EU Taking Second Look at Past Deals -- WSJ
March 25 2017 - 2:02AM
Dow Jones News
By Natalia Drozdiak
BRUSSELS -- The European Union's antitrust chief said Friday
that her department is reviewing a handful of recent merger
clearances on suspicions companies misled investigators in securing
approval.
The unusual reassessment could lead to formal charges and
ultimately significant fines for the companies or -- though highly
unlikely and complicated -- withdrawal of clearances.
In similar circumstances, the regulator leveled charges in
December against Facebook Inc. In that case, the EU accused the
social-media company of giving incorrect or misleading information
to regulators reviewing its planned purchase of chat app WhatsApp
in 2014. Facebook said it provided accurate information to the EU
about its plans and technical capabilities.
In an interview, Margrethe Vestager said the European
Commission, the EU's antitrust regulator, was scrutinizing
instances in which company representatives from a range of
industries intentionally or negligently misinformed regulators
studying proposed mergers.
"In each and every individual case...we need correct
information, in order to have the very high quality of our casework
that we want to have, " Ms. Vestager said. "We have found in more
than one case that there was a case of misleading information."
The EU declined to identify the companies under the microscope
but indicated the cases involve merger reviews that took place
within the past five years. The commissioner said the EU was still
deciding whether to file formal accusations outlined in what is
called a statement of objections.
If found guilty in such cases, companies face fines of up to 1%
of global revenue. In an unlikely scenario, the EU could also
revoke its clearance of the merger if more accurate information
could have led to a different decision.
The EU has already said its case against Facebook won't affect
its clearance of the WhatsApp deal, which closed in 2014.
The commission suspects Facebook inaccurately claimed during the
review in 2014 that it couldn't routinely match Facebook and
WhatsApp user accounts -- something the company started doing two
years later when it began combining user data across the services.
The antitrust regulator is currently analyzing Facebook's response
to the accusations, Ms. Vestager said.
Such cases are rare in Europe given the threat of fines and
other sanctions. Lawyers representing companies in the
merger-review process can also be stripped of their licenses to
practice law if they are found to have intentionally misled
regulators. The EU said that prior to the Facebook case it hadn't
pursued such action since new rules that boosted fines came into
effect in 2004.
Ms. Vestager said the commission over the past year looked at
several cases involving misleading information, but that they
wouldn't all necessarily be formally opened or decided upon as a
package.
"We have to respect the flow of each individual case, even in
these areas where it's procedural concerns that we have," she
said.
In the interview, the EU antitrust chief spoke about its three
open cases against Alphabet Inc.'s Google, including one in which
the EU has accused Google of skewing its online search results to
favor its comparison-shopping service. Google rejects the EU's
accusations in all three cases.
On the shopping case, Ms. Vestager said the EU was approaching
"a final phase" of its investigation, adding that any decision
against Google likely would involve remedies that are
"future-proof" and therefore likely broader in scope.
"Instead of being specific on page design or screen design, I
think it's very important [for us] to focus on how to allow
competition," she said. "If you're very specific about what design,
you may very quickly be caught up in time."
In a statement sent last year setting out its charges against
Google in the shopping case, the EU sketched out ways Google should
change its business practices to assuage the bloc's antitrust
concerns.
"Remedies may require Google to position and display
competitors' comparison shopping services in the same way as it
positions its own comparison shopping service in general search
results," the EU shopping charge sheet said.
The EU also has formally accused Google of violating the bloc's
rules by abusing its dominance with its Android mobile-operating
system as well as its advertising service Adsense.
Write to Natalia Drozdiak at natalia.drozdiak@wsj.com
(END) Dow Jones Newswires
March 25, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Mar 2024 to Apr 2024
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Apr 2023 to Apr 2024