrants annulment.

## Conclusion

The Court confirmed that bananas could form a distinct market and that United Brands was dominant in a substantial part of the common market, upheld abuse findings for unjustified discriminatory pricing and aspects of refusal to supply and exclusivity, but annulled the excessive-pricing finding for insufficient evidence and reduced the fine accordingly.


United Brands Co. v. Comm’n of the Eur. Cmtys., Case 27/76 (C.J. Feb. 14, 1978)