Rail merger veto a victory for EU

The decision to block the Siemens-Alstom rail merger is another feather in the cap of Margrethe Vestager, the EU competition commissioner — and of EU antitrust policy more broadly. While Eurosceptics claim the EU does little for ordinary people, antitrust is one area where Europe-wide enforcement adds real value. Under the bold. but methodical Vestager, the EU is becoming the global trailblazer in policing competition, and especially in regulating big technology companies.

The proposed merger of French and German train companies to form a rail equivalent of Airbus was one of the most contentious cases of recent years. It raised the issue of whether the EU should loosen its antitrust approach to enable the creation of “European champions” capable of taking on huge, often state-backed, rivals from China and other emerging economies. Vestager was right to shrug off vigorous lobbying from the French and German governments. She heeded instead the complaints of antitrust authorities from five countries that the SiemensAlstom tie-up would reduce competition in EU highspeed rail. The need to safeguard intra-EU competition to prevent damage to consumers and European markets

should not be undermined by an aim to promote firms big enough to conquer global markets.

Robust antitrust policing within the EU is, indeed, all the more important in an era when regulators elsewhere are seen to be falling down on the job. An era of supercharged corporate profits, especially in the US, is strengthening impressions among many citizens that global capitalism has become rigged in favour of powerful owners and investors, fuelling distrust of the system.

As the Financial Times has reported, evidence suggests staffing in the US department of justice’s antitrust division has fallen since Donald Trump took office, despite a boom in large corporate mergers. Fines and investigations of cartels have also declined sharply. /London, February 7.