Cramer, Simon is right. Stop blaming the protectionist EU for preventing the GE/HON merger. The Wall Street Journal reported on Friday that it was two American rivals of Honeywell who "lobbied the EU at a closed hearing in late May." “US Companies Using EU Regulators to Block Domestic Mergers.” WSJ July 1,2001 and Dow Jones
“U.S. senators accused E.U. regulators of protectionism and warned of a possible "chilling effect" on trans-Atlantic relations and even U.S. President George W. Bush expressed concern about the deal's rejection."
While politicians complain and blame the EU, U.S. companies are increasingly becoming accomplices of the EU, asking them to block mergers or to demand excessive concessions to gain approval. After failing to convince U.S. antitrust officials to kill the deal, two Honeywell rivals, Rockwell International (ROK) and United Technologies Corp. (UTX), lobbied the E.U. at a closed hearing in late May. They complained that combining the financial power of GE's leasing arm, GE Capital Aviation Services, with market dominance in jet engines and avionics could drive others out of business, eventually leading to higher prices for customers.” boohoo
Today's WSJ reported that "Charles James, the U.S. antitrust chief, sharply criticized the European Union for rejecting General Electric Co.'s $43 billion merger with Honeywell International Inc." "Mr. Monti fired back Wednesday, noting that some of the strongest objections heard by EU antitrust enforcers came from U.S.-based competitors and customers of GE and Honeywell. He also said that the U.S. has often forced changes or in some cases even blocked mergers that the EU has allowed to proceed."
"David Balto, a former federal antitrust enforcer now with the law firm of White & Case in Washington, said the record bears out Mr. Monti's complaint, especially in pharmaceuticals mergers, where the U.S. demanded changes in several deals the EU approved."
"U.S. Antitrust Chief Chides EU For Rejecting Merger Proposal" John Wilkes, WSJ July 5, 2001.
interactive.wsj.com
"Critics have slammed the E.U. for taking input from rivals of the GE-Honeywell deal, likening the practice to backroom lobbying. "Here if competitors howl, we generally don't give them a lot of credence," said Michael Watkins, associate professor at Harvard Business School." "US Cos Seek Sympathetic Ear In Europe To Block Mergers" 7/1/2001
interactive.wsj.com
Get real, Mr. Watkins, it is the same in the US, but it goes on more quietly, behind closed doors. Few (especially CNBC) like to admit that competitors are behind almost all antitrust actions, in the United States and in Europe.
Antitrust is the same in the US as in Europe. It is not about protecting consumers, but about protecting competitors from competition. The Europeans openly admit they listen to competitors, the US does not admit it openly. They do try to protect their own, but the same can't be said for the US.
I wish CNBC and the media would stop talking about much better American antitrust policy is, because they are equally bad. Competitors successfully enlist the government (any government that is willing) to do to their competitors what they can't do to them in the market.
There seem to be more American companies ratting to the EU even as anti-American sentiment increases globally and the EU is very happy to help an American company inflict damage on another large American rival, as the EU resents American domination.
I don't think I have heard CNBC ever acknowledge that Microsoft's competitors: Sun Microsystems, Oracle, AOL, Apple and others, were directly responsible for bringing this antitrust lawsuit against MSFT. It took years of lobbying and millions of dollars, but they finally succeeded in 'hiring" the DOJ to go after MSFT. And it was Sun Microsystem's recent complaint to the EU that is responsible for the EU's present investigation of Microsoft. Sun is charging MSFT with using their monopoly in Windows to try to monopolize the server software market.
In the latest Monti interpretation of antitrust law, the EU has forced an American company, IMS (NYSE-RX) to license their proprietary software for collecting detailed drug information- to an American competitor and a German competitor. IMS had sued both companies last year in Frankfurt, Germany for infringing on their propriety technology. IMS won and the German court barred both companies from using IMS software or anything similar. The American company- NDC Health - complained to the EU and Monti came ...to their rescue. The EU is giving IMS two weeks to provide both companies with a commercial license or else.... dailynews.yahoo.com
AMD's complaint to the EU led to their investigation of Intel.
Competitors of WorldCom and Sprint in the US and Europe complained to the DOJ and the EU and both sides blocked that merger one day apart.
I think it was Disney's complaint to the EU about Time Warners's acquisition of EMI that prevented that merger.
I wonder which American drug company was responsible for the much delayed FCC approval for the Glaxo SmithKline Beecham merger. The EU approved that merger long before the US and with less extortion. |
