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Some consider him a hard act to follow. But, luckily for incoming European Union competition commissioner Neelie Kroes, a sequel to the Mario Monti Show likely will keep most competition regulation participants content. “She sounds like a terrific successor,” said William Kolasky, a partner at Wilmer Cutler & Pickering in Washington and a former deputy assistant attorney general for international antitrust. “I suspect she will continue the reform efforts and move to a more consumer-welfare oriented approach to competition policy” Kroes, now the transport minister for the Netherlands, on Thursday was appointed by president designate Jose Manuel Durao Barroso to what is seen as among the most powerful slots in the commission. The new administration takes over Nov. 1, and Kroes is expected to continue reform work started last summer by Monti after a string of crushing legal defeats. The commission hopes to restore credibility with a broad set of guidelines to ensure regulatory decisions are based on solid evidence and are more firmly grounded on economics. The reshuffle allowed, somewhat surprisingly, two of the biggest music companies, Bertelsmann AG’s BMG and Sony Corp.’s Sony Music, to merge into a market heavyweight. A relative unknown, Kroes, 63, has a political history with stretches in the Netherlands and as an adviser to the EU’s transport commission. But she also sits on the board of truckmaker Volvo AB, wireless provider mmo2 plc and Lucent Technologies Inc.’s Dutch division, among others. Observers say this mix of political know-how and corporate expertise will help her walk the legal and political tightrope that her new position demands. “That’s a good background,” said Norton Rose partner Martin Coleman, who heads the practice’s EU competition division in London. “Brussels is at the center of a very complex web of competition authorities.” Restoring the faith in the EC’s competition office will depend on Kroes laying down a series of well-based decisions in her early days. She must also come to terms with Barroso’s administration, which includes the appointment of 24 new commissioners as well as a slight adjustment to the commission’s structure. Kroes early on is expected to face challenges from Europe’s biggest economy, Germany, and its close ally, France. The two have tussled repeatedly with Brussels over massive state aid and protectionist legislation. After chastising Paris for helping keep ailing industrial conglomerate Alstom SA afloat, Monti this summer helped craft a bailout that made the French government the group’s biggest shareholder by converting debt into equity. Kroes will have to enforce provisions in the rescue plan that call for outside capital to keep the stumbling company alive. Germany, which has sparred with the commission over a complex banking system that pits private lenders against a full range of state-owned institutions, also hopes to wrest some regulatory control from Brussels to create “national champions,” or companies that dominate the German market. The term became mainstream when Paris meddled in Sanofi-Synth�labo SA’s ultimately successful hostile bid for domestic rival Aventis SA in April. Kroes may also inherit the thorny investigation into Oracle Corp.’s $9.4 billion bid for PeopleSoft Inc. Early this summer the commission suspended indefinitely its in-depth probe, hoping to gain more information on the human resources and financial management software markets. With her background as politician and executive, it shouldn’t be a problem for Kroes to have memorized her lines by the time the lights go on in November. Jaret Seiberg in Washington contributed to this report. Copyright �2004 TDD, LLC. All rights reserved.

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