Online Extra: Q&A with Mario Monti
With the U.S. adopting more restrained antitrust enforcement, European Union competition chief Mario Monti may well be the world's leading trustbuster. Earlier this month, he spoke with BusinessWeek Brussels Correspondent William Echikson about the proposed GE-Honeywell (GE ) merger and his overall competitive philosophy. Edited excerpts from their conversation follow:
Q: How did your meetings with GE CEO Jack Welch go?
A: The complexity of the case meant there was a lively exchange of arguments. Yes, we had differences of opinions. Yes, he is right to give himself a bad grade for predicting the merger would get through. I think he had a strong expectation that it could be cleared [without second-stage review].
Q: What are your concerns about the GE-Honeywell merger?
A: First, there is the horizontal overlap in the market for large regional jet engines. Secondly, there are the vertical effects: Honeywell (HON ) supplies competing jet engines. Thirdly, there is a bundling of jet engines, avionics, and components. The complaints in this merger have come from both European companies and American companies. That makes it a completely different scenario than Boeing-McDonnell Douglas, when the complaints were just European ones. Also, the complaints are not just from competitors but also from customers.
Q: How does the European approach to antitrust differ from America's?
A: In the past, there has been a remarkable convergence in the analysis of mergers, in the way [we] identify the relevant market, and in the way [we] devise whether a remedy is acceptable. Despite [the] convergence, the objective impact of the same merger may be different in Europe than in the U.S.
Several weeks ago, we cleared United Airlines and US Airways after securing that they would dispose of a certain number of transatlantic routes. But the impact of this merger is much more complex in the U.S. than in Europe, and the U.S. authorities are still investigating.
Q: Are competitor complaints taken more seriously in Europe?
A: We believe competitors have knowledge of the market. That makes their positions a useful element for bringing an antitrust case. My staff is experienced enough to discount for the vested interests. Also, we take seriously complaints by non-European companies against European ones. For example, on Mar. 20, we [fined] Deutsche Post for abusing its dominant position. And that was after a complaint by the U.S. company UPS.