Firms pay a heavy price for misdeeds

Date: 17/12/1998

By Peter Chapman

This year will be remembered as the one when Competition Commissioner Karel van Miert forced some of Europe's biggest industrial firms to reach for their cheque books to atone for their errant market behaviour.

Swedish-Swiss engineering giant ABB, British sugar firms, German car company Volkswagen and a cartel of shipping companies all faced the wrath of Van Miert for riding roughshod over consumers and rivals.

ABB was hit by a whopping 92.1-million-ecu fine after it and a number of smaller firms were foiled in their attempts to drive a rival out of one of their markets. The Commissioner also exacted sweet revenge on behalf of UK sugar consumers by fining the two main producers, British Sugar and Tate & Lyle, a total of 46.6 million ecu after officials found evidence that they and two other distributors had colluded to keep prices artificially high.

Van Miert ignored a wave of protests when he fined members of the Transatlantic Conference Agreement a massive 273 million ecu for price-fixing on the inland legs of door- to-door container transport.

He also imposed a record 102-million-ecu fine on Volkswagen for stopping its Italian dealerships from selling cars to German and Austrian customers wishing to take advantage of lower prices. If that were not enough, Van Miert also signalled his willingness to move into relatively uncharted waters by announcing that his staff would reviewing anti-trust policy in sport.

The Belgian soccer enthusiast got a taste for the sport sector when he locked horns earlier in the year with Formula One motor-racing supremos Max Mosely and Bernie Ecclestone over their allegedly exclusive television deals.

He also hinted that he would have liked to be in charge of the probe into UK pay-TV company BSkyB's take-over of Manchester United Football Club - but, sadly for Van Miert, that falls within the remit of British officials.

At the same time, the Commissioner and his officials have shown they are not afraid to block anti-competitive mergers and joint ventures, however politically sensitive they might be.

Van Miert told German media giants Kirch and Bertelsmann that they could not pool their resources in the Premiere platform, despite warnings that blocking the deal would put back digital TV developments in the country. He also wrestled concessions out of reluctant corporate giants such as British Airways and American Airlines and Lufthansa, United Airlines and SAS, setting a bench-mark for future aviation alliances.

But while Van Miert demonstrated his determination to use the powers he already has this year, he is facing an uphill struggle to convince member states to give his staff a freer hand to rule on the financing of public-service broadcasting. His officials got short shrift from member states in October when they presented a policy paper on the issue which recommended that TV channels should be forced to account more fully for the state hand-outs they receive to fulfil their public service remits.

These draft guidelines were intended to help the institution settle a number of pending television state aid cases. Instead, a majority of member states - anxious to control their broadcasters - said the Commission should continue to deal with state aid probes into public service broadcasters on a case-by-case basis.

Feature forms part of the European Voice 'Review of the Year'.