The European Court of Justice had ruled in December 2004 that the German Packaging Regulation for certain drinks constituted a barrier to intra-community trade.
The decision could push the Commission into applying more pressure on Germany to change its laws, which have lead to major additional costs for drinks companies.
In July 2002, the German authorities announced that, as from 1 January 2003, a deposit and return system would become obligatory for non-reusable packaging for mineral water, beer and soft drinks.
The regulation affected the packaging and sale of natural mineral water in particular, which in compliance with an EU directive must be bottled at the source.
The Court of Justice decision was made following infringement proceedings against Germany brought by the Commission. The Court ruled that the producers and distributors had not been given enough time to adapt to the new rules.
In a second judgment that was rendered in response to a request for a preliminary ruling from a German court, the Court of Justice decided that a deposit and return system could only be introduced if a sufficiently long transitional period was granted.
The Court further ruled that the change to a new packaging-waste management system was only compatible with Community law if an operational system existed at the time the law was brought into force.
In March 2005, a lawyer acting for several European beverage companies filed a complaint with the EU's Ombudsman, claiming that the Commission had failed to take action to make Germany comply with the Court's judgments.
In its submission to the Ombudsman, the Commission argued that the judgments did not provide a legal basis to require Germany to suspend the packaging rules.
The Commission argued that the Court's first judgment had exclusively been based on the finding that the transitional period had not been sufficiently long and that enough time had passed in the meantime. The Commission further argued that the second judgment was irrelevant since it was only a preliminary ruling.
In his judgement released this week, the European Ombudsman, Nikiforos Diamandouros, said it found the Commission's argument "unconvincing".
The Court's judgement meant that a transitional period must precede the introduction of a new system, he argues.
The Ombudsman also reviewed the Commission's position that no further action needed to be taken as this could only be justified if an operational packaging-waste management system was available in Germany at the time when the Commission adopted the position.
"However, it was clear that, when adopting that position, the Commission had not yet ascertained whether this was indeed the case," Diamandouros said in a press statement.
The Ombudsman called the Commission's approach "inconsistent" and even "contradictory".
In a critical remark, the Ombudsman concluded that the Commission had failed to provide valid arguments to show that no further steps were necessary.
As a second infringement procedure concerning the German Regulation is still ongoing, the Ombudsman advised the Commission to take his observations into account.
"The Commission could rectify its failure in the course of a second infringement procedure concerning the regulation that is currently ongoing," Diamandouros ruled.
The full decision is available here.