||DEPARTMENT OF JUSTICE
International Aspects of Antitrust Enforcement:
A U.S. Perspective
Outline of Remarks
Charles S. Stark(1)
U.S. Department of Justice
EUROPEAN & US COMPETITION LAW
February 13-14, 1995
In recent years, U.S. antitrust authorities have paid increased attention
to the international aspects of antitrust enforcement. This emphasis
reflects the pervasive internationalization of the economy: import and
export transactions now account for nearly a quarter of the United States'
gross domestic product.
Recent Antitrust Division actions and activities aimed at making antitrust
more effective in dealing with the global marketplace include --
- The creation of a new senior-level position in the Antitrust Division
with principal responsibility for international matters;
- Revision of the Antitrust Enforcement Guidelines for International
- Confirmation of the Department's intention to challenge anticompetitive
conduct affecting U.S. export as well as import commerce, and the
filing of the first case in several years based principally on export
- Emphasis on cooperation with foreign antitrust authorities, including
||a growing number of cases in which international cooperation
has played a major role, and
||enactment of the International Antitrust Enforcement
Assistance Act of 1994, which enables U.S. and foreign
antitrust authorities to share confidential investigative
information and engage in other types of mutual assistance
that were not possible under prior law.
Antitrust Enforcement Guidelines for International Operations
The U.S. antitrust agencies from time-to-time issue "guidelines." Other
examples include the 1992 Horizontal Merger Guidelines that
were issued jointly by the Justice Department and the Federal Trade
Commission, and the draft Guidelines for the Licensing and Acquisition
of Intellectual Property on which public comments were invited
in August 1994 and in which we are currently considering revisions in
light of the comments received.
Guidelines are statements of enforcement policy. They are issued to
advise the business and legal communities and others of the antitrust
agencies' policies and methods of analysis. Although the agencies naturally
intend these Guidelines to be an accurate reflection of law and policy
at the time they are issued, the Guidelines themselves are not binding
on the courts, private parties, or the agencies themselves.
Justice Department guidelines for international antitrust were previously
published in 1977 and 1988. A draft of revised Antitrust Enforcement
Guidelines for International Operations, which will supersede the
1988 version, was published with an invitation for comments on October
The draft Guidelines include discussion of --
- Relevant provisions of the antitrust laws;
- Provisions in the trade laws of the United States that may bear
on application of the antitrust laws;
- Subject matter jurisdiction;
- The effect of foreign government involvement in conduct that might
be subject to the antitrust laws;
- Antitrust enforcement and international trade regulation;
- Personal jurisdiction; and
- Investigatory practices in instances in which evidence is located
outside the United States.
The draft Guidelines reflect continuity in the Justice Department's
approach to international antitrust issues, but there are notable differences
from earlier guidelines:
- The new draft Guidelines have been issued jointly by the
Department of Justice and the Federal Trade Commission. Earlier versions
were issued solely by the Department of Justice. This change reflects
the importance given by the agencies to speaking with a single voice
in the international antitrust area.
- They retain the basic thrust of the Department's approach to issues
of jurisdiction and comity as it has stood for many years, while bringing
it up to date to reflect changes in the law. They emphasize that the
agencies are prepared to consider enforcement action whenever the
jurisdictional and substantive requirements of the law are met. At
the same time, they stress that considerations of international comity
play an important role in the agencies' decisions, as well as the
priority the agencies give to cooperating where possible with foreign
- The draft Guidelines focus exclusively on matters that
are unique to antitrust's international setting. In this they differ
from the 1988 Guidelines, which were intended as a broad statement
of the Department's then-current substantive antitrust views in areas
such as mergers, joint ventures, intellectual property licensing and
- They retain the approach to anticompetitive restraints on export
trade that was adopted in 1992 and that reinstated the policy that
had been in effect prior to the 1988 revision. The 1988 guidelines
had eschewed the possibility of acting in cases in which there was
no direct impact on U.S. consumers. Prior to 1988 and since 1992,
the Department's stated policy -- reflecting statutory jurisdictional
provisions -- has been to take antitrust enforcement action in appropriate
cases against anticompetitive conduct that adversely affects U.S.
- They include a more extensive discussion than the previous version
of doctrines that affect the way in which the antitrust laws apply
where foreign governments are in some way involved in the conduct
at issue. These include the Foreign Sovereign Immunities Act; the
Act of State doctrine; the Noerr-Pennington doctrine (which
generally immunizes petitioning to secure governmental action that
is anticompetitive); and the foreign sovereign compulsion defense.
In the case of foreign sovereign compulsion, the draft limits the
availability of the defense if the conduct took place in the United
States, or if compulsion is not associated with significant penalties
The Justice Department and Federal Trade Commission received a number
of comments from both private parties and from some governments, including
the British government. These comments are currently under review.
Recent Enforcement Activities
At the most general level, the Department's antitrust enforcement activities
are, as they traditionally have been, divided principally among three
- Cartel enforcement. Cartel cases, usually involving price
fixing, bid rigging or market allocation among competitors, ordinarily
are investigated and prosecuted as violations of criminal law, subject
to fines and imprisonment.
- Mergers and acquisitions. These usually, but do not necessarily,
involve transactions that are subject to premerger notification requirements.
- Civil enforcement involving arrangements other than mergers
and acquisitions. These are predominantly transactions subject
to analysis under "the rule of reason." Examples include joint ventures,
licensing arrangements and distribution restraints.
Enforcement in all three areas is active, but the greatest relative
growth has been in the area of non-merger civil enforcement. To put
this more concretely, in the 1994 fiscal year the Division brought 57
criminal cases, challenged or announced its intention to challenge 22
mergers, and brought 10 non-merger civil cases.
Examples of recent cases of particular interest in the international
context include --
- U.S. v. Pilkington plc, No. Civ 94-345 TUC (WDB) (D. Ariz.,
filed May 26, 1994). The case is significant not only as the first
recent Justice Department case attacking anticompetitive restraints
on U.S. export commerce, but because of its focus on innovation-retarding
restraints in technology markets.
Pilkington was a civil case that was brought and simultaneously
settled with a consent decree. Pilkington is a major manufacturer
of flat glass, used for windows in buildings and automobiles. The
complaint charged Pilkington with using anticompetitive licensing
practices to close off foreign markets to U.S. companies by strictly
limiting their use of float glass technology, some of which had
been developed and patented by Pilkington some three decades earlier.
According to the complaint, even though Pilkington's patents expired
long ago and its technology is now largely in the public domain,
the company used its licensing arrangements to prevent U.S. firms
from competing in the design, construction or operation of float
glass plants in other countries.
The consent decree entered in the case enjoins Pilkington from
asserting claims of proprietary technology against U.S. licensees
to prevent their use of float glass technology. The decree does
not prevent Pilkington from asserting rights under (a) still-valid
or future patents, or (b) specific and specifically-identified technology
that qualifies as a trade secret under applicable law.
- U.S. v. Microsoft Corporation, Civ. Action No. 94-1564
(SS) (D. DC, filed May 15, 1994). Microsoft, apart from its
significance for the computer and software industry, is significant
as an instance of pathbreaking cooperation between the U.S. and EC
During 1993, both the Department of Justice and the European Commission
had pending investigations of possible violations of their respective
antitrust laws by Microsoft Corporation. There was extensive overlap
in the practices under investigation in the two jurisdictions. However,
neither the Department nor the Commission could share with the other
information or documents it had obtained from Microsoft because
of confidentiality provisions in U.S. and EC law. To overcome this
inability to cooperate in their respective investigations, the U.S.
and EC agencies asked Microsoft to agree to permit them to share
information, and Microsoft agreed. Ultimately, Microsoft and the
two antitrust agencies entered into joint settlement negotiations.
These negotiations led to Microsoft's giving binding undertakings
to the Commission, and entering into a proposed consent decree with
the Department of Justice, containing substantially identical terms.
Benefits of these information sharing and joint settlement arrangements
to the agencies and to Microsoft included prompter resolution of
the matter and the assurance of consistent American and European
- United States v. MCI Communications Corp. and BT Forty-Eight
Co., Civ. Action No. 94-1317 (TFH) (D. DC, filed June 15,
1994). In this case, the Department of Justice considered issues of
international comity in shaping relief to avoid conflict with British
The transaction was a joint venture and partial acquisition involving
British Telecom and MCI Communications Corp., a U.S. based firm.
One concern to the Department of Justice was to assure that MCI's
relationship with British Telecom did not lead to discrimination
against other U.S. carriers offering competing multinational communications
services for which access to British Telecom's network was required.
The case was settled by a consent decree which permitted the basic
deal to go forward while putting in place measures to assure against
such discrimination. The Department noted in its Competitive Impact
Statement that it might have been necessary to seek more extensive
remedial provisions if the policies of the British government and
its telecommunications regulatory authority OFTEL had not been consistent
with, and reinforced, this non-discrimination objective.
International Antitrust Enforcement Cooperation
The U.S. antitrust agencies' emphasis on international cooperation
with foreign counterparts arises from several considerations:
- The internationalization of business means that a growing number
of antitrust matters will be of interest to antitrust authorities
in more than one country.
- The information needed to determine whether an antitrust violation
has occurred, and to establish the violation before a court or administrative
body, is located abroad increasingly often.
- There has been an enormous increase in the number of countries
that have adopted or improved their antitrust laws and enforcement
mechanisms, as well as growing convergence on basic substantive antitrust
- There has been a significant lessening of jurisdictional conflict
as most countries have come to accept that antitrust enforcement cannot
be effective if it is confined to conduct or transactions that are
limited within a single nation's borders.
In addition to Microsoft, a number of Department of Justice
antitrust matters in the past year have involved extensive international
cooperation. Among them --
- A joint U.S.-Canadian investigation into price fixing in the thermal
fax paper industry that affected the markets in both countries resulted
last July in criminal convictions under both Canadian and U.S. antitrust
- A U.S. prosecution and conviction last June of firms in the disposable
plastic dinnerware industry was facilitated by evidence obtained in
coordinated searches in the U.S. by the Federal Bureau of Investigation
and in Canada by the Royal Canadian Mounted Police.
- Cooperation between the Department of Justice and Germany's Bundeskartellamt
in connection with last year's proposed acquisition by the German
firm ZF of General Motors' Allison Transmission Division facilitated
an outcome in which the parties abandoned the transaction in the face
of challenges by both agencies.
The two Canadian matters were made possible a treaty between the U.S.
and Canada for mutual legal assistance in criminal matters (these agreements
are commonly referred to as "MLATs"), which applies to antitrust as
well as other offenses. The German matter did not involve the exchange
of confidential information obtained from the parties, which would not
have been permissible under existing law, but did involve discussion
of the timing and nature of our respective proceedings.
Existing antitrust-specific agreements between the U.S. and Australia,
Canada, Germany and the EC(2) have been
valuable but have important limitations. In particular, none of them
permits the sharing of confidential information obtained in investigations,
or calls for either party to use its powers to obtain evidence on the
other's behalf. By contrast, securities and tax law authorities in the
United States and elsewhere have for many years had legislative authority
and a network of agreements to permit cooperation of this nature. In
addition, experience under the Canadian MLAT has proven the value of
such assistance in antitrust matters.
In July 1994, at the urging of the Department of Justice, legislation
was introduced that would expand the ability of the U.S. antitrust agencies
to cooperate in these ways with foreign antitrust authorities. The International
Antitrust Enforcement Assistance Act of 1994 passed both houses
of Congress with bipartisan support and was signed into law by the President
on November 2, 1994.
Specific provisions in the IAEAA will:
On a reciprocal basis, permit the Justice Department and the FTC to
exchange otherwise confidential investigative information with foreign
On a reciprocal basis, permit the Justice Department and the FTC to
obtain information from firms or individuals in the U.S. on behalf of
foreign antitrust authorities, either by using their respective civil
investigative powers or, in the case of the Justice Department, by going
to court and seeking an order compelling the production of evidence.
- Assure that the foreign antitrust agency will provide assistance that
is comparable in scope to that provided by the U.S. agencies.
- Protect confidential business for information from improper disclosure
or misuse by:
| -- ||requiring that assistance be pursuant to a publicly disclosed antitrust
mutual assistance agreement;|
| -- ||assuring that the foreign antitrust authority can and will meet
stringent confidentiality requirements for any information provided
by the U.S. antitrust agencies; |
| -- ||restricting the use of any information provided to antitrust enforcement
purposes, subject to a limited exception for other essential law enforcement
purposes; and |
| -- ||requiring termination of the antitrust mutual assistance agreement
if there is a breach of confidentiality, unless adequate steps are taken
to minimize the harm and assure that it will not recur. |
- Exclude premerger information received by the U.S. agencies under
§7A of the Clayton Act (Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976), as well as classified national security information,
from disclosure under the IAEAA.
- Require that before providing any assistance under the Act, the Attorney
General or the Federal Trade Commission, as the case may be, conclude
that doing so is consistent with the public interest of the United States.
1. Chief of the Foreign Commerce Section,
Antitrust Division, U.S. Department of Justice. Views expressed in these
remarks are not necessarily those of the Department of Justice.
2. In August 1994 the European Court
of Justice held that the U.S.-EC agreement was invalid as a matter of
EU law because it had not been approved by the Council of Ministers.
The Commission has said that it intends in the near future to seek Council