BRUSSELS — The 12 nations of the European Community, after 17 years of wrangling, are finally pursuing an antitrust policy that, with some important exceptions, walks and talks the American way.
"They're moving closer to our antitrust goal of protecting consumers from the robber barons and the inefficiencies of monopolies," said Joseph P. Griffin, head of the local office of the American law firm Morgan, Lewis & Bockius. That is good news for Americans doing business in Europe. Dismantling monopolies means opening markets to competition, Griffin said, "and the European Community hasn't distinguished between opening to European competitors and to foreign competitors."
The Treaty of Rome, the 1957 charter of the European Community, authorized regulation of joint ventures and moving against businesses that so dominate their fields they "abuse" their position. It also provided the power to block national subsidies that give one company an unfair advantage over others elsewhere in Europe.
What was missing was authority to turn thumbs up or thumbs down on proposed corporate mergers and takeovers before they took place.
The European Commission, executive branch of the EC, proposed such rules as long ago as 1973, but the member nations themselves, which must approve any such change in policy, put the rules in place just last September.
"The matter was hugely sensitive politically, because we were going straight to the heart of national sovereignty," said H. Colin Overbury, one of Europe's top trust-busters as director of the European Commission's merger task force.
The rules had to be acceptable to everybody--from Britain and Germany, which long had their own antitrust laws, to Italy, which put such rules in place only last October, and the Netherlands, which has rules but seldom enforces them.
It was the EC's determination to bring down all trade barriers among its 12 members by the end of 1992 that turned the tide. The member nations realized they could not operate as a truly common market if they did not play by one set of antitrust rules.
Sir Leon Brittan, vice president of the European Commission for competition policy, is trying to make the most of his new tools.
"For competition policy, the interests of the consumer are paramount," he said in a speech last month at Yale University. "A company's interests are to maximize profits, and there is nothing wrong with that.
"But sometimes a company is tempted to take the easy way out by swallowing up competitors, carving up the market with them or driving them out of business. The consumer's interest, of course, is to have a wide choice of goods and services."
Europe, unlike the United States, has not tried to distinguish between good and bad mergers and acquisitions via numerical measurements of market control. Subjective judgment still plays a significant and formally recognized role.
Among the goals set out in the new merger regulation, for example, is the European Community's "economic and social cohesion." The EC may take into account whether a proposed merger or takeover would enhance European businesses' ability to compete with other (read American and Japanese) companies.
To some observers, these clauses could permit nothing less than a European "industrial policy"--a conscious governmental effort to help some local companies grow big enough and strong enough to compete not just within the Continent, but worldwide. It is an approach that clearly has been followed at a national level with companies such as Italy's Fiat.
"There seems to be an inherent policy to allow mergers that will enable European companies to compete with the Americans and the Japanese," said Howard M. Liebman, a Brussels-based lawyer with Oppenheimer Wolff & Donnelly of Minnesota.
John Ratliff, a lawyer specializing in EC matters for the European firm Stanbrook and Hooper, identified what he called a policy of "allowing European companies to get big enough to compete worldwide."
Brittan insists, however, that he is not trying to turn his competition office into a European version of the Japanese Ministry of Trade and Industry.
"When you look around the world for examples of genuinely competitive industries," he said, "lack of competition at home is not a common feature. In fact, companies taking on world markets are more likely to be fit and able to do so successfully if they have been training competitively at home."
Yet one of his first decisions under the new merger regulations--to permit car makers Renault of France and Volvo of Sweden to form an alliance to make cars, trucks and buses--fed the belief that industrial policy had come to the EC.
Already this month, 15 proposed mergers had been referred to the competition office, according to Overbury. The office had approved eight, including Renault-Volvo, so far, but in fairness, the merger regulation is so new that the office has not had time to come up with an unfavorable ruling.