Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC Competition Commissioner Almunia discusses recent U.S./EC cooperation, (Sep 25, 2013)

By Jeffrey May, J.D.

The overlapping enforcement efforts of the U.S. and European antitrust agencies were among the trends addressed by Joaquin Almunia, Vice President of the European Commission (EC) responsible for Competition Policy, in a speech to Georgetown University Law Center’s Seventh Annual Global Antitrust Enforcement Symposium today.

In addition to discussing recent coordinated merger investigations, Almunia provided an update on the EC’s action against Google. Almunia explained that while there was significant cooperation on a number of matters, the outcomes were not always the same due to differences in the U.S. and European markets.

Mergers and acquisitions. Noting increased activity on the mergers and acquisitions front, Almunia discussed some recent deals impacting both Europe and the United States as examples of successful cross-border cooperation. One example was the acquisition by General Electric Company of the aviation business of Avio S.p.A. of Italy. According to Almunia, there was extensive dialogue between the EC competition authority and the FTC before the EC cleared the deal. Both authorities initially shared a concern that Avio was a key supplier of Pratt & Whitney, a competitor of GE, for a new aircraft engine. However, no remedy was necessary in this respect in Europe, Almunia noted. About two weeks after the EC announced its conditional approval of the transaction, the FTC announced a proposed consent order intended to prevent GE’s acquisition of Avio’s AeroEngine division from interfering with GE competitor Pratt & Whitney’s access to a component necessary to manufacture its engines.

Almunia also pointed to the authorities’ exchange of views in the assessing the proposed merger between US Airways and American Airlines. The EC cleared the proposed merger subject to concessions in the market for air travel between Philadelphia and London. The Justice Department, however, decided to challenge the transaction. According to Almunia, the differing results flowed from the different features of the respective markets. “Good cooperation not always leads to identical decisions,” he explained.

Google’s “search bias.” Outside the merger area, Almunia discussed cooperation between the EC and the FTC in investigating Internet search engine Google, Inc. In January, the FTC closed its investigation into alleged “search bias” by Google. The company made some voluntary commitments; however, the FTC did not impose an order on the firm related to that conduct.

Once again, the outcome in Europe was different. “We cooperated with our colleagues of the FTC since the beginning of our investigation, almost three years ago, but our conclusions are not identical,” Almunia explained. “One of the reasons is that Google’s market position in Europe—with a market share of over 90% in on-line search—is much higher than in the U.S.”

Almunia said that the EC was at a “crucial moment” in its discussions with Google. The EC must determine if the firm’s latest proposals satisfy EC competition concerns, after a market test of earlier commitments were rejected by industry players. If the authority’s concerns are not met, then the EC will set out its concerns in a Statement of Objections in the coming weeks, Almunia warned.

News: Antitrust