NORTH west package holiday company MyTravel today lost a claim for compensation against the European Commission for blocking a merger with rival tour operator First Choice.

The Commission ruled against the merger in 1999, arguing that the link-up would breach EU rules on fair competition by creating a large UK operator dominating the short-haul package holiday market in Europe.

At that time MyTravel was called Airtours and it successfully launched a legal challenge on the grounds that the Commission had not adequately shown that the merger would harm competition in the EU package holiday sector.

MyTravel then sought damages for what it claimed were losses suffered by the Commission's refusal to allow the merger to go ahead.

But today judges at the European Court of First Instance in Luxembourg said the Commission's decision to block the merger did not amount to a breach of EU law, even though the decision had been overruled by the EU courts.

For the Commission to be liable for compensation, its officials would have to be guilty of “unlawful conduct... amounting to a manifest and grave disregard for the limits on their discretion” said today's ruling.

It went on: “The complexity of the situations to be regulated in the control of mergers and the margin of discretion available to the Commission must be taken into account in analysing whether a sufficiently serious breach on the Commission's part may have arisen.” “The Court of First Instance rules that the Commission did not commit a sufficiently serious infringement of a rule of law in analysing the Airtours/First Choice merger.

“The fact that the Court annulled the decision of the Commission prohibiting the acquisition of First Choice by MyTravel does not make the Community liable in damages, since the Commission did not manifestly and gravely infringe Community law.”

Since the deal was blocked the travel sector has changed dramatically, with consumers switching away from package holidays and to the budget airlines.

Once one of the north west’s biggest and most successful companies MyTravel has since merged with Thomas Cook, while First Choice is now part of TUI, owner of the Thomson holidays brand.