GTE has welcomed the European Commission's conditional approval of the WorldCom/MCI Communications Corp alliance but has promised legal action against possible anti- competitive behaviour by the merged companies in the future.
The commission's approval of the merger is subject to MCI selling its Internet backbone interests but GTE, whose complaint sparked the EU anti-trust investigation, expressed concerns that WorldCom/MCI could soon win back MCI's divested share of the Internet market.
William Barr, a GTE representative, said: ?It is critical that safeguards are in place to prevent a combined WorldCom/MCI from capturing back the Internet customers who currently buy services from MCI. GTE is committed to working with the European Commission and the U.S. Department of Justice to achieve that result.
?Until GTE is satisfied that the necessary safeguards are in place GTE will continue to pursue the Internet claims raised in its pending lawsuit challenging the merger,? he said.
Earlier, at a press conference in Brussels, European competition commissioner Karel Van Miert said the approval of the planned merger is subject to a number of conditions.
Van Miert said one condition of is a 'non-compete' clause, which would prevent the two companies from immediately regaining the market share given up by MCI. However, Van Miert refused to provide any details on the length or exact constraints of the clause.
Speaking later a spokesman for Van Miert said the decision hinged on MCI completely divesting its Internet activities.
?We have always said that we wanted to eliminate the overlap in top level Internet connectivity because that was where there was a threat to competition. If the overlap is removed, the concerns that prompted the investigation are also removed,? he said.
Responding to a question on why it is MCI, and not the market leader WorldCom, that is selling its Internet business, the representative said: ?It was always left to them to decide who would sell what; that is a commercial decision for the two companies to decide. In many ways they have chosen the more complicated sale,? he said.
On the contentious subject of WorldCom/MCI's potential share of the Internet backbone, which the commission estimated to be 50 per cent, the spokesman said the commission had cooperated with the U.S. Department of Justice to find a formula for measuring market share.
?We have worked very closely with the DoJ on this because this is the first time anybody has had to really look at this very new and fluid market. Our figure was a weighted average of three criteria: traffic flow, turnover and potential capacity,? he said.
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