The European Commission is to appeal an EU court ruling that it must pay damages to French firm Schneider for wrongfully blocking the company's bid for a rival.
The decision last month by the European Court of First Instance could potentially open the floodgates to a number of similar cases.
Schneider Electric, an electric equipment company, is seeking €1.66 billion in damages from the European Commission for errors it made in blocking its takeover of French rival Legrand.
'Careful analysis of the ruling leads the Commission to conclude that the court's judgement is riddled with errors,' the Commission argued in a statement. The appeal will now go the European Court of Justice, the EU's highest court.
The case goes back to October 2001 when the Commission blocked Schneider's takeover of Legrand, ruling that the merger of the two French companies would weaken competition on European markets for low-voltage electrical equipment.
At the time of the ruling, Schneider had already acquired 98% of Legrand's shares and subsequently sold the stake at a loss to satisfy the Commission.
In October 2002, an EU court annulled the Commission's veto on the deal after finding that its competition review of the deal was riddled with 'errors and omissions'.
Although the two companies did not try to merge again, Schneider decided to try to make the European Commission pay for lost time and money.
Last month, accusing the Commission of 'grave and manifest failure' in its handling of the case, the Luxembourg-based European Court of First Justice awarded Schneider the right to damages, the amount of which remains to be determined.
The ruling in Schneider's favour marked the first time a compan has won damages from the EU's competition watchdog.
