Mario Monti: Merger man on a mission

Analysis
By James Arnold BBC News Online business reporter

Mario Monti is most famous for shooting mergers down in flames.

Now, though, Europe's commissioner for competition is trying to stitch together a tricky merger of his own.

Mr Monti is currently in the United States, talking to antitrust authorities there about ways to make transatlantic competition policy work more harmoniously.

After a series of embarrassing legal rebuffs, and facing mounting opposition from his former supporters, Mr Monti urgently needs a result.

Third time unlucky

For the moment, Mr Monti may be glad just to be out of Europe.

"Last week was a tough week for the Commission's merger control policy - and of course for me," he told a conference on Thursday.

Unaccountable and out of touch, say critics

A week earlier, Europe's highest commercial court blew Mr Monti a resounding raspberry, ruling that his decision to block a merger between two packaging firms had been incorrect.

This was the third time in four months that Mr Monti's merger decisions had been overturned in court.

The court's ruling, which argued in uncompromising tones that Mr Monti's staff did not know what they were doing, opens the way for a flood of appeals - most embarrassingly, perhaps, from General Electric and Honeywell, two US firms whose merger plans Mr Monti spectacularly torpedoed last year.

High hands and jerking knees

There is, it seems, something rotten in Mr Monti's Merger Task Force (MTF).

The agency, competition lawyers say, is high-handed in its attitude and motivated by a knee-jerk suspicion of the companies it regulates.

"You are presumed guilty, and have to prove your innocence from a position of terrible weakness," grumbles one Brussels-based British lawyer.

Arguing a case is made trickier by mounting concerns over the quality of the MTF's decision-making.

Its soaring workload, combined with crippling self-imposed deadlines, make for half-baked results, critics argue.

Even the European court, not known for its bluntness, accused MTF staff of producing shoddy work, shot through with "obvious errors, omissions and contradictions".

Building bridges...

The result of all this has been that Brussels has remained wildly out of step with competition authorities in the US, and even in some European Union member states.

Hence Mr Monti's US visit - an attempt to bridge the divide so glaringly exposed by the GE-Honeywell decision.

On Wednesday, Mr Monti, together with representatives from the US Federal Trade Commission and Justice Department, announced a set of loose recommendations, intended as the first steps towards a full-blown transatlantic merger code.

When a merger affects interests on both sides of the Atlantic, case officers in Europe and the US will be obliged to co-operate from day one, and will share confidential corporate information.

Overall, Mr Monti said, Washington and Brussels aimed to minimise "the risk of divergent outcomes in the interest of both businesses and consumers".

... halfway across

This is the second package of concessions Mr Monti has announced in a week.

Mario is still up for a fight

Last Friday, he told a news conference that he would be looking at building more flexibility into the approval process, running an eye over the quality of his staff, and possibly hiring a new official to take charge of the MTF.

But while a little quality control is certainly welcome, a full-scale Americanisation of the MTF would be no sort of solution.

Brussels has been accused of being anti-business but US regulators have long seemed little more than poodles.

Until the court overturned the first of Mr Monti's merger rulings this summer, his no-nonsense approach was seen as just the sort of stringency that big companies needed.

The US regulators' laisser-faire approach, after all, has been blamed for the tidal wave of scandal that has engulfed corporate America this year,

Sling those guns

But it seems unlikely that Mr Monti will go all the way.

There is enormous resistance within the Commission even to an increase in transparency, let alone making officials publicly accountable for their decisions, as some critics have suggested.

Moderates point out that the current level of excoriation of Mr Monti's team is somewhat unwarranted.

Although he has grabbed the headlines with a few prominent merger vetoes, Brussels has blocked only 18 of the 2,100 cases it has examined since 1990.

And while Mr Monti is pressing the flesh in Washington, his antitrust team is going strong.

This week was one of its busiest in recent memory, slapping the wrist of the German Government for being over-generous with aid and dishing out fines for anti-competitive practice to Sotheby's and Nintendo.

Super Mario's gun-slinging days may not be over just yet.