The Antitrust Division’s international program continues to focus on case cooperation and competition policy development among enforcers from different jurisdictions.
Leading on International Enforcement Cooperation
International enforcement cooperation on cartel investigations remains a top priority for the Division. The Division worked closely with several foreign jurisdictions throughout 2015 in connection with its ongoing investigation into unlawful bid-rigging and price-fixing conspiracies in the ocean shipping industry. To date, investigation has resulted in U.S. charges against seven individuals and three companies and $136 million in criminal fines.
The Division also worked closely with the United Kingdom’s Competition and Markets Authority (CMA) and other UK law enforcement agencies to conduct searches in the Division’s wall décor criminal investigation. Ultimately, the Division charged Daniel William Aston and his UK company, Trod Ltd. ( d/b/a Buy 4 Less, Buy For Less, and Buy-For-Less-Online). According to the indictment, Aston, a director and part owner of Trod, and his co-conspirators used complex algorithms to fix the price of certain posters sold online through Amazon Marketplace from as early as September 2013 to about January 2014.
In addition, the Division has worked with enforcers in more than ten jurisdictions, including Australia, Brazil, Switzerland, and the UK, in connection with the Department of Justice’s ongoing investigation into unlawful collusive activity aimed at manipulating the foreign currency exchange (FX) spot market. To date, four of the largest financial institutions in the world—Citicorp, JPMorgan Chase & Co., Barclays PLC, and Royal Bank of Scotland plc—have agreed to parent-level guilty pleas to felony price-fixing charges. The fines paid by these institutions total approximately $2.5 billion and include the three highest fines ever obtained for a criminal violation of the Sherman Act. The international cooperation in this investigation has included information sharing and coordinating the timing and format of critical investigative steps across jurisdictions, thereby allowing each jurisdiction to more effectively execute its own investigation.
On the civil side, the Division has worked closely with fellow enforcers on 14 different merger investigations—often pursuant to waivers from parties and third parties.
More than half of these merger investigations involved cooperation with multiple jurisdictions. For example, in the proposed Applied Materials/Tokyo Electron merger, the Division worked with its counterparts in Korea, China, Germany, and four other jurisdictions. The deal would have combined the two largest competitors with the necessary knowledge, resources, and ability to develop and supply high-volume nonlithography semiconductor manufacturing equipment, a vital aspect of the American economy. The Division’s cooperation with competition enforcers in other jurisdictions enabled our staffs to work closely together, talking in detail about highly technical aspects of the products at issue, leading to a more comprehensive assessment of the remedy proposals. The parties ultimately abandoned their proposed merger after the Division informed them that their remedy proposal failed to resolve the Division’s competitive concerns.
During the Division’s investigation of General Electric’s proposed acquisition of Alstom Energy, the Division worked closely with the Directorate General of Competition of the European Commission (EC) to ensure a coordinated review of the deal. As originally proposed, the $13.8 billion acquisition would have eliminated General Electric’s primary competitor in the market for aftermarket parts and services for GE gas turbines in the U.S. Although the EC’s competition concerns differed due to variances in the parties’ business operations in the U.S. and the EU, the Division was able to work closely with the EC—during both the investigation and the assessment of proposed divestitures—to ensure that the final remedy fully addressed the transaction’s potential competitive harm in the U.S. The cooperation ensured that the agencies required overlapping, nonconflicting divestiture packages and allowed both agencies to assess and approve Ansaldo as the buyer of the divested assets.
Building Bilateral and Multilateral Relationships
As noted, the Division maintains close bilateral relationships with many fellow competition enforcers and has worked to deepen these ties over the past year.
In September 2015, the Department of Justice and the Federal Trade Commission (FTC) signed a Memorandum of Understanding with the Korean antitrust agency, the Korea Fair Trade Commission (KFTC). The agreement will promote cooperation among the agencies and a deeper understanding of the agencies’ respective missions.
L-R: FTC Chairwoman Edith Ramirez, KFTC Chairman Jeong Jae-Chan, Assistant Attorney General Bill Baer
The agreement was signed at a formal bilateral meeting between the U.S. agencies and the KFTC in Washington, D.C. on September 9, 2015.
The Division continued to strengthen its close relationship with the Canadian Competition Bureau (CCB) and the Mexican Federal Competition Commission (COFECE) by, among other things, participating in a trilateral meeting in May 2015 in Mexico City, Mexico. The Division also participated in a variety of meetings and visits with the CCB over the course of the year, including both cartel and civil bilateral meetings in Washington D.C.
In May 2015, the Division and FTC hosted a delegation led by Director General Shang Ming of the Chinese Ministry of Commerce, one of the three Chinese antimonopoly agencies, to discuss recent antitrust developments in China and the U.S.
The Division also worked with its Chinese counterparts as a part of a broader U.S. Government participation in the U.S.-China Strategic and Economic Dialogue in June 2015, and in the U.S.-China Joint Commission on Commerce and Trade in November 2015. These meetings helped to promote steps toward convergence on principles of fair treatment, due process, and regulatory transparency. These meetings also helped to clarify the relationship between the use of intellectual property (IP) and competition concerns. Moreover, the Division’s Chinese counterparts provided important clarity to the public by specifying which courts are responsible for handling appeals of antimonopoly law decisions, including those involving IP.
The Division remains an active leader in the competition work of the Organisation for Economic Co-operation and Development, the International Competition Network, and other multilateral organizations. The Division’s involvement in these organizations fosters relationships with a broader group of international antitrust agencies and promotes sound antitrust policy.
Engagement with the OECD’s Competition Committee remains a top priority for the Division, as demonstrated by Assistant Attorney General Baer’s role as Chair of Working Party No. 3 on Cooperation and Enforcement. In 2015, Working Party No. 3 conducted roundtables on competitive neutrality in competition enforcement and cartels involving intermediate goods. Working with our colleagues at the FTC and other U.S. Government agencies, the Division wrote and presented nine papers to the Competition Committee, which can be found on our website.
The Competition Committee also sponsored a number of training programs where Division employees were asked to present at OECD training centers in Hungary and South Korea over the course of the year, covering topics such as telecommunication and electronic communication markets and remedies.
As a founding member of the ICN, the Division serves on the Steering Group that guides the direction of the ICN’s work; it currently co-chairs the ICN’s Unilateral Conduct Working Group. In 2015, the ICN approved a Practical Guide to International Enforcement Cooperation in Mergers, as well as Guidance on Investigative Process. Over the course of the last year, Division Cartel officials participated in the ICN Cartel Workshop in Cartagena, Colombia, which included meetings on topics such as innovation in cartel detection and optimal sanctions for international cartels. Division officials also participated in the ICN Merger Workshop in Brussels, where international enforcers met to discuss remedies in merger cases as well as international merger enforcement cooperation. Finally, as co-chair of the ICN Unilateral Conduct Working Group, the Division has initiated a two-year project for drafting an Analytic Framework chapter for the Work Group Workbook that explores the basic questions an agency must address when formulating its unilateral conduct enforcement policies. Division officials also developed a hypothetical on refusals to deal that was presented to officials from 34 ICN member agencies in the UCWG workshop in Istanbul, Turkey.