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Posted: 9/11/2004 9:58:14 AM EDT
If the court backs MCI it could open the door to a second attempt at taking over Sprint

By Simon Taylor, IDG News Service
September 09, 2004

BRUSSELS -- The European Union's (E.U.'s) Court of First Instance will rule on Sept. 28 whether the European Commission had the right to block the aborted merger between U.S. telecommunications giant MCI Inc. (formerly WorldCom Inc.) and Sprint Corp.

If the court backs MCI, it could open the door to the Ashburn, Virginia-based company suing the Commission for damages and making new acquisitions, including a possible second attempt at taking over Overland Park, Kansas-based Sprint. The Commission is the 25-nation E.U.'s executive body.

MCI launched a legal challenge in 2000 to the Commission's decision that June to block the planned merger, even though the two companies decided to drop the tie-up after Competition Commissioner Mario Monti said that the deal could not go ahead.

The Commission opposed the merger on the grounds that it would have reduced competition for Internet backbone and global telecom services.

MCI argues that unless the Commission's verdict on the tie-up is overturned it restricts the "number and size of transactions it can pursue" including a deal similar to the planned merger.

The court's judgment will focus on whether MCI has the right to challenge the Commission's decision. The Commission argues that the firm has no legal basis for contesting its verdict on the merger because it was called off and the companies involved suffered no material damage as a result.



Excuse me, but what the hell does the EU have to do with one American company attempting to purchase another American company?
Link Posted: 9/11/2004 11:06:46 AM EDT
And why, might I ask does the EU have any control over what two US companies do???
Link Posted: 9/11/2004 11:18:46 AM EDT
[Last Edit: 9/11/2004 11:19:12 AM EDT by Airwolf]
If they have offices there and those divisions are incorporated under EU law then they have to play by their rules.

It's the same thing that happened with the Micro$oft case. You play on their turf with their citizens and you have to abide by their rules.

Welcome to the world of "Global Business"
Link Posted: 9/11/2004 11:47:27 AM EDT
I don't recall hearing of nearly as many cases of the US trying to limit European businesses in this same fashion.
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