Over the past year, the Antitrust Division has engaged in international work of broad and varied dimensions. Two of the Division’s chief priorities in the international arena have been the intensification of cooperation with its international counterparts, and enhancing transparency and procedural fairness in antitrust enforcement around the world.
Intensification of International Cooperation
Throughout 2011, the Division intensified its efforts to foster and strengthen cooperation with its international counterparts, ranging from the enhancement of close working relationships among enforcement agencies in analyzing particular antitrust enforcement cases to capacity-building in the form of seminars and international visits. The emphasis on cooperative relationships, and on being mindful of the international implications of the Division’s enforcement actions, from the very start of an investigation through to the remedial phase, is something that Acting Assistant Attorney General Sharis A. Pozen and Special Advisor, International Rachel Brandenburger have continued to make a top priority over the past year.
During 2011, the Division pursued many significant civil and criminal investigations with international dimensions, most of which involved cooperation with antitrust agencies in other jurisdictions. For example, the Division cooperated on merger reviews—often pursuant to waivers from parties and third parties—with many non-U.S. antitrust agencies, including those in Argentina, Brazil, Canada, Colombia, the European Union, Germany, Japan, Mexico, South Africa, and the United Kingdom. As Acting Assistant Attorney General Pozen has noted in her address at the November 2011 Antitrust Fall Forum, “[i]n our experience, agency cooperation in matters being investigated by more than one jurisdiction produces the benefits of shared learning and expertise, and the parties gain from a more efficient review.”
The Division cooperated closely with its international counterparts in its investigations into Google Inc.’s acquisition of Motorola Mobility Holdings Inc., the acquisitions by Apple Inc., Microsoft Corp., and Research in Motion Ltd. (RIM) of certain Nortel Networks Corporation patents, and the acquisition by Apple of certain Novell Inc. patents. During the course of its investigation of the Google/Motorola Mobility transaction, the Division cooperated closely with the European Commission (EC), and had discussions with the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the Israeli Antitrust Authority, and the Korean Fair Trade Commission. In connection with the investigations related to Nortel patent assets, the Division worked closely with the Canadian Competition Bureau.
The Division also cooperated closely with the EC in its recent investigation into the Deutsche Borse/NYSE Euronext merger. The Division and the EC communicated extensively throughout the course of their respective investigations, with frequent contact between the investigative staffs and the leaderships of the two agencies, aided by waivers from the merging parties. The differing conclusions of the two agencies (the Division required a divestiture, whereas the EC blocked the merger in its entirety) resulted from differences in the markets in the respective jurisdictions. The Division had concerns about the U.S. equities market, whereas the EC had concerns about European financial derivatives. Nevertheless, as the EC stated, “the Commission and the US Department of Justice (DOJ) cooperated closely in this matter, although the issues on which [the agencies] focused were different.”
This matter illustrates how it is important for agencies to work closely together even when market conditions differ among jurisdictions, so that each agency can understand, and anticipate, the outcome of the other’s investigation.
The Division also worked closely with the German Federal Cartel Office in the two agencies’ respective investigations into the acquisition of certain patents and patent applications from Novell Inc. by CPTN Holdings (a holding company owned by Microsoft Inc., Oracle Corp., Apple Inc., and EMC Corp.). Aided by waivers from the parties, the agencies discussed information on, and assessments of, likely competitive effects and coordinated on potential revisions to the parties’ agreements. This was the first in-depth merger enforcement cooperation the Division had had with Germany in 20 years.
The Division also cooperated with its counterparts in Mexico, South Africa, and the United Kingdom in the agencies’ respective investigations into the acquisition by Unilever of Albert-Culver Co. Aided by waivers from the parties, the agencies were able to enter into useful dialogue with each other to conduct the respective investigations and crafted remedies appropriate to our respective jurisdictions.
As Special Advisor, International Rachel Brandenburger has noted in her speech before the American Chamber of Commerce in Brussels in February 2012, “building on existing relationships and creating new ones is key to our vision for the future of competition policy and enforcement.”
In October 2011, the Division, the Federal Trade Commission (FTC), and the EC celebrated the 20th anniversary of the United States/European Union Cooperation agreement in Brussels. The three agencies also issued revised Best Practices in Merger Investigations. These best practices provide an updated advisory framework for interagency cooperation when one of the U.S. agencies and the EC’s Directorate-General for Competition are reviewing the same merger. The best practices were the fruit of a series of discussions among the three agencies reviewing experience since the best practices’ original adoption in 2002. The revised best practices seek to promote fully-informed decision-making by facilitating the exchange of information between the agencies; minimize the risk of divergent outcomes; enhance the efficiency of investigations; reduce burdens on merging parties and third parties; and increase the overall transparency of the merger review process.
In December 2011, the Division, FTC, Canadian Competition Bureau, and Mexican Federal Competition Commission met to reaffirm their commitment to effective enforcement cooperation. The agencies’ discussions covered a wide range of enforcement and policy issues, including updates on merger policy and enforcement in the three jurisdictions and the sharing of recent experiences in areas of mutual enforcement interest.
The Division has also worked to intensify its relations with newer jurisdictions, in particular the BRICS (Brazil, Russia, India, China, and South Africa). The Division made great strides in its relationships with, in particular, China and India in 2011.
In July 2011, the Division and FTC signed a memorandum of understanding (MOU) in Beijing with the three Chinese antimonopoly agencies—the People’s Republic of China National Development and Reform Commission (NDRC), Ministry of Commerce (MOFCOM), and State Administration for Industry and Commerce (SAIC). This was an important step in building a relationship with China on competition issues. In November 2011, a guidance document for cooperation in merger cases was issued by the Division, FTC, and MOFCOM during a visit to Washington, D.C. by MOFCOM Vice Minister Gao Hucheng. The Division and FTC have also conducted frequent meetings and training workshops with the Chinese agencies, both in China and the United States, to discuss substantive antitrust analysis and effective investigative techniques; commented on draft rules and guidelines; and had less formal exchanges that deepen our mutual understanding and cooperative relationships.
(L-R) Federal Trade Commission Chairman Jon Leibowitz; Gao Hucheng, China International Trade Representative and Vice Minister of the Ministry of Commerce (MOFCOM); and Acting Assistant Attorney General Sharis Pozen meet in Washington, D.C. FTC Photo/Artis D. Carter
The Division has engaged with India’s competition authorities—Ministry of Corporate Affairs (MCA) and Competition Commission of India (CCI)—for several years. Most recently, the Division hosted Minister of Corporate Affairs Veerappa Moily in Washington, D.C. in November 2011 and participated in exchanges among Division, FTC, and Indian experts in New Delhi and Washington to share the Division’s enforcement and administrative experience. The Division expects to conclude an MOU on cooperation with MCA and CCI in the near future.
Department of Justice and Indian government officials meet in Washington, D.C.
Also in 2011, the Division participated in conferences and workshops with the Competition Commission of South Africa and Russia’s Federal Anti-Monopoly Service.
On March 31, 2011, the Division and the FTC signed an antitrust cooperation agreement with Chile’s Office of the National Economic Prosecutor, the agency that enforces Chile’s competition law. The antitrust cooperation agreement enables the U.S. and Chilean agencies to improve their law enforcement relationship regarding competition matters.
As part of the Division’s efforts to strengthen its relations with antitrust agencies outside the United States, one of the Division’s senior career officials spent two weeks working in the EC’s DG Comp in November 2011, and the Division hosted a DG Comp manager in Washington, D.C. in December 2011. The exchange was the first in the Division’s new Visiting International Enforcers Program (VIEP). This is envisioned, along with our other international efforts, as an enduring recognition of the ever-smaller world in which we live.
Multilateral Organizations and Transparency and Procedural Fairness
The Division engages in multilateral dialogue on antitrust policy and enforcement and is an active participant and leader in various international competition fora, including the Organisation for Economic Co-operation and Development (OECD) and the International Competition Network (ICN). Transparency and procedural fairness in antitrust enforcement have been major themes in OECD, and have also been discussed in other international fora, including the ICN, the Asia Pacific Economic Cooperation (APEC), and the Trans-Pacific Partnership Free Trade Agreement (TPP) negotiation. The Division continues to promote these concepts, both at home and abroad.
The Division has been the chair of the OECD’s Working Party 3 (WP3) (on Enforcement and Cooperation) for many years and is an active participant in the OECD’s meetings. Over the past two years, former Assistant Attorney General Christine Varney and Acting Assistant Attorney General Pozen, in their roles as chair of WP3 of the OECD’s Competition Committee, have led three roundtables on transparency and procedural fairness. These discussions will be reflected in an OECD publication that will be published later this year. At its last meeting, in February 2012, the OECD approved a two-year work plan in the area of international cooperation, which will be conducted by WP3.
The Division is a founding member of the ICN and serves on the steering group that guides the direction of the ICN’s work. The Division currently co-chairs the ICN’s Merger Working Group, together with the Irish and Italian competition authorities, and leads a subgroup of the Cartel Working Group, together with the Brazilian authorities. Under the steering group’s auspices, the Division is also leading an ongoing strategic effort, along with the Turkish Competition Authority, to evaluate the ICN’s work and future goals with respect to international enforcement cooperation, in line with the ICN’s mission of facilitating effective international cooperation. This project will be presented to the ICN membership for approval in April 2012.