TIM DIRVEN/PANOS for TIME

LOWE RIDER: The E.U.'s competition directorate is widely criticized, and Lowe is its designated listener

Philip Lowe 55, British Why He Matters: He's revamping Europe's antitrust authority, which approves — or shoots down — mergers by the world's biggest companies Location: Brussels

Posted Sunday, Dec. 1, 2002; 15.43GMT
Lowe took over as E.U. competition Commissioner Mario Monti's right-hand man in September, just as a line of twisters hit the Commission — a series of court rulings that overturned three E.U. merger vetoes, including one between French electrical companies Schneider Electric and Legrand and a deal between packaging firms Tetra Laval and Sidel. They were serious blows to the Commission's reputation and left many wondering if Monti would have the stomach to pursue his antitrust case against Microsoft. But Lowe looked at the reversals as a huge mandate for overhauling the powerful competition authority, and that's what he has been doing ever since.

Lowe is the first non-German to head the competition directorate in 35 years, but he's a 30-year veteran of the Commission, speaks German to his secretary and says his view of competition policy is "not fundamentally divergent from the German point of view."

A reform process was already under way in the directorate when Lowe arrived, but Commission officials and antitrust lawyers in Brussels say they can detect his influence on the debate. Lowe says what's needed is essentially due process: a more rigorous market assessment, more testing of Commission theories against competing theories, more care about how the Commission argues its cases legally, and greater vigilance about the rights of parties whose mergers are being investigated. Lowe and Monti have already agreed to bring in a chief economist to provide more intellectual heft to their decisions, and will create a "scrutiny unit" that's supposed to play the role of devil's advocate. Companies involved in big mergers will be able to argue their cause before their transactions are put under official review. "The confrontation of ideas is the key," Lowe says.

	The confrontation of ideas is the key ... we are converging with the U.S., and that's good for business.

The reviews have been fast and positive. "Things have moved very quickly in the past few weeks, and there's now a lively debate internally," says Alec Burnside of attorneys Linklaters. He was recently asked to lunch by Lowe to give his views of what needs fixing, and says he took it as a strong indication that the Commission is opening up to outside criticism.

Lowe doesn't agree with critics who say the E.U. should adopt the more prosecutorial U.S. antitrust model. He says the European one has some big advantages, including tighter deadlines and what he calls a "one-stop shop" — the handling of the entire procedure by his directorate. Nonetheless, Lowe does see a more integral role for the European Court of First Instance, which has developed a fast-track procedure for hearing competition cases and may set up a dedicated antitrust panel of its own. Lowe says there are signs that U.S. antitrust authorities are moving toward practices that are standard in the E.U. He points to the Federal Trade Commission's decision in October to give a detailed explanation of why it cleared two proposed mergers in the cruise industry, a friendly one between Royal Caribbean Cruises and P&O Princess Cruises, and a competing hostile offer by Carnival for Princess. Such explanations are the norm in Europe, but unusual in the U.S. "We are converging with the U.S. and that's good for business," Lowe says. Still on his plate is the question of how the competition directorate will be able to handle all the proposed reforms. Only a dozen new staff have been budgeted on top of the 110 who currently handle antitrust matters.

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