October 27, 2014
International Cooperation on Competition Matters: An Emerging
Enforcer’s Perspectives
Kiran Nandinee Meetarbhan, Executive Director, Competition Commission of Mauritius
The Competition Act 2007 (‘CA 2007’) has gone a long way in entrusting the
Commission with such powers and functions as to enable it to effectively discharge its
functions. Although the CA 2007 extends the reach of our enforcement powers beyond
national borders, the applicability and effective application of such powers within the realm
of international antitrust investigations (relating to conducts/practices having an effect in or
within Mauritius) remains yet to be tested. As of this date, the CCM has not had the
opportunity of experimenting with the extraterritorial scope of the Act. Given the global
pervasiveness of business transactions, it is only a matter of time before the CCM is called
upon to enforce its competition legislation transnationally. At the same time, however, there
is no denying that investigating restrictive business practices having an international scope
naturally poses important challenges which can be resolved if effective cooperation is
willfully encouraged between competition agencies – irrespective of their level of
enforcement experience.
The objectives of international cooperation need not serve merely as a means to coordinate
parallel investigations but most assuredly as the avenue for improving enforcement action
based on case-oriented peer-to-peer-learning from other’s enforcement experience. Viewed
from an emerging agency’s position, the reasons for encouraging horizontal collaboration are
all the more compelling: the Competition Commission of Mauritius (CCM) is not a selffunded institution and relies solely on government funding for its enforcement, advocacy,
capacity building and administrative requirements/expenses. Scarce human resources and
limited access to expert training in contemporary issues of competition enforcement plague
most young agencies. The CCM operates with an all-inclusive team of twelve junior and
senior investigative officers qualified in law and/or economics, headed by one Chief
Economist (as supervising officer for the economists’ team) and one Legal Executive (for the
lawyers’ team). Over its five years of enforcement, the CCM has been called upon to
confront a high caseload of enquiries and investigations, forcing it to grapple with complex,
economic theories assessing the effects of harm perpetrated in technically challenging,
technology-driven, niche markets, without a comparable incremental increase in human
capacity or the required specialised knowledge and expertise to comprehensively understand
and assess the peculiar competition dynamics of complex markets.
In several of the cases, informal assistance has been sought from DG COMP, OECD, CCSA
and other agencies.
Mauritius (like many developing economies) is a small net-food importing economy, with
heavy reliance on imports mostly from advanced, industrialised countries.
Restrictive
business practices stemming from the territories of mighty trading partners might well be
imported into its vulnerable economy, to the detriment of the latters’ consumer welfare.
Whenever a developed country is investigating potential restrictive business practices on the
part of those enterprises which have operations in developing countries, it is therefore a sine
qua non that developed countries assist, to the best of their abilities, developing countries in
the detection of such conducts by providing relevant and first-hand information, which may,
for the purposes of meeting the procedural requirements, amount to reasonable grounds for
launching an investigation within the younger agency’s national market(s). In today’s
globalised world, combatting competition law infringements having an international
dimension is increasingly becoming the enforcement norm, and one which does not lighten
the enforcement burden of developing competition agencies; sharper vigilance of the
competition dynamics in national and transnational net-importing markets, however difficult,
2
remains of the essence. While competition authorities in developed economies are more
likely to establish a dedicated unit specialized in market-watching and intelligence
information gathering, authorities in developing countries lack both the resources and
expertise to effectively carry out such intelligence gathering within national borders and even
less within the international forum. Increased cooperation on this front will certainly go a
long way in aiding younger agencies to enhance and perfect their enforcement capacities
while building coordinated working relationships among different agencies.
The most strategic solution to countering the enforcement lacunae certainly rests in investing
in specialised training in investigative and enforcement skills for the benefit of our case
handlers and upgrading their knowledge of competition law and economics.
Such
investment, while crucial for enhancing the quality of enforcement action, adds to the
financial burden of developing country agencies. Informal horizontal cooperation between
competition agencies can actually serve to increase the expertise of an agency’s personnel,
hence creating new possibilities for the boosting of national competition control and
advocacy. At the same time, cooperation ensures that the agency knows the latest trends of
international competition law and economics when implementing national competition
policy.
A key element of informal cooperation however is building working relationships based on
trust. Since informal cooperation does not rely on explicit rules protecting the confidentiality
of exchanged information, this kind of informal cooperation can work only if the assisting
agency trusts the requesting agency to use the information properly. The exchange of nonconfidential information and general views on a case might be sufficient in and of itself in
many cases.
Without discarding important legal differences inherent in the legislative
frameworks of cooperating jurisdictions, a newly-established competition agency has much
to learn from and inspire itself from case theories and theories of competition harm as well as
3
the body of legal and economic analyses developed in well-advanced jurisdictions which
could fill in the gaps created by the lack of practical experience, promoting consistent case
outcomes where relevant and applicable, thus allowing for the desired legal certainty in
relation to what firms can and cannot do across the globe.
The key to maximising the benefits and effectiveness of such informal cooperation
mechanism is by encouraging informal contacts at an early stage of a case and including
regular consultation among agencies on matters such as timing of the investigation, the theory
of harm, and potential remedies, especially in cases of abuse of dominance/unilateral conduct
and merger reviews.
In addition to informal cooperation mechanisms, advanced competition agencies and more
recently, emerging antitrust enforcers are increasingly turning towards and using different
legal bases for formal cooperation: including bilateral/plurilateral cooperation agreements,
fully fledged international treaties, and memoranda of understanding, among others. These
agreements, if effectively used, provide a valuable tool within a competition agency’s arsenal
of enforcement and advocacy instruments. Whereas some non-binding FCAs merely aim to
formalise existing working relationships and are drafted on the basis of best-endeavours,
other FCAs allow more or less intense forms of cooperation between signatories.
For
example, they may make possible the sharing of confidential information by including
provisions for confidentiality waivers.
Among the powers vested in the Competition Commission are: the authority to co-operate
with other foreign competition agencies assigned with functions similar to those of the
Commission,1 without any further provision specifying the modalities of such cooperation.
In October 2012, the CCM concluded its first MoU with the French Autorité de la
Concurrence (a long-established competition agency) while the existing MoU with the Fair
1
Section 6(d) of the Competition Act 2007.
4
Trading Commission of Seychelles (a relatively new competition agency) was signed in July
2013. These MoUs aim to foster closer cooperation between the signatories without creating
legally binding obligations for either of them. While mandating the exchange of investigative
experiences, the MoUs only vaguely mention the issue of sharing of case-specific,
confidential information as a means of cooperation, which the signatories ‘may’ consider
while respecting the requirements of each party’s laws.
Limited in time to a period of five years subject to consensual renewal, limited use has been
made of these bilateral MoUs in the course of the CCM’s enforcement activities. This brings
to the fore the issues and challenges arising out of bilateral cooperation agreements between
agencies, especially those at disparate levels of enforcement in the competition arena.
Formal Cooperation on Antitrust Matters: Issues and Challenges
In addition to resource constraints, several other factors add to the burden of competition
agencies when seeking formal cooperation on case-specific antitrust investigations. These
include: legal limitations arising out of differences between legal systems regarding the
treatment of anticompetitive conduct, national divergences in procedural rules, the reach of
and response to discovery mechanisms, the administrative burden of communication and
coordination and (mutual) lack of experience, and the lack of interest in cooperating closely
with younger agencies, among others.
In their joint 2013 Survey on International Enforcement Cooperation, the Secretariat report of
the OECD in collaboration with the ICN, raised concerns that at present, apart from regional
cooperation, frequent or regular experience in international cooperation appears to be
concentrated among a few more experienced agencies.
Even where cooperation is extended by a foreign agency, any information exchanged has to
pass the test of being receivable and admissible as per the requesting agency’s evidentiary
5
rules. Concerns may arise where, for instance, information exchanged would have been
treated as legally privileged at the receiving end.
Were the CCM to be the receiving
jurisdiction, the integrity of its investigation could run the risk of being compromised on the
ground of procedural abuse, given that the CA 2007 guarantees the protection of legally
privileged information.2
The absence of well defined, agreed ‘ground-rules’ for the
information exchange can hinder much-needed co-operation of this type, without which
developing agencies like such as the CCM will always lag behind in walking the
transnational enforcement pathway.
What Developing countries need: A Robust Legal Framework for Effective Cooperation
It is often seen that bringing a developed country to the negotiating table is often a herculean
task for weaker, developing countries – much lesser in economic might. The developing
agency has to accept whatever terms (or the least that) the developed country member is
willing to offer, and account must be taken of the normally robust confidentiality and data
protection requirements in place within the national regime of the stronger signatory. In most
instances, the advanced competition agency would have been cautious in safeguarding its
national interests when drafting the bilateral cooperation agreement provisions. Developing
countries in such instances neither have the political clout to bargain for better cooperation
nor to enforce the already existing (mostly non-binding) cooperation agreement. As such,
there is an overarching need for developed/advanced competition agencies to adopt a more
strategic approach towards international agreements and for tailoring the instrument to the
real needs of the relationship and to facts such as the size and importance of the other
signatory country’s economy, the intensity of the trade and investment relationship with the
country concerned, and the degree of maturity of its competition regime.
2
Section 54 of the Competition Act 2007.
6

Normative Confidentiality tempered by confidentiality waivers
One of the most important limitations to international cooperation relates to the legal
limitation within the assisting jurisdiction’s competition regime, more specifically: the legal
protection afforded to confidential information which constrains the ability of competition
agencies to share and exchange information and other evidence obtained during an
investigation. Most national competition laws do not permit the sharing of confidential
information absent the consent of the party having submitted that information.3 Differences
in legal definitions and scope of confidentiality, privacy and legal privilege, can and actually
do affect an agency’s ability to share certain information and equally limits its willingness to
cooperate. Similarly, differences in data protection systems may complicate the exchange of
information with third countries wherein, for example, transfer of personal data may become
lawful only when there is adequate personal data protection in the requesting jurisdiction.
The inclusion of confidentiality waivers (which apply in given circumstances but not others,
for example as regards information submitted by a cartel member as part of its leniency
application) in cooperation agreements allows agencies to exchange confidential information
about the case, especially in transnational merger reviews, quickly and at an early stage, thus
facilitating coordination in an investigation. It also helps to avoid using official channels in
formal cooperation procedures, thereby avoiding consequent delays, which such procedures
could have entailed.
3
The Mauritian Competition Act 2007 poses a general prohibition as regards the sharing of confidential
information. As a general principle, the Commissioners, the Executive Director and the Commission’s staff are
under the obligation to protect the confidentiality of any information given to it in confidence or obtained
further to the Executive Director’s investigative powers. Disclosure of any information relating to any
particular business or the affairs of an individual and obtained under or by virtue of the Act, is only permitted
so long as the disclosure is made inter alia:
(i)
for the purpose of responding to a request made by a foreign or multinational competition
authority for the production of information in circumstances where Mauritius is a party to
an international agreement providing for the production or exchange of such information
[Emphasis added]
7

Administrative Assistance in the course of an Investigation
Multinational companies, though investing significantly in developing country economies,
rarely base their headquarters therein. Given the lack of financial and human resources and
the demands of confidentiality, developing country agencies can at least expect reinforced
cooperation on the part of their fellow advanced enforcers when the developing agency has
launched an antitrust investigation into conduct of enterprises that have their headquarters
based in the developed country. A request for investigatory assistance to an agency that
might be better placed to obtain evidence in its own territory could enhance the enforcement
by the requesting agency and also contribute to effective transnational enforcement.
Developed countries may assist in the service of documents and gathering of evidence
whether through oral examination of a person or through lawful request or seizure of
documents relevant to investigations being carried out in developing countries.
Concluding Remarks
The world is getting ever smaller. Technological development is shrinking our world: we can
communicate with each other by videoconferencing, as well as by phone, and by emails
across many time zones. This is true for businesses as well and should equally be true for
antitrust agencies. It is the shrinking world—the globalisation of markets and businesses—
that necessitates the strides that have been made, and that will continue to be made, in
bringing antitrust and competition agencies around the globe together. Those same forces that
are allowing businesses to go global are globalising antitrust agencies as well.
Against the backdrop of our multipolar world of antitrust enforcement, cooperation among
the national competition authorities within our region is crucial to counter the asymmetric
development of competition law regimes in neighbouring countries.
8
Inspite of all efforts of developing countries to develop resource capacities, emerging markets
will face resource constraints. Developing countries cannot be expected to have the wide
range of expertise required, and this is where the South-South or regional cooperation is of
prime importance.
The capacity that an individual country may not have on its own may be available
collectively at regional level. Developing countries or Small States within a particular region
often have a lot in common, in terms of legal system, educational institutions, etc. By
pooling their resources and developing specialist centres where each country can specialize
in one aspect, the region collectively will have the skills. Then one agency in a given
country will be able to call upon the specalist country to assist in an investigation where that
particular knowledge is required.
Whether for enforcement or adjudication, collective action would help to reduce otherwise
inadequate capacities.
Obviously, a regional cooperation mechanism would contemplate that each competition
authority remain sovereign. However, creating opportunities for cooperative enforcement and
pooling of resources for capacity building in competition policy within our region (SouthSouth Cooperation) is THE first step towards international cooperation in competition law
enforcement and ultimately, towards convergence where appropriate.
9