Europe Braces For The Mini-Marios
By Janet Guyon

(FORTUNE Magazine) – On May 1, Europe becomes a much bigger place when ten countries join the European Union. With the addition of Slovakia, the Czech Republic, the Baltic states, Cyprus, Malta, Hungary, Poland, and Slovenia, the EU will encompass a single market of 455 million people, 55% larger than the U.S. Selling, shipping, and manufacturing in Europe will become a lot less complicated.

What won't be simpler is avoiding EU trustbusters. In figuring out what it needed to do to accommodate ten new members with different languages, the EU decided to abandon a system of centralized antitrust enforcement in Brussels, which dates back to 1962. Come May 1, the EU will allow everything but mergers to be enforced by regulators in each country. EU competition chief Mario Monti won't be the only bane of Microsoft; the software giant now will have 25 mini-Marios to tangle with.

To put it mildly, things are bound to get messy. "The consistency of application is going to be a critical issue," says John Grayston, head of regulatory practice at law firm Eversheds in Brussels. "We hope we don't get a nationalistic approach." The French, for example, could interpret EU antitrust law differently from the Slovenes to protect their national interests. The Poles already have launched a price-fixing investigation into the activities of Johnson & Johnson, Grayston says, that may, or may not, be taken up by other EU members.

Alec Burnside, the head of law firm Link-laters's antitrust practice in Brussels, says one client has opted to abandon a strategic alliance with another company for fear of running afoul of the mini-Marios. Instead the companies plan to merge, because mergers, unlike anticompetitive behavior, will still be regulated by Monti's operation. Most lawyers believe the change will lead to many more antitrust cases in Europe. That may be good for consumers and antitrust lawyers, but it will make life tough for companies doing business in the EU.

--Janet Guyon