Posts Tagged ‘European Commission’
Monday, March 29th, 2010

The Justice Department said Monday morning it has cleared networking giant Cisco Systems Inc.’s  bid to acquire video conferencing provider Tandberg ASA. In a statement, the agency emphasized it had “cooperated closely” with its European counterparts in reviewing the deal, a sign of a smoother relationship between Brussels and Washington D.C., after the two agencies clashed on a similar deal earlier this year.

Cisco, Tandberg, and other industry participants signed waivers for the Antitrust Division and the European Commission’s Directorate General for Competition to share information and coordinate on potential remedies to ensure interoperability between Cisco’s new teleconferencing products and those of other companies. The Justice Department said it had taken those commitments into account, along with other factors, in reaching its determination not to challenge the deal.

“This investigation was a model of international cooperation,” Antitrust chief Christine Varney said in a statement. “The parties should be commended for making every effort to facilitate the close working relationship between the Department of Justice and the European Commission.”

The two agencies clashed last year in reviewing database software provider Oracle Corp.’s $7.4 billion purchase of Sun Microsystems Inc. The Justice Department OK’d the deal last summer, but European Union officials issued a set of objections to the sale in early November.

The DOJ responded to those objections by saying the sale did not raise major anti-competitive concerns and nudged the E.U. to clear the transaction.  Brussels responded with visible annoyance, but eventually cleared the deal.

Then in November, the Justice Department hired E.U. antitrust expert Rachel Brandenburger as a new adviser on international matters. A better working relationship between the two agencies seemed to follow. When the DOJ signed off on Microsoft Corp.’s advertising pact with Yahoo! Inc. in February, for example, it waited until European regulators had announced a decision.

On the Cisco deal, the DOJ said it was satisfied with the commitments the company made to Brussels. Cisco promised that its teleconferencing products could operate with products from other companies. Cisco had already entered the videoconferencing business when it announced its $3 billion purchase of the Norwegian company last October. The E.U. announced its decision earlier today.

“The commitments are designed to foster the development of open operating standards,” the DOJ said in its statement. “The department views those commitments as a positive development that likely will enhance competition among producers of telepresence systems.”

Cisco could not immediately be reached for comment on how the trans-oceanic review was handled.

Wednesday, March 10th, 2010

The European Commission is taking a more aggressive stance than the U.S. Department of Transportation regarding a proposed alliance between European and American airlines. But the EU position is still kinder than what the Justice Department’s Antitrust Division wanted.

If approved, the alliance would allow British Airways, American Airlines, and Iberia to jointly market, schedule and price flights.

Both the European Commission and the Transportation Department have to sign off on the alliance in order for it to go into effect. The Justice Department’s role is only advisory.

The EU is considering a proposal by the airlines to make some changes to the alliance in order to gain approval. According to the proposal currently being tested by Brussels regulators, the airlines would lease takeoff and landing slots at London’s Heathrow Airport so that other competitors can operate two additional daily flights to New York and Boston and one additional flight per day to Miami and Dallas.

The Justice Department had singled out those routes for scrutiny and said that fares between the American Airlines hubs in Chicago, Miami and Dallas and British Airways’ hub in London would increase if the alliance was approved.  The DOJ suggested the Transportation Department should take some routes out of the plan and force the airlines to give up slots at Heathrow in order to alleviate its concerns.

In its filing about the case, the Justice Department did not specify a number of slots. In a previous attempt to gain approval for the alliance in 2001, the DOT had asked the airlines to surrender 16 slots per day.

This time around, the Transportation Department only asked the airlines to give up four pairs of slots at Heathrow.

The European plan is asking for more specific commitments than DOT, but did not suggest taking any routes out of the grant of antitrust immunity, as DOJ had recommended.

Wednesday, February 24th, 2010

The battle between Google, Inc. and Microsoft Corp. has now kicked into high gear on both sides of the Atlantic.

On Tuesday, Google acknowledged that European antitrust regulators had opened an inquiry into its business practices, at the behest of some Microsoft-connected firms. The announcement of the European probe comes after recent disclosures that German antitrust authorities were investigating similar claims.

In the U.S., Google has not had it any easier. Earlier this month, Google was hit with its second U.S. antitrust lawsuit brought by the same lawyers who have long advised Microsoft.

In January, Google filed suit against a comparison shopping site in Ohio state court, hoping to collect on $335,000 in unpaid bills.

Instead of paying the bill, myTriggers enlisted the help of both Microsoft’s antitrust lawyer, Rick Rule at Cadwalader, Wickersham & Taft, and famed trial lawyer Stanley Chesley, who worked on several of the largest settlements of the past few decades including those for the Lockerbie bombing and Dow Corning’s injury-prone silicone breast implants.

(Creative Commons)

The company then filed a counterclaim earlier this month accusing the search giant of violating antitrust laws by manipulating search results to punish potential rivals.

“Google employs a variety of exclusionary acts that ensure that rivals cannot divert traffic to their own competing search websites, particularly if the effect of such diversion is substantially to compete against Google’s dominant platform,” myTriggers said in its complaint.

Rule also advises another search engine,, which filed a similar suit against Google in a New York federal court last year.

Observers have questioned both lawsuits’ ties to Microsoft, but in an interview with Main Justice, Rule denied Microsoft’s interest in either matter.

“Microsoft is not involved,” he said, “our clients are only the named plaintiffs.” Rule declined to explain how his firm was hired in either case, but did say: “It is my practice to answer phone calls, and I’ve been blessed that I haven’t had to go out and elicit clients.”

Microsoft-related entities also appear to be going after Google on the other side of the Atlantic.

In a blog post last night, Google acknowledged that it had received word from the European Commission that it was investigating complaints filed by three companies accusing Google of manipulating its search rankings to punish other search engines and engaging in other anti-competitive conduct.

“This kind of scrutiny goes with the territory when you are a large company,” wrote Google senior competition counsel Julia Holtz,  on the company’s blog.

In her discussion of the investigation, Holtz fingered Microsoft as the unseen hand directing the complainants. One, a U.K.-based shopping search site called Foundem, is part of a Microsoft-backed organization called ICOMP, she said.  Another, a search engine called Ciao!, was bought by Microsoft in 2008. The third company is a French legal search engine,

The attacks against Google are reminiscent of similar campaigns against Microsoft over the past two decades.

“It’s not surprising that Google would start to see lawsuits, and it’s ironic that Microsoft is trying to foist upon Google the experience it had,” Andrew Gavil, a professor at Howard University’s law school, said in an interview.

But just how much Google’s experience will mirror Microsoft’s is unclear.


“In contrast to Microsoft, you don’t have a clear package of conduct that is identified as being anticompetitive,” Gavil said.  ”For all the discussion on Google, no one can point to the core group of anti-competitive conduct. Individual firms are complaining about practices particular to them, but there is no broad based attack on the market.”

Industry groups that have long been a part of tech antitrust battles also said Google’s conduct did not raise as many concerns as previous investigations.

“We have for over 30 years been involved in fighting the biggest and most abusive monopolies and industry heavyweights who have abused their power,” said Edward Black, president of the Computer and Communications Industry Association, which counts both Google and Microsoft as its members. “We do not see Google’s behavior fit that pattern.”

In its lawsuit last year, TradeComet alleged that Google massaged its Web site ratings, known as quality scores, to make TradeComet’s ads prohibitively expensive once it realized the company posed a potential threat to its business.

Google says a Web site’s quality score is based on the number of users that have clicked on its link in the past, and search advertising analysts have said there usually is a strong correlation between the two.

MyTriggers’ case also accused Google of punishing its site in search rankings, but it goes further. The complaint argued that Google entered into “favorable agreements” with,,,, and others but discriminates against other search websites.

The complaint alleged Google entered into “horizontal agreements” with some rivals to use the same quality score for certain advertisers. It further accused Google of maintaining a secret “whitelist” of firms that are blacklisted by it and the other search sites it has agreements with.

Since March 2008, according to the complaint, myTriggers rates to advertise on Google and other search sites rose between 1,000 percent and 10,000 percent.

The TradeComet complaint included accusations of one similar partnership, between Google and, but a executive from that Web site told the New York Times last year it had no special relationship with Google.

Whether such agreements violate any laws might have to play out in court. “There is nothing wrong with partnership agreements, there’s no abstract reason that these need to be illegal, but if it was tantamount to an agreement on price,” there could be a problem, said Geoffrey Manne, a former Microsoft lawyer who is now a professor at Lewis & Clark Law School in Portland, Ore.

Rule said he looked forward to his day in court. “The complaint speaks for itself. The whole point of litigation is a plaintiff’s ability to prove its case, and to be awarded damages for the violation,” Rule said. “That’s what this is about.”

Last year, Wired magazine detailed Microsoft’s efforts to tar Google’s reputation.

Monday, February 22nd, 2010


In an interview with the Seattle Times, Microsoft’s top lawyer likened the company’s recent discussions with antitrust regulators in Brussels to scenes from the movie ‘Fatal Attraction.”

“Each time they thought they had reached a settlement,” Microsoft’s general counsel Brad Smith related to his hometown paper, “someone would come back and try to kill the agreement, like psychopath Alex Forrest rising from the bathtub with a knife.”

In December, Microsoft and the European Commission announced a truce in their long-running battle. The Commission would drop its antitrust investigation into the software giant, and Microsoft would offer Windows customers in Europe the option of using browsers that compete with its own Internet Explorer.

The settlement took months to reach, Smith said. His days catered to the Brussels work-day, with 8 a.m. conference calls with the Commission’s attorneys, and 10 p.m. proposals sent to them to review, according to the paper.

The contact added up to 24 video conferences, 34 conference calls and 76 e-mail submissions, the Times reported.

The commission’s lawyer on the deal, Philip Lowe, told the Seattle Times that Smith was “somebody who comes out, looks for a solution, gets things done, remains calm.”

Read the whole profile of Smith’s career, starting with his time at Covington & Burling, here.

Monday, January 25th, 2010

Europe’s antitrust regulators have opened a probe into a joint venture between two of the world’s three largest iron ore producers, the European Commission said in a statement today.

The Commission’s competition arm is investigating a deal inked last month between Rio Tinto and BHP Billiton to combine iron ore assets in Western Australia. Authorities are focusing on how the deal affects prices in the market for iron ore transported by sea, according to the agency’s statement.

Iron ore is is used to produce steel.

BHP abandoned its 2008 hostile bid for Rio Tinto amidst falling commodity prices and regulatory hurdles. Regulators in Brussels were closely examining that deal.

A European steel industry group, Eurofer, said the new joint venture would have the same impact on the market as a full merger, according to the Associated Press.

The group said BHP and Rio Tinto could share information that would affect “industry negotiations to set benchmark prices and volumes,” the AP reported.

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Thursday, January 21st, 2010

Oracle Corporation announced today that the European Commission has signed off on its $7.4 billion proposed acquisition of Sun Microsystems, Inc.

The company said it expects to get approval from Chinese and Russian authorities, and close the deal, “soon.”

The Justice Department cleared the deal last year, but European antitrust regulators held up the proposed acquisition, citing concerns about the potential for the deal to decrease competition in the database software industry.

Critics worried that Oracle might kill off Sun’s open-source software, MySQL, which, they said, was growing into a competitive threat to Oracle’s database products. The European Commission issued a preliminary statement of objections, but Justice Department regulators said they did not have the same concerns.

The differences of opinion led the two competition authorities to exchange tense statements questioning the judgment of the other.

U.S. lawmakers got involved, and sent a letter to the European Commission arguing that Sun was bleeding both money and jobs while it waited for regulatory approval.

After Oracle agreed to maintain MySQL, the Commission signaled it would approve the deal.

Assistant Attorney General of the Antitrust Division Christine Varney was recused on the Oracle review because she had previously handled work for Sun as a partner at Hogan & Hartson.

Wednesday, December 16th, 2009

The European Commission today announced it had dropped an antitrust case against the software maker after it agreed to give consumers easier access to rival Web browsers.

The competition regulator of the European Union had been investigating Microsoft since 2007 over the matter.

The maker of Windows said it would offer an update to users who chose its Explorer browser through a default setting on the computer operating system software. The update next year will allow those users to select other browsers including those made by Google, Apple and Mozilla.

Microsoft has agreed to offer a Windows Update that includes a “Choice Screen” which will allow users to choose their preferred browser. In addition, computer manufacturers will be able to install browsers other than Internet Explorer and set one of those as the default browser. The agreement covers the 27 member countries of the European Union and Norway, Iceland and Liechtenstein.

The Norwegian maker of the Opera browser had complained to the commission in 2007 that Microsoft used its near-monopoly position in the PC-operating system market to stymie competition among browsers.

In a statement, EU Competition Commissioner Neelie Kroes said: “Millions of European consumers will benefit from this decision by having a free choice about which web browser they use. Such choice will not only serve to improve people’s experience of the Internet now but also act as an incentive for web browser companies to innovate and offer people better browsers in the future.”

The commission previously had fined Microsoft €1.68 billion, or $2.44 billion, for business practices related to the markets for back-end sever software software and media players.

Brad Smith, Senior Vice President and General Counsel at Microsoft, on Wednesday released the following statement:

“We are pleased with today’s decision by the European Commission, which approves a final resolution of several longstanding competition law issues in Europe. We look forward to building on the dialogue and trust that has been established between Microsoft and the Commission and to extending our industry leadership on interoperability.

Today’s resolution follows years of intensive examination by the European Commission of competition in computer software. The measures approved today reflect multiple rounds of input from industry participants relating to competition in Web browser software and interoperability between various Microsoft products and competing products.

The Web browser measures cover the inclusion of Internet Explorer in Windows for users in Europe—specifically the region known as the European Economic Area, which includes 30 nations. Under today’s resolution, Microsoft commits that PC manufacturers and users will continue to be able to install any browser on top of Windows, to make any browser the default browser on new PCs, and to turn access to Internet Explorer on or off. In addition, Microsoft will send a “browser choice” screen to Windows users who are running Internet Explorer as their default browser. This browser choice screen will present a list of browsers, making it easy for users to install any one of them. It will be provided both to users of new computers and to the installed base of Windows XP, Windows Vista, and Windows 7 computers in Europe where Internet Explorer is set as the default browser.

The second measure is a “public undertaking” that covers interoperability with Microsoft’s products—the way our high-share products work with non-Microsoft technologies. This applies to an important set of Microsoft’s products—our Windows, Windows Server, Office, Exchange, and SharePoint products. We believe it represents the most comprehensive commitment to the promotion of interoperability in the history of the software industry. Under this undertaking, Microsoft will ensure that developers throughout the industry, including in the open source community, will have access to technical documentation to assist them in building products that work well with Microsoft products. Microsoft will also support certain industry standards in its products and fully document how these standards are supported. Microsoft will make available legally-binding warranties that will be offered to third parties.

Our interoperability undertaking reflects the policy outlined by the European Commission in a major policy speech given by Commissioner Neelie Kroes in June 2008. At that time, the Commissioner said that companies offering high-share software products should be required to (i) disclose technical specifications to enable interoperability; (ii) ensure that competitors can access complete and accurate information and have a remedy if not; and (iii) ensure that the technical specifications are available at fair royalty rates, based on the inherent value of the technology disclosed. Our interoperability undertaking, developed through extensive consultation, implements this approach in full.

As we’ve said before, we are embarking on a path that will require significant change within Microsoft. Nevertheless, we believe that these are important steps that resolve these competition law concerns.

This is an important day and a major step forward, and we look forward to building a new foundation for the future in Europe.”

Tuesday, December 15th, 2009

A trial attorney in the Justice Department’s Antitrust Division, Robert Mahnke, went to Brussels last week for a closed-door hearing on Oracle Corporation’s proposed purchase of Sun Microsystems, Inc., according to a person familiar with the matter.

After competition regulators in the European Union raised concerns about the $7.4 billion deal last month, the Justice Department issued a statement announcing it had not found the same concerns. The different conclusions led to a series of exchanges that highlighted public tension between the two agencies.

According to an attorney who was at the Oracle hearing, Mahnke, who works in the networks and technology section of the division, was in Brusses largely on a peace-keeping mission.

“He was reassuring people that the statement had been misrepresented, and reassuring people it was a bit of a blip. On most things [the two agencies] do see eye-to-eye,” said the attorney who spoke about the closed hearing on condition of anonymity.

A Justice Department spokeswoman did not respond to a request for comment.

While not unprecedented, observers say, the DOJ is not often represented at similar hearings in Europe. “It’s unusual but it seems like it’s a constructive step,” said Douglas Rosenthal, a partner at Constantine Cannon who previously served in the Antitrust Division as head of the foreign commerce section.

“Over the years there have been many meetings at which Europeans sent staff to talk about cases and vice versa,” he said. “It is the next step to be at a hearing.”

The trip comes amid a push on the part of American antitrust regulators to increase cooperation with their counterparts in Europe. Last month, the Antirust Division hired Rachel Brandenburger, a competition lawyer with Freshfields Bruckhaus Deringer in London and Brussels, as a new top adviser on international matters.

The differences over the Oracle-Sun deal involve Sun Microsystems’ open-source database software MySQL. While DOJ attorneys found that MySQL’s light databases catered a different market than Oracle’s heavier product, European regulators argued that MySQL was becoming a competitive threat to Oracle’s proprietary databases, raising the likelihood that Oracle wouldn’t continue to support and develop it.

After the hearing in Brussels, Oracle issued a set of commitments to protect the viability of MySQL. Despite heavy protests from the open-source community, the European Commission has signaled it is moving towards approving the deal.

Monday, December 14th, 2009

After raising preliminary objections to Oracle Corporation’s purchase of Sun Microsystems, Inc., the European Commission signaled earlier today that it was open to approving the deal after Oracle promised to protect Sun’s open-source database software, MySQL.

MySQL is the product is at the heart of the European regulators’ concerns. MySQL’s founder Michael “Monty” Widenius, who has been a vocal critic of the deal, continued his campaign against the sale with a last-minute appeal on his website late Saturday.

Widenius urged users of the database to “help save MySQL from Oracle’s clutches” by writing letters to the commission. He demanded either that MySQL be spun off or that the European Union’s executive arm extract greater concessions from Oracle before approving the deal.

The appeal has resulted in “thousands” of letters to the commission, Widenius policy advisor, Florian Mueller said. The team involved in the case at the European Commission was dealing with a backlog “due to heavy email traffic,” he said. A commission spokesman did not respond to a request for comment.

The campaign found traction online and on Twitter, Mueller said. The blog post had received around 20,000 hits on Sunday, he said, compared to the 200 daily visitors the blog usually hosted.

Mueller also counted around 1,000 related posts on Twitter, including pleas in French and Spanish. “”Is this true!!? Oracle, leave MySQL alone!!,” said one.  ”[I] definitely don’t want to live on a world where oracle own MySQL,” said another.

The grassroots appeals, Widenius said, mirrored Oracle’s request to its customers to file letters of support with European antitrust regulators, who had issued a preliminary set of objections to the deal last month.

The deal had previously cleared antitrust scrutiny in the U.S., and disagreements between the two competition authorities surfaced when the Justice Department urged its counterpart in Brussels to approve the sale.

Widenius’s campaign is reminiscent of previous grassroots opposition to software patents in Europe. This history helps explains the fight in Europen now about MySQL, an open-source, or free, software program that anyone can use or build upon.

The proponents of open-source software say copyright is sufficient and reasonable legal protection for software — much in the way a writer copyrights a book. Patents hobble technical innovation essentially by making it impossible for one programmer to build upon the work of another, the open-source advocates say.

When the EU was considering stricter a patent regime in 2004, demonstrators marched around Brussels in yellow “No Software Patents” T-shirts. In 2005, some 200 programmers descended on the European Parliament with signs demanding the right to freely exchange computer code, beating back a proposed software patent law pushed by Microsoft Corp. and other proprietary software firms.

Such involvement is indicative of both a broader public embrace of open source software in Europe and a more politically active open source community, said Mark Webbink, a professor at New York Law School who previously served as general counsel to Red Hat, Inc., an open source software provider.
“There are lot more independent developers who feel more passionately about the issues and have a greater sense of being able to influence the process,” Webbink said.

Such passion is indicative of both a broader public embrace of open source software in Europe and a more politically active open source community, said Mark Webbink, a professor at New York Law School who previously served as general counsel to Red Hat, Inc., an open source software provider.

“There are lot more independent developers who feel more passionately about the issues and have a greater sense of being able to influence the process,” Webbink said.

The United States has also begun to consider some of the same principles the European coders have raised about intellectual property patents.

The Supreme Court is considering a case, in re Bilski, this term involving patents on business methods, and is expected to narrow the scope of such patents in a way that is more in line with European principles.

MySQL is a database generally used for quick web-based operations, while Oracle’s more complicated databases are used to manage heavy back office functions like accounting and payroll processing.

Critics of the deal contend the two separate database markets are converging, particularly in Europe where companies turn to open source technology more often, and that MySQL is starting to compete in the market for the highest end databases.

These critics worry that Oracle will stop providing the funding MySQL needs to remain competitive, because it could develop into a database that could compete with Oracle’s proprietary products.

Tuesday, December 1st, 2009
Rachel Brandenburger (Freshfields)

Rachel Brandenburger (Freshfields)

The Justice Department’s Antitrust Division has recruited, from Brussels, a new top adviser for international matters, at a time when the Obama administration hopes to smooth over disputes between the U.S. and the European Union on antitrust issues.

The new adviser, Rachel Brandenburger, is an antitrust partner with the United Kingdom-headquartered Freshfields Bruckhaus Deringer and works out of the firm’s London and Brussels offices.

Brandenburger has expertise in counseling clients in cases in front of both the European Commission and UK regulators, according to the biography provided by her firm.

Brandenburger will  join the Division in January, and will report directly to Assistant Attorney General Christine Varney, according to Justice spokeswoman Gina Talmona. Brandenburger also will work closely with Philip Weiser, the Deputy Assistant Attorney General for International, Policy and Appellate Matters.

Brandenburger has worked closely with the American Bar Association’s antitrust section on international competition issues, and has connections to the American antitrust bar.

“She will be a very effective and valuable part of AAG Varney’s team in ensuring that the U.S. remains at the forefront of international competition matters going forward,” said the head of the ABA’s antitrust section, Ilene Gotts, a partner at Wachtell, Lipton, Rosen & Katz, who cites Brandenburger as one of her closest friends. “I am delighted to see this development occur.”

The hire adds visibility to international issues. The move to bring in an “all-star player” is to “upgrade the salience of the international function,” said Bert Foer of the American Antitrust Institute think tank.

Observers also acknowledge that such a hire is unusual, since few can remember another instance of either the Justice Department or the Federal Trade Commission hiring a European antitrust expert who is not a U.S. citizen. The E.U. and U.S. often disagreed on antitrust enforcement during the George W. Bush administration, which had a generally hands off approach. The jurisdictions previously cooperated primarily on price-fixing cases.

The announcement of Brandenburger’s hire follows weeks of public tension between the Antitrust Division and its counterpart in Brussels, the European Commission, over database software provider Oracle Corp.’s proposed purchase of Sun Microsystems Inc.

The Justice Department OK’d the $7.4 billion deal earlier this year, but European Union officials issued a set of objections to the sale in early November.

Molly Boast the Deputy Assistant Attorney General for Civil Matters, responded to those objections with a nudge to the EC to clear the deal. The sale did not raise major anti-competitive concerns, she said.

Fifty-nine members of the U.S. Senate followed up last week, with a letter urging European regulators to approve the deal.

Varney signaled early on in her tenure that the division’s relationship with the European Commission would be a high priority. “In this context of a global economy, divergence in substantive rules and procedural approaches poses significant difficulties for members of the business community,” Varney said in a September speech at Fordham University.

The new position has also been in the works for months, according to Talamona. “One of the first decisions Christine made”  was to hire ”somebody that specializes in international issues,” Talmona told Main Justice.

The search for a top person to fill the post began in April, but the “hiring process can take time,” she said.

Even if the timing is coincidental, antitrust attorneys privately acknowledge that bringing in a new adviser on international issues can help smooth further differences between Washington and Brussels. “Someone who is European can’t be accused of American arrogance,” said one antitrust attorney who spoke frankly about the hire in exchange for anonymity.

This article was updated at 4:05 p.m.