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European Commission competition czar Mario Monti said Tuesday that he is working with U.S. antitrust authorities to narrow differences over legal theories, remedies and timing of merger reviews. “We have all intention of taking stock of everything negative and positive,” he said. Monti’s comment came after a closed-door meeting with Sen. Herb Kohl, D-Wis., chairman of the Senate Judiciary antitrust subcommittee. The senator this summer sharply criticized the Commission’s blocking General Electric Co.’s $41 billion acquisition of Honeywell International Inc., saying it appeared the Europeans were more interested in protecting their companies from competitors than in enforcing antitrust law. After the meeting, the senator was more conciliatory. “We had a very good meeting,” Kohl said. “Both the U.S. and [European Union] are looking for ways to harmonize, so what happened in GE-Honeywell does not become an indication of how things will proceed in the future.” Speaking to reporters, Monti said discussion on convergence will occur in a joint U.S.-E.C. merger working group established last year. On the agenda is examining what is known as “collective dominance theory,” which holds that some companies may be so large in so many different businesses that they are anti-competitive. The E.C. supports this theory, while the U.S. does not. The working group also will examine antitrust remedies to enable U.S. and European Commission regulators to propose similar solutions to anti-competitive deals, Monti said. On the issue of timing, the working group will study ways to ensure that U.S. and Commission officials conclude merger reviews at essentially the same time. Monti said merging companies make it tough for authorities to work jointly on antitrust reviews because they do not simultaneously file deal documents with both regulators. “It is easier to converge on a merger if the teams are on the same timetable,” he said. Monti also said that European and American regulators have agreed to periodically brief each other on the status of their respective antitrust investigations into Microsoft Corp. Earlier Tuesday, Monti met with U.S. Trade Representative Robert Zoellick. The competition chief said there is “considerable convergence” on a European Commission proposal to discuss competition policy in the upcoming World Trade Organization round. The discussion would be limited to proposals for adopting core competition principles, such as the need for transparency in rulemaking and the notion that antitrust authorities should not discriminate against foreign companies. Monti spent Monday mending fences with Federal Trade Commission Chairman Timothy J. Muris and Assistant Attorney General Charles James. Relations had been tense, especially with the Department of Justice, since the GE-Honeywell controversy erupted. Justice Department officials had approved the deal in May, requiring only that GE sell a small helicopter engine business. Muris Tuesday said the meeting was “highly productive” and expressed support for the goal to narrow E.C.-U.S. antitrust. James had criticized the European Commission’s decision, saying in early July that U.S. antitrust policy protects consumers, while the European regulators protect companies. He then called for more meetings between U.S. and Commission officials to more closely coordinate policy. “This matter points to the continuing need for consultation to move toward greater policy convergence,” he said at the time. In a joint statement released after the Monday meeting, James appeared to get his wish. Besides increasing the duties of the merger working group, Monti, James and Muris also endorsed the so-called Global Competition Initiative, an effort partially spearheaded by the International Bar Association to create a forum where antitrust authorities and practitioners can work to smooth countries’ policy differences. Antitrust experts were pleased with the regulatory meeting. “It is a good sign not only that Monti came here but that talks like this are held after there was a divergence of opinion like in GE-Honeywell,” said Thomas Brock, a partner at Proskauer Rose. But while the meetings may help regulators bury the hatchet, Brock said substantive policy convergence may be far off. He noted that the portfolio theory used by the Commission to stop the GE-Honeywell deal was abandoned by U.S. regulators more than 20 years ago because they concluded that bundling of services could benefit consumers. Still, Brock said it makes sense for the regulators to talk. “This is the most likely way that differences between the two approaches can be resolved,” he said. Copyright (c)2001 TDD, LLC. All rights reserved.

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