PARIS Feb 3 The clock is ticking for the
European Union's antitrust czar, whose extensive powers put him
in the front line of battles with some of the titans of the
European Competition Commissioner Joaquin Almunia aims to
take landmark decisions on the alleged abuse of dominant market
positions by U.S. search engine king Google and Russian
gas monopoly Gazprom in his remaining time.
His term officially ends in November, but Brussels insiders
say the Spanish socialist may be sidetracked by extra duties
when some of his European Commission colleagues step down in
April to contest the European Parliament election.
So Almunia, in office since 2009, has a few weeks in which
either to reach settlements with the Internet giant and the
energy provider in exchange for commitments to change their
business practices, or to send them formal charge sheets.
Despite deep misgivings among software rivals, he seems
poised to strike a deal with Google after having rejected the
company's first two rounds of concessions, a senior EU official
said. He was speaking on condition of anonymity because of the
confidentiality of competition regulation.
But barring a change of heart in Moscow, Almunia is likely
to lay formal charges against Gazprom for discriminating among
European customers over the price at which it sells gas, the
official said. That would leave a final decision to his
successor, who the Kremlin may hope will be more emollient.
The euro zone crisis has diminished Europe's political clout
and weakened the EU executive's sway in global negotiations on
trade and climate change, but the competition commissioner's
authority remains unchallenged.
Almunia is arguably the most powerful official in Brussels
and the strongest antitrust watchdog in the world.
He can ban mergers that inhibit competition, stop
governments handing out cash to industry, make firms repay
illegal state aid, and impose huge fines on price-fixing cartels
and corporations that abuse their market dominance.
The crisis has enhanced his power by thrusting him into the
centre of the reshaping of the European financial sector as the
ultimate arbiter of state rescues of ailing banks.
"The proudest boast of all for EU competition policy is that
it has graduated to being seen as the strongest antitrust
enforcer around the world," said Alec Burnside, a Brussels-based
"The rest of the world is inspired as much by the EU system
as U.S. practice. Indeed China's emerging competition regime is
inspired more by Europe than America."
Analysts and competition lawyers say Almunia has done a good
job of upholding a level playing field in financial services
while applying the state aid rules sufficiently flexibly to
avoid triggering a systemic collapse.
He has also pushed the EU's competition powers a little
further into fiscal policy where the Commission has found it
hard to legislate, challenging German tax breaks for industrial
users of renewable energy, and Dutch and Irish tax clearance
letters to individual multinational companies.
"These are warning shots," Burnside said.
Almunia's Dutch predecessor, Neelie Kroes, reinforced the EU
competition staff sufficiently to be able to take critical
decisions on state aid to banks over a weekend when the survival
of a financial institution was at stake.
Many in Brussels are nostalgic for what seemed to them the
golden era of EU competition policy under Mario Monti, the
Italian economist who tackled and bested U.S. giants GE
and Microsoft in 1999-2004.
Monti stared down the likes of GE's Jack Welch and
Microsoft's Steve Ballmer, whereas Almunia is seen by some as
being too chummy with Google's Eric Schmidt.
Yet three of Monti's early decisions were overturned by the
EU courts on appeal, whereas Almunia so far has a 100 percent
success record with the courts, although they move so slowly
that it is too early to tell for sure.
Part of Almunia's legacy is a string of settlements in which
companies have agreed to mend their ways without the case
reaching a formal Statement of Objections that can lead to huge
fines and prohibitions.
Eighteen out of 24 abuse-of-dominance cases on his watch so
far have been settled by commitments and only six resulted in a
The advantage of such deals is that they offer a quicker
solution to a problem than going down the prohibition route. The
company concerned avoids a fine and heavier legal costs, limits
reputational damage and may avoid the disclosure of sensitive
"Cases based on weaker economic evidence are likely to be
settled on a 'win-win' basis: the defendant avoids the risk of a
fine; the Commission avoids showing up empty-handed after a
lengthy investigation, or worse, taking an incorrect decision
that would be quashed by the court," Mario Mariniello, a former
member of the chief economist team in the EU's Competition
department, said in an article for the Bruegel think-tank.
The drawback is that third parties and consumers are forced
to trust the Commission's judgment that their concerns have been
resolved with little means to check or challenge its
conclusions, he said.
In the Google case, some Internet search rivals are furious
at Almunia's intention to avoid lengthy market testing of the
company's latest round of remedies and reach a deal.
"The concerns raised by the Commission's investigation are
too important to consumers for them to be addressed by a
settlement that is not thoroughly vetted," said FairSearch, a
lobby group that includes U.S. online travel sites Expedia
Mariniello argues that in the interest of competition, the
commissioner should be more transparent when he accepts
concessions to close an antitrust probe by publishing detailed
reasons for concluding a deal.
That would not remove incentives for Brussels or companies
to reach a settlement, but it might give complainants a better
chance of legally challenging a bad deal for competition.