- The Washington Times - Friday, January 7, 2005

Now that the European superstate is a reality, some Europeans are beginning to dream bold corporate dreams, American style. Gunter Verheugen, the EU industry commissioner, told Le Monde, the French newspaper, that European antitrust laws should become less “dogmatic” to allow for the creation of “European champions.” Perhaps a newfound enthusiasm for the European uber-company could replace that of the pan-European bureaucracy?

That is probably an idle thought. Monolithic European bureaucracy has become a matter of culture. Still, Mr. Verheugen’s proposition is compelling, and would put Europe more in line with U.S. antitrust regulation and increase the union’s corporate competitiveness. Mr. Verheugen’s statement is timely and adds to an existing movement towards anti-trust liberalization.

Europe’s former anti-trust czar, the infamous Mario Monti, stepped down in November, and the union now has an overdue opportunity to apply a less restrictive approach to merger policing. Mr. Monti last year applied a $600 million fine against Microsoft for “bundling” its Windows operating system with its Media Player product. At the same time, though, Mr. Monti allowed the company to offer the bundled product as long as it also offered the unbundled version. The decision appeared to many as a confused remedy by Mr. Monti, and could now be seen as a precursor to a more liberal policy.

Mr. Monti most memorably blocked the merger of GE and Honeywell in 2001, after the Justice Department had already approved it. Over the years, force majeure forced Mr. Monti to take a more lenient approach. In 2002, Europe’s watchdog court over antitrust decisions, the European Court of First Instance, overturned three of Mr. Monti’s high-profile merger vetoes, and in effect described his team’s antitrust analysis as shoddy. Most scathingly, the court in June 2002 struck down the 1999 veto of a takeover by Airtours (now MyTravel) of U.K. tour operator First Choice, saying, the task force’s analysis was not based on “cogent evidence” and was “vitiated by a series of errors of assessment.”

That led Mr. Monti to propose some anti-trust reforms. He appointed a chief economist to review findings, established a devil’s-advocate panel to counter the team’s arguments and added four extra weeks to negotiate settlements with companies. More recently, on Oct. 26, Mr. Monti officially approved a merger between software companies Oracle and PeopleSoft.

Mr. Verheugen suggested to Le Monde that the incoming antitrust czar, Neelie Kroes, would take a more liberal approach. “I have the feeling that she is not, in principle, opposed to the emergence of big companies, provided they exist not thanks to subsidies but their position in the market.”

That would certainly be a welcome change, as long as such philosophy also applies when U.S. companies take over European ones, creating American champions.

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