Playing monopoly

This month the business headlines appear to be focused on political investigations into various allegations of attempted monopolies or lack of transparency in financial acquisitions.

Most prominent is the news that global software giant Microsoft has been stung for a record US$1.4bn by the European Commission. The massive fine is the latest development in the ongoing spat between the two over what the Commission has described as the company's ‘uncompetitive behaviour' going back to the original 2004 ruling.

Nor have the bureaucrats in Brussels given up the chase; two more anti-competition investigations were launched at the end of January. Expect more to come as the group continues to look at takeover options for internet giant Yahoo.

With this in mind it is interesting to look back and see how the region's economies have managed to find themselves in the fortuitous position of having been able to avoid similar outcomes. As the GCC continues to march toward the ever closer-knit ties of a common market and, looking ahead, a joint currency, local businesses are able to more or less freely interact on a level playing field.

The accessibility to financing, fuelled by the high liquidity in the Gulf, for projects and business plans has meant that every month new companies can be launched.

Further, the involvement of family groups in manufacturing, finance, retail and real estate firms throughout the region has resulted in a much greater degree of cooperation and interaction than in many other parts of the world. Decades of constant loggerhead competition in these markets have resulted in virtual standoffs, stifling growth and leaving companies constantly open to allegations of attempting monopolies.

Interesting then to note that the sometimes criticised speed of growth in regional businesses has, in fact, rather had the effect of encouraging expansion.

Meanwhile, following on from last month's developments: My sources tell me that the trader responsible for Société Générale's multi-billion dollar losses, Jerome Kerviel, has now been hailed as something of a hero by the French public.

Not only has President Sarkozy launched a scathing attack on the bank's Chairman for failing to assume responsibility, but the streets of the capital have been enlivened by Parisians wearing t-shirts backing Kerviel, who they see as something of a Robin Hood figure in the face of big corporations. You couldn't make it up.

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