International Antitrust Policy and Procedures
As a result of the increasing global ization of the world economy in recent years, it is increasingly common for business conduct in one country to have anticompetitive consequences in other countries. This trend has given rise to new challenges for the Antitrust Division. The most immediate challenge is to ensure continued, effective enforcement of the antitrust laws against unlawful conduct, wherever it occurs, that causes injury in the United States. As noted previously, the Division has actively pursued criminal enforcement against international cartels. The Division now has more than 30 ongoing grand jurieswell over one-third of its criminal investigationslooking into international cartel activity.
The Division has also sought to encourage developments in competition law throughout the world that will both further the enforcement of sound, effective antitrust laws and reduce any costs imposed on United States businesses and consumers by reason of the number of, or possible inconsistencies among, different national competition laws. To those ends, the Division has taken several steps to facilitate its obtaining evidence (both documents and witnesses) located abroad in connection with its cartel enforcement activities. In April 1998, for example, the OECD ministers endorsed a Division-introduced Hard-Core Cartel Recommendation that encourages the 29 OECD member countries to enact and enforce laws prohibiting hard-core cartels as well as to enter into mutual assistance agreements to permit the sharing of evidence with foreign antitrust authorities to the extent permitted by national laws. In April 1999, the United States signed an agreement with Australia, the first under the International Antitrust Enforcement Assistance Act of 1994, that will permit the two antitrust enforcement agencies to share confidential information on both civil and criminal matters. In March 1999, the United States signed an antitrust cooperation agreement with Israel, and similar agreements were signed in October 1999 with Japan and Brazil.
As described in detail above, the Division has been actively engaged in international merger and civil non-merger enforcement. In many cases the business conduct involved is subject to review by two or more countries' antitrust agencies. As a result, the Division has had numerous occasions to work with the Commission of the European Communities on merger matters and has had good experiences with case-specific cooperation. One example is the WorldCom/MCI merger involving two U.S. telecommunications firms, which resulted in the divestiture of MCI's $1.75 billion in internet assetsthe largest divestiture in U.S. merger history. In that case, the parties provided written waivers of confidentiality that permitted the two agencies' staffs to work closely together in making their independent analyses of the transaction. The Division and the European Commission ultimately reached essentially the same conclusions, and before announcing its approval of the transaction in July 1998, the Commission formally requested, pursuant to the 1991 U.S.-EU antitrust cooperation agreement, the Division's cooperation and assistance in evaluating and implementing the divestiture proposal that had been proposed to both the Division and the Commission. A similar procedure was successfully followed by the Division, the European Commission, and the merging parties in the Dresser/Halliburton merger, where the antitrust concerns were resolved by a U.S. consent decree requiring a significant divestiture.
Anticipating that they will be faced with important transnational civil nonmerger matters, the United States and the European Union entered into a new positive comity agreement in June 1998. This agreement builds on the positive comity provisions of the first such agreement, which was adopted in 1991. Under the "positive comity" concept, the antitrust authority of one country preliminarily determines that there are reasonable grounds for an antitrust investigation, typically in a case where a firm based in that country appears to have been denied access to the markets of another country by anticompetitive behavior in the latter. The requesting authority refers the matter, along with its preliminary analysis, to the authority whose home markets are most directly affected by the suspect behavior. After consulting with the foreign antitrust authority and depending on that authority's conclusions and actions, the requesting authority may accept the foreign authority's conclusions or seek different results under its own laws.
While no referrals have yet been made under the 1998 agreement, in 1997 the Division made a formal referral under the 1991 agreement regarding possible anticompetitive conduct by certain European airlines that may be preventing U.S.-based computer reservations systems from competing effectively in certain European countries. In 1999, the European Commission issued a statement of objections, which opens formal proceedings, against one of the airlines pursuant to this referral.
During the past several years, the Division has also worked with other U.S. agencies and in multinational fora to improve the overall environment for competitive markets and sound antitrust enforcement. During this period, for example, the Division has cochaired (with the Department of State) the Structural Issues Working Group of the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy; this group's joint report included commitments by the government of Japan to strengthen its antitrust enforcement program. Similarly, the Division worked with USTR and other domestic agencies on the successful conclusion of the World Trade Organization (WTO) negotiations on basic telecommunications issues, which included agreement on a Reference Paper on interconnection rules and other transitional competition-related safeguards. Although the Reference Paper does not directly affect antitrust enforcement, it does establish a minimum level of effective (non-antitrust) regulation for governments to employ in liberalizing former monopoly telecom markets.
The Division also participates in discussions in the increasing number of international fora, including the OECD, NAFTA, the Asia Pacific Economic Cooperation, and the negotiations for the Free Trade Area of the Americas (FTAA), in which antitrust and competition policy issues are discussed. In addition, the Division has participated (with other U.S. agencies) during the past three years in discussions of the WTO working group on the relationship between trade and competition policy.
In 1997, Attorney General Reno and Assistant Attorney General for Antitrust Klein established an International Competition Policy Advisory Committee (ICPAC) to examine the changing international environment from an outside-the-Division perspective. ICPAC devoted special attention to three key issues: (1) How can we build a consensus among governments for cooperation and effective prosecution of at international cartels? (2) How should we deal with the proliferation of premerger notification requirements and merger laws around the world, so as to achieve sound results for both consumers and merging firms? (3) How should we deal with the complex relationships between trade and competition? ICPAC, which was cochaired by former Assistant Attorney General Jim Rill and former U.S. International Trade Commission Chairwoman Paula Stern, met several times and held hearings in which antitrust officials from around the world as well as a wide range of U.S. witnesses participated. ICPAC's report was issued in February 2000.
(Description of photograph: Attorney General Janet Reno is sitting at a table in a briefing room. Assistant Attorney General Joel Klein is seated at the end of the table, to the left of the Attorney General.)
Updated June 25, 2015