Mario Monti: French antitrust plans could harm EU credibility

Former EU competition chief Mario Monti has delivered a stark warning that Paris is playing with fire by seeking to tear up Europe’s antitrust rules.

France and Germany are incensed because the EU this month blocked Alstom and Siemens  from merging to form a European rail champion. Brussels argued the merger would form a behemoth that would harm European consumers, while Paris and Berlin claimed that the tie-up was necessary to combat rival manufacturers in China.

Monti slammed France’s knee-jerk desire to rewrite the antitrust rules as “un-French,” saying that Paris is usually a strong advocate of enforcement from Brussels. He warned that an assault on EU law by the government of President Emmanuel Macron could undermine the credibility of competition regulators in Brussels as they seek to take action against digital giants — something France supports.

Monti shot down the landmark merger between the U.S. companies GE and Honeywell in 2001, and started the EU’s long series of investigations into American tech companies.

He told POLITICO in an interview that top French officials underestimate the likelihood of their actions backfiring.

“I found the comment of Bruno Le Maire — that Vestager acted in the interest of China — frankly unacceptable” — Mario Monti

“I would urge France to reflect on the longer term,” he said. “I do not believe that any short-term competitive gains that could be obtained through champions created well ahead of actual challenges from China could justify undermining the credibility of EU competition policy, this powerful instrument that Europe has been building over the decades.”

Credibility would suffer, he added, “if [competition policy] were used, candidly and a bit naïvely, to protect the economic interests of some European companies.”

Monti, also a former Italian prime minister, was especially critical of French Economy Minister Bruno Le Maire, who said that not allowing the tie-up between Alstom and Siemens would serve the interests of China. “I found the comment of Bruno Le Maire — that [European Commissioner for Competition Margrethe] Vestager acted in the interest of China — frankly unacceptable. It amounted to accusing the commissioner of betrayal of her institutional duties,” said Monti, who is now a senator in Italy.

Given that France prides itself on being “mindful of the long-term construction of the European Union,” Monti added that he considered Le Maire’s comments “a bit un-French.”

“If I were France, I would be very happy that we are building in Europe what might turn out to be key instruments to save our civilization from the excesses of giant digital platforms, in particular through strongly enforced privacy and competition rules,” he added.

Franco-German reforms could include the introduction of a veto from EU member countries over Brussels’ merger decisions, or technical changes in accounting for possible future competition from Chinese companies.

”This is ideology,” the former commissioner said, cautioning that such one-size-fits-all methodology would not cope with the challenges presented by China’s rise. Instead, he insisted that regulators would always have to decide on a case-by-case basis which consumers would be adversely affected by any merger.

Monti warned that while debate on competition rules is welcome, Paris and Berlin “jumping” to change the treaty basis of the EU’s competition regime would be imprudent, given the “huge resilience” of that competition system since its creation in 1957.

He argued that the debate should not focus so much on principles, but rather on how rules are implemented: “It is more productive if the discussion focuses on the concrete modalities of applying the rules.”

Monti’s own track record illustrates that philosophy. He reformed competition policy in Europe between 2002 and 2004, clarifying how antitrust rules should be applied in antitrust and in merger control.

“When France and Germany are together, that means that the EU can move” — Mario Monti

Turning specifically to Franco-German concerns about the merger between Alstom and Siemens, Monti said: “The natural way to oppose a decision and have it annulled is to refer it to the European Court of Justice.”

The merger was blocked partly on the grounds that China is not yet a competitor in the European market. If the factual basis for that assessment were to change over the course of a lengthy appeal, the decision could be revised.

In the longer term, he hopes that Paris and Berlin would work together in a more fruitful direction. “When France and Germany are together, that means that the EU can move,” although it “remains to be seen case by case whether the movement is in the good direction or not.”

Asked whether there were other options than changing competition rules to tackle the Chinese threat, he argued that “it needs to be underlined that competition policy is not the only policy of the EU.”

He suggested that trade policy could play a more “forceful” role: “The single market should be opened, but not disarmed.”