Monti puts trust in US cartel case as EU companies fret

By Peter Chapman

Date: 04/03/04

THE European Commission says it is relying on the "good sense of the US Supreme Court" in a landmark case that critics fear could lead to shock waves from American cartel rulings reverberating around the world.

The United States' leading court is currently re-examining a lower court ruling that stated a foreign company could sue for huge damages in American courts for harm to its business outside the US - caused by members of a vitamins-industry cartel detected and punished by American anti-trust watchdogs.

Experts predict the ruling, if confirmed, would exceed the limits of Congress' jurisdiction to prescribe laws affecting the interests of other countries.

The verdict by the Court of Appeals caused outrage among business groups and countries that fear their companies would be vulnerable to massive financial claims from competitors around the world, whenever the US authorities find evidence of a cartel harming Americans.

The UK and Germany, along with Canada and Japan - have put forward amicus curiae submissions to the court, to warn of the potential consequences.

But Mario Monti, the competition commissioner, has no plans to join in the criticisms, European Voice has learned.

His spokesman Tilman Lüder said member states "feel strongly about the issue", which concerns a law suit brought by Ecuadorian company Empagran against former vitamin-cartel members Hoffman-La Roche, BASF, Rhône-Poulenc and some of their subsidiaries.

But Lüder said his boss is "more relaxed" about the issue and has "trust in the good sense of the US Court system".

Monti - a staunch proponent of better global coordination on anti-trust issues - met US authorities during a whirlwind tour last week.

His spokesman said efforts to improve common understanding of the two blocs' merger rules dominated the agenda.

Monti's position reveals remarkable confidence in the US legal system - even though he has suffered a string of adverse rulings at the European Court of First Instance over the way his officials conducted merger cases.

Paul Victor, legal counsel for the Paris-based International Chamber of Commerce, a group representing business groups across the world, said his organization had also made a submission to the court.

"If permitted to stand, the decision would open the US federal courts to a flood of claims brought by foreign parties, even though the claims have no direct connection to the United States," he said.

If it is upheld, the ruling would mean that "every transaction in an allegedly "international" industry would be subject to the regulation of US laws and courts.

"That result would be a massive burden on international business and, in fact, would likely exceed the limits of Congress' jurisdiction to prescribe laws affecting the interests of other nations," Victor, a lawyer for US firm Weil, Gotshal & Manges added.

The Supreme Court will hear oral arguments concerning the case in April and will make a decision by the end of its term in June.

The European Commission says it is relying on the 'good sense of the US Supreme Court' in a landmark case that critics fear could send shock waves from American cartel rulings reverberating around the world.

http://www.usdoj.gov/atr/cases/hoffman.htm http://www.usdoj.gov/atr/cases/hoffman.htm

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