| BUSINESSWEEK ONLINE : AUGUST 9, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- EUROPEAN BUSINESS
A Euro Trustbuster's Parting Volley (int'l edition) EU competition czar Van Miert goes out in a blaze of activity The European Commission inspectors arrived at dawn. They blocked off the exits at Coca-Cola Co. office buildings in Austria, Denmark, and Britain, flashed subpoenas, and demanded entry. After hours of rummaging through desks and computers, they took away copies of hard disks and 10,000 pages of documents. The July raids, instigated by EC Competition Minister Karel Van Miert, were designed to collect evidence that the world's largest soft-drink maker had offered retailers illegal rebates and incentives to keep Pepsi and Virgin Cola off shelves. The raids were vintage Van Miert. In seven years as Europe's antitrust czar, his publicity-conscious style has angered many. The Belgian socialist turned free-market crusader has blocked 10 times more mergers than all his predecessors combined, smashed open previously closed telephone and airline markets, and fought hard to limit state subsidies. Even his detractors admit that Van Miert has succeeded in making Brussels regulators a real force. Now, Van Miert is on a final tear. Before his term expires on Sept. 20, he is trying to consolidate his gains and ensure that his successor follows his free-market agenda. So in July he ordered raids not only against Coke but also against Belgian beermaker Interbrew. He fined British Airways PLC almost $7 million for offering illegal incentives to travel agents and ordered German public banks to reimburse about $450 million in illegal state aid. He also opened investigations against public television stations in France and Italy, and against the German post office. Many of the moves represent a stepped-up offensive against state aid. United Parcel Service Inc. has complained for five years that Deutsche Post used monopoly profits from letter delivery to bankroll investment in the parcel delivery industry. Indeed, in the past year, Deutsche Post has shelled out more than $3 billion to buy Danzas, Nedlloyd, parts of DHL Worldwide Express, and other private deliverers to create a powerful Europe-wide parcel network. ''When Van Miert saw those purchases, he no longer could ignore our complaints,'' says Anton van der Lande, UPS's vice-president for government affairs. Van Miert's crusade goes beyond targeting state monopolies. As the Coke raids show, he is going after any company, public or private, that has a tight grip on distribution. ''A dominant company on any market cannot indirectly bully competitors,'' says Van Miert. The cases against Coke and Interbrew focus on whether restaurateurs obtained free soda fountains or beer taps in exchange for refusing to sell rival products. Van Miert also wants to know whether retailers received special prices if they stocked a complete range of Interbrew and Coke products. If found guilty, companies can be fined up to 10% of their annual sales. In the U.S., many such incentives are considered legal and some lawyers say Van Miert has gone too far. ''The EU interferes too much in distribution agreements,'' complains Mark Powell of White & Case in Brussels. HIGH FEES. Van Miert still worries that some former monopolies are trying to rebuild their lost dominance through alliances or loose regulation. Although he would have liked to block British Airways' proposed tie-up with American Airlines and Lufthansa's link with United Airlines, his staff has not had the time to finish its investigation. Similarly, he won't have time to investigate Mannesmann-owned Arcor's complaint that German phone regulators are letting Deutsche Telekom charge excessive local connection fees. These sensitive cases will fall to Van Miert's successor, Mario Monti, an Italian. Now tax affairs commissioner, the right-wing Monti comes to office with a free-market reputation but a decidedly low-key manner. ''Monti is fair, bright, and will get the job done,'' says Stephen Kinsella, an antitrust specialist at Herbert Smith in Brussels. Thanks to Van Miert's crusade against national champions and state aid, it will be hard to turn back the clock. The job of moving Europe towards fuller and freer competition will be much easier. By William Echikson in Brussels _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS A Euro Trustbuster's Parting Volley (int'l edition) TABLE: Van Miert's Legacy INTERACT E-Mail to Business Week Online | |||
