AAG Calls for Greater Convergence and More Attention to Remedies
Since Christine Varney took office last year as Assistant Attorney General (AAG), the Antitrust Division has intensified its efforts with respect to both the international dimensions of antitrust enforcement policy and the day-to-day consideration of international issues in the context of the Division’s investigations and enforcement actions. Embracing that effort, the Division’s staff has worked tirelessly to implement the goals that AAG Varney has frequently discussed: bringing greater cooperation and convergence to international antitrust enforcement; facilitating international dialogue; building bilateral and multilateral relationships; and learning how best to coordinate investigations and remedies in a globalized age. Among these goals, the Division has placed special emphasis on creating a dialogue on institutional design issues such as procedural fairness and transparency, as Deputy Assistant Attorney General Phillip Weiser noted in a speech in Brussels last month. The Division has also taken the innovative step of hiring Rachel Brandenburger—an accomplished antitrust lawyer in Europe and internationally—to serve as a special advisor to AAG Varney on international affairs. The result of these actions has been more frequent and active engagement with the Division’s counterparts around the world in the effort to protect competition and consumers.
A major point of focus for the Division over the past year has been the effort to bring greater convergence to the substantive standards that agencies around the world use in judging anticompetitive conduct. Citing successes on the cartel and merger fronts, AAG Varney has called for further dialogue on single-firm conduct, an important area in which members of the antitrust and business communities face uncertainty in evaluating the circumstances—and jurisdictions—in which their conduct will be deemed unlawful. AAG Varney has also spoken in both the United States and Europe about the importance of bringing greater convergence to the choice of antitrust remedies, urging other jurisdictions to join the Division in an effort to be more “mindful” of the extraterritorial effects of their remedial choices and the decisions other agencies have already made or the actions they may yet want to take in particular cases. The Division’s recent statement on closing the Cisco/Tandberg investigation is a landmark in this respect. In deciding to close its own investigation, the Division took into account the commitments that the parties had made to the European Commission (EC) regarding interoperability and thus concluded that the proposed deal was not likely to be anticompetitive.
Another important focus for the Division has been the effort to improve transparency and procedural fairness both at home and abroad. AAG Varney has called for a global dialogue on procedural fairness issues, including transparency, and has noted that, in this effort, the Division has both a lot of positive experience to share and also a lot to learn from the experiences of other agencies around the world. With regard to transparency, for example, the Division engages frequently with the parties, at both the staff and senior leadership levels, and is quite open about both its substantive theories of harm and the procedural and timing issues in the investigation. The Division has also learned from the best practices followed in other jurisdictions, especially the practice of issuing closing statements in matters it decides not to pursue. Such statements can be important not only to make the Division’s decisions transparent to the consumers whom it serves, but also to make those decisions accessible to other agencies facing similar situations, as well as to the antitrust community at large.
In international antitrust policy and enforcement discussions at International Competition Network (ICN), Organisation for Economic Co-Operation and Development (OECD), and Asia-Pacific Economic Cooperation (APEC), including those regarding procedural fairness, the Division has stressed that we are eager to learn from the experiences of others. As Rachel Brandenburger explained when she spoke in Brussels last month about the state of transatlantic cooperation, “no entity...has a monopoly on truth or good ideas.”
A little over a dozen years since Assistant Attorney General Joel Klein launched the U.S. International Competition Policy Advisory Committee (ICPAC) with the prescient statement that “no aspect of antitrust enforcement and antitrust policy is more important than its international dimension,” multilateral organizations have become an ever more essential part of the Antitrust Division’s efforts. The ICN (an informal network of competition authorities that grew out of the ICPAC report) and the OECD (a more formal organization of 31 developed nations whose work includes both competition and other matters) continue to play an important role in increasing understanding and achieving consensus on important competition policy and enforcement issues like those discussed above.
The Division is closely involved with all aspects of the OECD’s competition work. Last fall, AAG Varney was elected Chair of the OECD Competition Committee’s working party on enforcement and cooperation, which has since focused on issues of procedural fairness. In February, this working party held an interesting and thoughtful discussion of transparency, with members agreeing on the importance of transparency and describing in detail the various ways in which their systems provide for it. More discussions on procedural fairness issues are planned for June, with a focus on confidentiality issues and agency decision-making. More generally, the OECD’s Competition Committee has addressed a wide range of interesting issues over the past year, including two-sided markets, patents and innovation, the standard for merger review, competition in accounting services, the failing firm defense, margin squeeze, and smart grids. The Division either filed papers or commented actively in each of these discussions.
The Division has also been very active in the work of ICN, which will hold its annual meeting in Istanbul in late April. The Division co-chairs the ICN’s Merger Working Group with the Irish Competition Authority. Most recently, the Working Group has been focused on facilitating greater substantive convergence in merger analysis through the development of additional best practices. Last June, ICN adopted new recommended practices on competitive effects analysis at its annual meeting in Zurich, and the upcoming annual meeting will include a discussion of two additional sets of recommended practices on market definition and the failing firm defense. The meeting will also include a focus on practical guidance on how to conduct market studies, a comparative report on refusals to deal, updated work on digital evidence gathering for cartels, and ideas on how agencies can plan their work more effectively. Representatives from the Division will participate actively in these and other discussions.
Bilateral Cooperation and Technical Assistance
The Division has been working actively with its many counterparts around the world in its efforts to bring greater cooperation and convergence to the international aspects of antitrust, including Canada, China, the European Commission, India, Japan, and Mexico. For example, over the past year, the Division has had exchanges with Chinese agencies on their proposed regulations and guidelines, arranged a training program for 80 Chinese judges, and participated as instructors in workshops on merger enforcement, cartels, and other topics.
Assistant Attorney General Christine Varney meets with Chinese officials.
In October 2009 the Division and the Federal Trade Commission issued a joint report on technical cooperation and assistance. This report developed out of a public workshop in 2008 that was attended by more than 100 competition officials, academics, and private practitioners. Importantly, the report noted that, among other things, engagement with emerging antitrust authorities is not merely an effort to help the host country. The term “technical cooperation” underscores that the interaction in technical assistance is a two-way street. Effective technical assistance efforts enable the providers of support to learn about the relevant local conditions and allow the recipients of support to benefit from the expertise of the more established jurisdiction, with the aim of creating trusted and long-term, mutually beneficial working relationships.
As part of this initiative, in November 2009 the Division and the Federal Trade Commission entered into a groundbreaking Memorandum of Understanding with the Russian Federal Anti-Monopoly Service. The Division hopes to create similar understandings with other jurisdictions to help frame cooperation with agencies around the world.
The Division looks forward to advancing its vision for international cooperation and convergence in the coming year, at the ICN annual meeting in Istanbul, at OECD in June, and in the countless, everyday efforts of its staff to make internationally mindful and cooperative antitrust a vibrant reality. The hope remains that each year will feature greater and more substantive international dialogue than the last. To that end, the Division anticipates a year of fruitful multilateral discussions on competition issues, of significant opportunities for bilateral cooperation, and of frequent instances of successful coordination with our counterparts around the world.