|
 European Competition Commissioner Joaquin Almunia aims to take
landmark decisions on the alleged abuse of dominant market positions
by U.S. search engine king Google and Russian gas monopoly Gazprom
in his remaining time.
His term officially ends in November, but Brussels insiders say the
Spanish socialist may be sidetracked by extra duties when some of
his European Commission colleagues step down in April to contest the
European Parliament election.
So Almunia, in office since 2009, has a few weeks in which either to
reach settlements with the Internet giant and the energy provider in
exchange for commitments to change their business practices, or to
send them formal charge sheets.
Despite deep misgivings among software rivals, he seems poised to
strike a deal with Google after having rejected the company's first
two rounds of concessions, a senior EU official said. He was
speaking on condition of anonymity because of the confidentiality of
competition regulation.
But barring a change of heart in Moscow, Almunia is likely to lay
formal charges against Gazprom for discriminating among European
customers over the price at which it sells gas, the official said.
That would leave a final decision to his successor, who the Kremlin
may hope will be more emollient.
The euro zone crisis has diminished Europe's political clout and
weakened the EU executive's sway in global negotiations on trade and
climate change, but the competition commissioner's authority remains
unchallenged.
Almunia is arguably the most powerful official in Brussels and the
strongest antitrust watchdog in the world.
He can ban mergers that inhibit competition, stop governments
handing out cash to industry, make firms repay illegal state aid,
and impose huge fines on price-fixing cartels and corporations that
abuse their market dominance.
The crisis has enhanced his power by thrusting him into the center
of the reshaping of the European financial sector as the ultimate
arbiter of state rescues of ailing banks.
"The proudest boast of all for EU competition policy is that it has
graduated to being seen as the strongest antitrust enforcer around
the world," said Alec Burnside, a Brussels-based competition lawyer.
"The rest of the world is inspired as much by the EU system as U.S.
practice. Indeed China's emerging competition regime is inspired
more by Europe than America."
Analysts and competition lawyers say Almunia has done a good job of
upholding a level playing field in financial services while applying
the state aid rules sufficiently flexibly to avoid triggering a
systemic collapse.
He has also pushed the EU's competition powers a little further into
fiscal policy where the Commission has found it hard to legislate,
challenging German tax breaks for industrial users of renewable
energy, and Dutch and Irish tax clearance letters to individual
multinational companies.
"These are warning shots," Burnside said.
Almunia's Dutch predecessor, Neelie Kroes, reinforced the EU
competition staff sufficiently to be able to take critical decisions
on state aid to banks over a weekend when the survival of a
financial institution was at stake.
Many in Brussels are nostalgic for what seemed to them the golden
era of EU competition policy under Mario Monti, the Italian
economist who tackled and bested U.S. giants GE and Microsoft in
1999-2004.
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Monti stared down the likes of GE's Jack Welch and Microsoft's Steve
Ballmer, whereas Almunia is seen by some as being too chummy with
Google's Eric Schmidt.
Yet three of Monti's early decisions were overturned by the EU
courts on appeal, whereas Almunia so far has a 100 percent success
record with the courts, although they move so slowly that it is too
early to tell for sure.
Part of Almunia's legacy is a string of settlements in which
companies have agreed to mend their ways without the case reaching a
formal Statement of Objections that can lead to huge fines and
prohibitions.
Eighteen out of 24 abuse-of-dominance cases on his watch so far have
been settled by commitments and only six resulted in a prohibition
decision.
The advantage of such deals is that they offer a quicker solution to
a problem than going down the prohibition route. The company
concerned avoids a fine and heavier legal costs, limits reputational
damage and may avoid the disclosure of sensitive business
information.
"Cases based on weaker economic evidence are likely to be settled on
a 'win-win' basis: the defendant avoids the risk of a fine; the
Commission avoids showing up empty-handed after a lengthy
investigation, or worse, taking an incorrect decision that would be
quashed by the court," Mario Mariniello, a former member of the
chief economist team in the EU's Competition department, said in an
article for the Bruegel think-tank.
The drawback is that third parties and consumers are forced to trust
the Commission's judgment that their concerns have been resolved
with little means to check or challenge its conclusions, he said.
In the Google case, some Internet search rivals are furious at
Almunia's intention to avoid lengthy market testing of the company's
latest round of remedies and reach a deal.
"The concerns raised by the Commission's investigation are too
important to consumers for them to be addressed by a settlement that
is not thoroughly vetted," said FairSearch, a lobby group that
includes U.S. online travel sites Expedia and TripAdvisor.
Mariniello argues that in the interest of competition, the
commissioner should be more transparent when he accepts concessions
to close an antitrust probe by publishing detailed reasons for
concluding a deal.
That would not remove incentives for Brussels or companies to reach
a settlement, but it might give complainants a better chance of
legally challenging a bad deal for competition.
(Additional reporting by Foo Yun Chee in Brussels;
writing by Paul
Taylor; editing by Hugh Lawson)
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