Kroes seeks regime that benefits consumer

Neelie Kroes, the European Union antitrust chief, wants to change the way the Brussels regulator fights abuses by dominant companies such as Microsoft and Coca-Cola, by concentrating on business practices that hurt consumers.

“I like aggressive competition including by dominant companies and I don't care if it may hurt competitors, as long as it ultimately benefits consumers,” she told an antitrust conference in New York on Friday.

The EU competition commissioner said dominant companies should not be pursued if their conduct only hurt less efficient rivals.

Ms Kroes also said she wanted to let big companies off the hook in cases where their abuse led to efficiencies that were greater than the harm caused to competition.

Lawyers said the changes would require much greater use of economic data and analysis and would probably mean that some categories of abuse would no longer be pursued by the European Commission.

“It will be much more difficult and time-consuming to establish that a company has abused its dominant position,” said Chris Thomas, a partner at Lovells in Brussels.

“This is fundamentally good news for powerful companies, because it will be exceptionally difficult for their rivals to demonstrate an abuse,” he added.

Other lawyers voiced unease over the greater reliance on economic analysis, which they warned might reduce the predictability of Commission decisions.

Jean-Francois Bellis, partner at the Brussels law firm of van Bael & Bellis, said the Commission should take care not to set a standard that gave the regulator too much discretion.

Rachel Brandenburger, a partner at Freshfields Bruckhaus Deringer in Brussels, pointed out that the reforms suggested by Ms Kroes would move the Commission's policies closer towards the US model. “This would go some way towards bridging the gap between the European and US approach towards abuses by dominant companies,” she said.

The changes envisaged by Ms Kroes would affect Article 82 of the EU Treaty, the provision that allows the Commission to crack down on companies that abuse their dominant position.

Though the clause is invoked only rarely, it has led to some of the Commission's most high-profile investigations, including against Microsoft, Coca-Cola, Michelin and IBM.

It has also led to some of the highest fines ever imposed by Brussels: Microsoft, for example, was last year ordered to pay €497m ($576m) for a violation of Article 82.

Many lawyers and executives believe that the Commission has used the provision too often, and that court rulings and the regulator's own decisions have blurred the meaning of the clause. Partly in response to such criticism, the regulator launched a review of the article, which is expected to result in new guidelines.

Ms Kroes' speech was the first time a senior official revealed the Commission's latest thinking on the issue.