Straight talker takes on airline barons

Profile: Karel Van Miert, ensuring fair play before British Airways and American Airlines join forces
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The Independent Online
THE unpretentious straight- talking ways of a Flemish farmer's son blended with a gracious charm have made Karel Van Miert something of a media darling in Brussels. But he leaves his smile and his perfect manners outside the door when it comes to dealing with the giants of global business such as British Airways.

Next week the European Competition Commissioner will finally rule on BA's long-delayed alliance with American Airlines and the betting is that Mr Van Miert will be as steely and unyielding as he has been in past encounters with the big battalions of the aviation industry.

Brussels has been investigating the BA-AA tie-up for almost two years along with a number of other alliances between European and US carriers and Mr Van Miert is determined that if it goes ahead it will not be to the detriment of competition and airline passengers.

In the early stages of the investigation Mr Van Miert came under attack from BA bosses who accused him of flawed reasoning and delaying tactics. But like other big merger candidates before them, BA has ended up having to take Brussels seriously and bow to the conditions it intends to impose on the alliance. Mr Van Miert is dertermined that BA and AA must surrender at least 250 precious runway slots at Heathrow as the price for permitting the deal to proceed.

"I think they probably expected to get away with it in Britain on conditions which would suit them," he says. "But if they expected us to keep quiet and close our eyes, they were misguided and they underestimated the role of the Commission.

"Do you think this is a game between gentlemen?" he says, raising an eyebrow. "We are talking about big companies trying to get their way without having to respect the law."

Mr Van Miert insists he is not out to stymie big business. "It is utterly unfair to suggest that," he says, presenting himself as the impartial referee in a global game of football - the man the little guy or consumer can rely on to make sure there's a level playing field and to uphold the rule of law.

Although Mr Van Miert has nothing in principle against mergers - the Commission has blocked only nine out of the 800 which have been referred to it in the last 10 years - the rigour with which Brussels vets them and the conditions attached are likely to get tougher.

"More and more the question will be asked: Is this not going too far?" he says. He cites the extent to which competition has been squeezed out in a number of different markets. In civil aviation, there are "only two big guys left and only one, Boeing, which is able to offer the full range of aircraft." In auditing and consulting, only the big five accountancy firms have survived. "So other big companies start to worry and complain and they expect the Commission to act ... we have to be consistent. This is not always understood, and on top of that the perception of the cases is always a very national one."

Mr Van Miert says he is as immune to political pressure as he is to sniping from international boardrooms. He shrugs off recent attempts by the German government to force him to back down on the Kirch-Bertelsmann television link-up ruling. "If you have been around as long as me you know you have to live with this. It is my constant preoccupation to ensure the Commission operates as an independent authority."

Nor does he have any time for German calls for a new European competition agency, entirely separate from the Commission. Some, he says, would seize on this merely as the opportunity to emasculate the Commission.

Mr Van Miert admits, however, to some alarm at the volume and complexity of cases the Commission is having to take on with limited resources and staff. "More and more, we are not just approching but touching the limits of what we can reasonably expect from our officials and that is a real problem," he says. The cases are becoming more complicated, but also the burden of having to translate every document into the EU's 11 official languages is enormous. Cartel investigations in Scandinavia have been hampered by language barriers, he admits.

The result, he concedes, is that the Commission is having to prioritise, tackling the most urgent cases first and leaving others on the back burner. "Take the airline alliances," he says. "We will be criticised for not handling them all together. We opened them all together but we simply do not have the human resources to see them all through to conclusion simultaneously."

The charge from across the Atlantic is that Mr Van Miert's motivation is the protection of European industry rather than strict adherence to competition rules. The grumbling rose to open criticism when he threatened to rule against the link-up between Boeing and McDonnell-Douglas unless Boeing renounced exclusive supplier deals. But Mr Van Miert remains defiant about his handling of this high-profile case. "The US just did not take us seriously," he says. "They thought they could get away with it. They were utterly mistaken. They had to accept that in the EU we now have a fully fledged competition authority and they did not like it one bit. But does that mean we should refrain? Absolutely not!"