Brussels, 16/05/2002 (Agence Europe) - During a meeting with the press organised following the conference on "Competition Policy in the 21st Century" (see yesterday's EUROPE, p.8), European Commissioner Mario Monti and the Head of the Antitrust Division of the US Justice Department, Charles A. James, gave details about certain affairs under investigation. Thus:
On-line currency trading: The US Justice Department has opened an inquiry into the electronic exchange service, FXAII, a joint venture created in June 2000 by seventeen American and European financial associations (including Goldman Sachs, CSFB, Bank of America, JP Morgan Chase, Royal Bank of Scotland, Crédit Suisse, Bank of New York, Citigroup), which could constitute a monopoly in this field, confirmed Mr James in response to a question put to him. "It is a significant enterprise", he said, while pointing out that he had "no preconceived notions" at this stage regarding the result. The Wall Street Journal had, on Wednesday, reported that the US Justice Department was concerned about a possible attempt by FXAII to limit competition on the on-line currency exchange market (calling on its members not to work with on-line rival services, such as Currenex). Mr Monti pointed out, for his part, that his services were also interested in this dossier and that an investigation could also be opened on the European side. "This category of problem does concern us … that's as far as I can go", he said.
Ink cartridges: Mario Monti announced that his services had begun an inquiry into an eventual merger on the printer ink cartridge market, following complaints from consumers that the prices practised for these products are far too high. In particular, the Commission suspects the main players in this sector of non-competitive practices and plans to discover to what extent these manufacturers put pressure on consumers so that they give preference to their products rather than to the cheaper products of rival manufacturers. "It is a very important market for consumers. The sector is relatively concentrated and it is the role of our forces to remain vigilant at all times", Mr Monti stressed. Those concerned by the investigation include the American groups Hewlett-Packard and Lexmark, and Japanese group Canon and Epson, who together control the market. According to The Financial Times, their market shares have fallen over recent years with the arrival of competitive firms which re-use used cartridges in which they reinject ink, products sold far less expensively than new cartridges. These companies, says the daily, reportedly hold 11% of the world market, corresponding to around $3 billion. To defend their position, HP, Lexmark, Canon and Epson have perfected a technique that would prevent the re-use of cartridges by introducing a "killer" computer chip into the cartridges. According to the Commission, the companies under investigation are using their dominant position to reduce competition.
Sogecable/Via Digital: Mr Monti pointed out, on the subject of the merger between the Spanish platforms Sogecable and Via Digital, that conditions are met for an examination by his services. He said, however, that he was ready to examine a request for eventual request for referral on the part of the Spanish authorities. To date, however, the Commission has not yet received notification from the companies involved. (See EUROPE of 13/14 May, p.14).
Visa: The Visa affair has been under Community investigation for almost two years. "It is a very old affair", says Mario Monti, answering questions on this issue, that he would like to see settled by August. We recall that Visa imposes an exchange rate on associated banks and that these banks, in turn, pass it on to traders who use the Visa service. The Commission considers this charge is tantamount to restriction of competition as it is equivalent to a price agreement. Mr Monti recalled that, following the letter of grievances sent to Visa in October 2001, the company had agreed to substantially reduce the charges, and that its services were preparing to close the issue in coming weeks. Sources familiar with the issue point out that the decision could be in Visa's favour. Mr Monti did not confirm anything, but simply stressed: "the decision cannot meet with everyone's satisfaction (…). It will be taken on the basis of facts, and not under pressure from certain sectors".
Microsoft: In answer to questions on the Microsoft case and on a parallel to be drawn between the American and European cases, Mr James did not comment on the matter of whether he considered it appropriate to separate Media Player from Windows to settle the dispute that opposes the American giant to the European Commission, saying that the matter under investigation in the United States was different from that being examined in Brussels. "We have our case", he said. Mr James also declared, on the fringe of the conference, that the notion of abuse of monopoly, on which European objections are based, does not have the same importance in the United States, where the company can take advantage of its dominant position. "Our courts have said very clearly that a firm may legitimately carry advantages gained in one market into another market", he thus said. (See EUROPE of 14 March, p.15, and 11 May, p.8).