EU: Coke Isn't It

European Union investigators have raided the offices of Coca-Cola Co. in four European nations on suspicion of antitrust practices. Authorities say the company abused its position as the world's leading soft-drinks maker by offering retailers unfair incentives to shut out competitors.

EU Competition Commissioner Karel Van Miert said Thursday he had ordered raids on Coke offices in Britain, Germany, Austria and Denmark over the past two days to seize documents.

Â"A dominant company on any market cannot indirectly bully competitors by pushing its customers to buy less of the competitors' products,Â" he said.

The raids were a fresh blow to Coca-Cola in Europe as the company recovers from a health scare last month that led to its drinks being removed from stores in several nations. The recall began after Belgian schoolchildren complained they fell sick from drinking Coke.

Addressing the latest suspicions, the chief director of Nordic Coca-Cola beverages, Svend Ivan Petersen, said the company did nothing wrong and does not understand the charges.

Â"We were naturally very surprised by the raid,Â" Petersen said. Â"But we opened up our files and the materials the commission wanted to see and tried to cooperate.Â"

A statement from Coke's London office said the cola giant was Â"very much in compliance with the spirit and letter of all competition laws.Â"

Under EU rules, companies found guilty of infringing regulations governing fair business competition can face fines of up to 10 percent of their revenues, although in practice fines have been much smaller.

Based on any information they find in the raids, European regulators could decide to launch a full-scale investigation into Coke.

Investigators were apparently looking for evidence Coke offered retailers incentives to increase sales and stop selling competing drinks. It was unclear if the Commission acted on complaints from one of Coke's competitors or from disgruntled retailers.

The European Commission, the executive branch of the EU, released a statement saying Coca-Cola was Â"suspected of practices which would not be in line with European Community law.Â"

Â"It was primarily a question concerning bonuses which are granted by the Coca-Cola company to a number of customers,Â" the EC said, adding that the British division of Coca-Cola promised to halt such payments.

The Commission last week fined British Airways $7 million for offering similar incentives to travel agents. It also raided Belgium's Interbrew, the world's fourth largest brewer, last week to find out if it is using its dominance of the Belgian market to muscle out competitors.

Coke's position as the world's biggest soft drinks supplier has already brought it into conflict with European regulators.

The company scaled down plans to acquire operations from Britain's Cadbury Schweppes PLC after complaints from the EU. Fench authorities have blocked Coke's attempts to purchase the Orangina soda brand from Pernod Ricard SA.

Regulation of business competition is one of the few fields where national governments in the 15 EU nations have handed over authority to the EU.

Van Miert has raised the profile of his antitrust regulators in a series of headline cases in recent years, imposing conditions on Boeing's $15 billion takeover of McDonnell Douglas in 1997 and handing down a record $106 million fine on Volkswagen last year for restrictive sales practices.