EU's Almunia says antitrust rules important in crisis

BRUSSELS (Reuters) - Joaquin Almunia, the EU's newly-appointed competition chief, said on Monday the economic crisis was no excuse for loosening strict antitrust rules and reducing fines for violations that critics say are too high.

Almunia, the former monetary affairs commissioner who took over the competition portfolio from Neelie Kroes last week, outlined his priorities at an industry event in Paris.

He said the European Commission would have to remain "vigilant" and pursue competition infringements with fines that were sufficient to deter anti-competitive behavior.

A "reasoned and effective" application of competition rules was the best possible encouragement for companies to abide by them, he said.

"And this application is no less important in periods of economic crisis such as that which we are experiencing today," Almunia said, according to a text of his speech, adding that the harm caused by violations at such times was even more significant.

Antitrust experts said Almunia seemed determined to follow Kroes's tough line.

"Almunia is signaling that there are no radical changes in policy. In a sense that is good. Reliability and predictability are important for businesses, to know what to expect," said Martin Bechtold, a partner at Allen & Overy.

"The interesting thing will be in the details."

The appointment of Almunia, one of European Commission President Jose Manuel Barroso's most trusted allies, underlines the importance Barroso attaches to cracking down on any signs of protectionism or flouting of EU competition rules.

It followed criticism that the EU has not upheld its own strict rules for the single market since approving a series of national rescue schemes for banks, carmakers and companies hurt by the credit crisis.

Almunia said there were no plans to change the Commission's policy on fines, which has seen companies such as Intel and Microsoft slapped with penalties of hundreds of millions of euros.

"The economic crisis does not justify a revision of the criteria established four years ago regarding fines," he said.

"The rule of a maximum of 10 percent of a company's turnover already acted as an 'automatic stabilizer', which ensures that fines are not excessive," Almunia said.

Companies can appeal to the Luxembourg-based General Court to reduce their fines.

"Ultimately it will be the Court to decide on the appropriate level of fines," said antitrust lawyer Thomas Jestaedt at Jones Day.

(Additional reporting by Phil Blenkinsop; editing by Hans Peters and Rupert Winchester)

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