EC wrong on Worldcom / Sprint deal
Court spanks Monti
Competition Commissioner Mario Monti suffered an embarrassing defeat in a Luxembourg court this week - it ruled that his decision on the Sprint-Worldcom merger was illegal.
Sprint and Worldcom were to merge in 2000 but called the marriage off after a distinctly negative reaction from US and European Commission regulators. The European Court of First Instance ruled that Monti should not have got involved.
The Court said that Monti should not have made a decision on the deal because Sprint and Worldcom wrote to the Commission telling them they were calling the deal off.
The verdict does not consider the rights or wrongs of the decision only whether the Commission should have issued a ruling. The Commission, the Court said, "no longer had the power to adopt the decision after the proposed merger..... had been abandoned".
The Competition Commission described the decision as "a technicality". US authorities had already ruled against the merger before the EC decision was announced.
Worldcom ended up in Chapter 11 bankrupcy protection and its chief executive Bernie Ebbers was charged with massive accounting fraud. The company now trades as MCI.
MCI welcomed the decision, telling newswires: "Today's favorable ruling will ensure that future technology services transactions will receive a fair and appropriate review." ®