Sommer attacks EU competition regime

Big is good

Ron Sommer, chairman of Deutsche Telekom, attacked "parochial" European competition law, at CeBIT 2000. Outlining his special agenda for TIMES,(Telecommunications, Information Technology, Multimedia, Entertainment and Security Services), Sommer said he wants DT to become a player unconstrained by the present competition law in Europe, and that "parochial attitudes stifle progress. "Even after two years of liberalisation throughout Europe, the degree of access to telecommunication markets for newcomers as well as the level of free-market competition still vary from country to country... We need a larger market in Europe," he said. "Enterprises with substantial financial clout are needed in order to invest billions in innovative technologies... A few years ago this principle was not accepted... there is still a tendency among Europeans to view this new and necessary order of magnitude as a threatening factor or an attempt to secure market domination." Big is good He continued: "The situation can arise, of course, as we have seen recently with Microsoft, and it is clear from this case that the Americans are also aware of the risks." He warmed to his new theme of big is good: the AOL Time-Warner merger "is likely to be a further leap forward in innovation. Yet such a merger... would almost certainly not be approved at the present time by any government in Europe... as it would put too much power in the hands of one market player." His conclusion was that "in Europe we tend to focus too much on the risks, and less on the opportunities. Consequently, we are in danger of missing out on important opportunities." Sommer had his solution to his problem with European competition policy: "we're labouring under a handicap compared with the USA... we [need] market conditions in our continent that allow companies to develop their full potential for innovation. We therefore need rules governing competition which are global in their scope, which are observed by all the players, and whose observance can be globally verified." He confessed that Germany had "a reputation for being somewhat cautious, not to say downright hostile towards new technologies". Evidently, Sommer thinks competition law needs to be changed at a European level, as well as in Germany, to favour his globalisation desires; he wants to work with the European Commission and the German government to achieve this. The irony is that European competition law was closely based on the German law. Even if that were achievable - and it seems doubtful - it could only apply within the EU. Sommer's solution should be to tackle the WTO, especially in view of the recent victory to stop favourable and discriminatory foreign sales corporations tax treatment for US business. But getting WTO agreement to any globalisation plan could be even more difficult. ® CeBIT 2000: Full Coverage

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