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Will The DOJ’s Holiday Greeting To The EC Bring Holiday Cheer?

Posted  December 29, 2009

The DOJ’s Antitrust Division has sent the European Commission a holiday greeting that appears designed to mollify the EC after a DOJ statement last month that the EC viewed as a lump of coal in its Christmas stocking.

“The Department of Justice’s Antitrust Division commends the efforts of the European Commission …”  These were the opening words of a surprising statement issued by Assistant Attorney General for Antitrust Christine Varney on December 16.

Ms. Varney was saluting the settlement agreement reached by Microsoft and the Commission in the internet browser tying case.  Microsoft was alleged to have abused its dominant position in the market for PC operating systems by tying its Internet Explorer browser to its Windows operating system.  In settling, Microsoft agreed to a five-year commitment to offer Windows users a ‘browser Choice Screen’ where they can choose to install one or more of the 12 most popular web browsers.

Just a few weeks prior to Ms. Varney’s statement, the Antitrust Division had issued a press release essentially urging the European Commission to follow its lead in clearing the acquisition of Sun Microsystems by Oracle.  The statement read in part: “After conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive. This conclusion was based on the particular facts of the transaction and the Division’s prior investigations in the relevant industries… At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.”

It is rare, although not unprecedented, for a U.S. antitrust enforcement official to criticize the actions of a foreign antitrust agency in a specific case.  In past days, AAG Charles James slammed the European Commission’s decision to block the GE/Honeywell merger, and AAGs Hewitt Pate and Thomas Barnett released statements taking issue with the decisions of the Commission and Court of First Instance, respectively, in the Microsoft interoperability/media player case.

What was striking about the Division’s statement on the Commission’s Oracle/Sun investigation was that it was a public statement concerning a pending investigation. The European Commission appeared to have felt that the DOJ had crossed a line. European Competition Commissioner Neelie Kroes immediately fired back, declaring that it was not “normal” practice for her “colleagues in Washington” to “publish a statement.”  Her spokesman added:  “That’s unusual. I cannot recall any instance where the European Commission has ever issued a statement concerning ongoing investigations in another jurisdiction.”

Ms. Varney’s statement praising the Commission for settling with Microsoft may be viewed as an effort to appease the EC after last month’s statement regarding Oracle.  If the EC views the combination of the two statements as more meddlesome than supportive, however, the DOJ’s new adviser for international matters, EU Competition Law expert Rachel Brandenburger, may be looking for additional ways to spread goodwill in the coming year.

Tagged in: Antitrust Enforcement, International Competition Issues,