Accessibility links

European Commission Fines DaimlerChrysler - 2001-10-10


The European Commission has blocked a takeover in the French electronics industry and fined the giant multi-national automaker DaimlerChrysler $65 million for obstructing cross-border car sales. The moves Wednesday are another example of the commission's determination to police competition, following its veto earlier this year of a merger between General Electric and Honeywell.

The European Commission, the executive body of the 15 nation European Union, says DaimlerChrysler violated competition rules by barring German dealers from selling Mercedes Benz automobiles in countries outside Germany.

It also found that DaimlerChrysler instructed its dealers to demand that foreigners, but not Germans, pay a 15 percent commission when buying a car in Germany. The commission says the company limits the sales of cars to leasing companies in Germany and Spain, and it accuses DaimlerChrysler of restricting rebates offered by Mercedes dealers in Belgium from 1995 to 1999.

European Competition Commissioner Mario Monti says those practices are unacceptable and must be severely reprimanded. The $65 million fine was the third largest imposed by the European Commission on an individual company. DaimlerChrysler says it will appeal the decision.

Meanwhile, the commission vetoed a proposed merger of French companies Schneider Electric and Legrand, which would have created the world's biggest manufacturer of low-voltage electrical equipment. The commission says the merger would have been a blow to competition in the French and European electronics industries.

Mr. Monti also gave giant U.S. software manufacturer Microsoft more time to respond to antitrust charges it leveled at the company last August. The Wall Street Journal reported that the European Union would seek a fine from Microsoft, but Mr. Monti says that is not the case, at least not yet. "To speak of a fine when Microsoft has not yet disputed the commission's preliminary findings, both in fact and in law, as is its right, is premature," he said.

Mr. Monti says the commission will make a final decision on the Microsoft matter after the company replies to its antitrust concerns. The commission says it suspects Microsoft is violating antitrust laws by combining its Media Player into its Windows operating system.

The European Commission has not shied away from going after non-European firms. In July, it blocked a $45 billion merger between U.S. companies General Electric and Honeywell, saying the deal would have restricted competition in the aerospace industry.

It was the first time that a U.S. corporate merger was blocked solely by European Union authorities. Both companies have challenged the decision before the European Court of Justice.

XS
SM
MD
LG