Euro Union Chief: WorldCom-MCI In Jeopardy

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June 05, 1998 (12:00 AM EDT)

By Darryl K. Taft,

WASHINGTON, D.C. -- If the European Union has its way, the proposed merger between MCI and WorldCom will not be approved in Europe unless MCI comes up with another solution for divesting its Internet backbone.

At a news conference here in Washington, D.C., Karel Van Miert, the European Union's competition commissioner, said of the proposed merger: "In the European Union, time is running out. I'm not sure what has been offered [by MCI] will be good enough. I have my doubts."

Van Miert said MCI's plan to sell off its Internet backbone to Cable & Wireless of London for $625 million may not be sufficient to meet the union's antitrust standards.

"What has been offered needs to be tested in the market," Van Miert said. "We have to check with the other companies, the other operators in the market" to determine whether competition will not be impaired if the merge should go forward, he said.

Van Miert also said the union notified MCI and WorldCom of its concerns. "They have been informed and have the opportunity to come up with additional suggestions," he said. "We still have some questions about whether what has been offered is meeting our requirements."

Van Miert was here in Washington, D.C., Thursday to sign an agreement known as the 1998 "positive comity" agreement, which says, "When a party is adversely affected by anticompetitive behavior occurring in the territory of the other party, then it may request the other party to take action."

Van Miert joined U.S. Attorney General Janet Reno and Federal Trade Commissioner Robert Pitofsky in signing the agreement earlier Thursday.