Monti strikes blow for openness in hearings

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Series Details Vol.7, No.20, 17.5.01, p25
Publication Date 17/05/2001
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Date: 17/05/01

By Peter Chapman

Mario Monti is set to silence who claim the European Commission is not serious about plans to inject more openness into merger and price-fixing cases.

The Competition Commissioner will next week announce radical plans for a new, unbiased role for the official who ensures that companies get a fair hearing during contentious merger and anti-trust investigations.

Crucially, aides to Monti say he plans to let companies see the report by the 'hearing officer' if there is a question over whether they have been given a fair deal. They say this will also be sent to member states and other interested parties.

The surprise move is a sign that Monti has accepted a key criticism by former official John Temple Lang, who the left hearing officer job last year citing the Commission's reluctance to make serious reforms to the post. His stance was also supported by the UK's House of Lords.

"The Commission had to give it some thought. Monti came to the conclusion that would be a good thing," said one Commission source.

In an interview with European Voice, Temple Lang said circulating the hearing officer's report was essential if the institution was to shrug off its role as both "prosecutor and judge" in merger and price-fixing cases.

"It is essential if the job is not to be window dressing," he says of the proposed reform. "The fact is that the Commission is prosecutor and judge and there is no independent voice. It is simply a question of allowing any independent voice within the Commission to be heard outside."

Had Monti not chosen to open-up, the arguments would have started to stack up for "a separate European authority, separate from the Commission with proper procedures," added Temple Lang, now a lawyer with US firm Cleary Gottlieb Steen & Hamilton in Brussels.

He says making reports available will force the Commission to play fair. Plus the EU executive will be able to cite the reports in legal challenges if the hearing officer thinks investigators have not given firms proper rights of defence.

The year-long wait for Monti's proposals to see the light of day is a sign of tensions within the Commission over the reforms which prompted Temple Lang's resignation. The Irishman says many officials were happy with the dissemination of information in complex anti-trust cases - such as price fixing or collusion probes - which often drag on for years.

But he said there was more concern over granting the same rights in merger cases.

But he believes the executive would have found it hard not to grant the same rights in the fast-track vetting of mergers.

In these cases, hearing officers have less chance to get involved and officials must publish the outcome of an in-depth' probe within four months.

"There is no doubt that some of the opposition was coming from people who say 'how can you justify not doing it in merger cases?'" Temple Lang says.

The time constraints, combined with firms' willingness to push through their deals, give officials great leverage in pushing for concessions to offset competition fears.

Although firms can challenge rulings in the courts they are usually forced to bow to Commission pressure. Publishing the reports, it was feared, could undermine this process.

Commission sources say boosting the openness in competition cases would bolster procedures which are already amongst the most transparent in the world.

Erik Berggren, competition expert for business lobby UNICE, claims reform of the hearing officer is vital for keeping the Commission in check as it flexes its muscles in new cases.

These include its controversial decision a year ago to block the merger of US telecoms firms WorldCom and Sprint - a move now being challenged in the European Court of First Instance.

Mario Monti is set to silence who claim the European Commission is not serious about plans to inject more openness into merger and price-fixing cases.

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