Document Type

Article

Disciplines

International Law

Abstract

In dealing with Europe in business matters, the U.S. has played a dominant role for many years. The Europe of today, however, is more united economically, socially, and politically than ever. The new order requires that U.S. corporate managers adopt a different attitude in dealing with the European Union (E.U.), which is steadily increasing its power. The genesis of increasing European power with respect to the U.S. began imperceptibly in 1957 with the signing of the initial Treaty of the European Economic Community (EEC Treaty or Treaty of Rome),' and has culminated recently in a refinement of the supranational concept of the E.U. through the single monetary system instituted in twelve countries in 2002,2 the pending adoption of a European constitution,3 and the addition of ten additional Member States in 2004.' Consequently, a more powerful entity is now being created in which there is an increasing extraterritorial intrusion of E.U. authority into U.S. business policies.

Although the increasing E.U. strength is beginning to manifest itself in many sectors affecting U.S. businesses, the merger/competition area presents the best recent examples of the impact of the E.U. flexing its muscle in the global marketplace. In 2001, the American business community was stunned when the European Commission (EC or Commission)' followed the recommendation of its Directorate-General for Competition (DG Competition) and blocked the $44 billion6 mega-merger between General Electric Corporation (GE) and Honeywell International Corporation (Honeywell)7 after the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) granted final approval for the merger.' Microsoft, Inc. encountered a substantially emboldened DG Competition that, in March 2004, levied against the company the largest fine in the history of the EC9 and ordered it to unbundle Media Player from its Windows operating system and disclose complete interface documentation, which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

To emphasize the much broader issue of the increasing extraterritorial influence and intervention of the E.U. into American multinational business operations, the authors utilize the GE-Honeywell merger case and recent EC antitrust actions against Microsoft, Inc. An analysis of these cases, the difficulties encountered by American companies resulting from the divergent merger/competition rules of the E.U.-U.S. and the creation of the International Competition Network (ICN)" which is formalizing cooperative global initiatives to reduce the tensions created by divergent competition rules - interwoven with the relevant historical and political elements in the development of an integrated and more powerful Europe - serve to provide a better balanced perspective and framework for evaluating the implications for the overall relationship between the E.U. and U.S. multinational businesses.

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