POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. INTERNATIONAL COOPERATION
AGREEMENTS
Presented by
Larry Fullerton
Vienna , Austria
October 13, 2000
ORIGINAL IDEAS. UNCOMMON SOLUTIONS.
U.S. COOPERATION AGREEMENTS

Significant Antitrust Enforcement Trends

Expanding application of national antitrust laws to
cross-border business activities

Expanding cooperation among enforcement officials
in different jurisdictions
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Forms of International Antitrust Cooperation

Informal cooperation

Bilateral cooperation agreements

Multilateral agreements
 Binding agreements
 Non-binding agreements
 Calls for stronger multilateral instruments
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Why Are These Trends Important?

Practical impacts on affected private parties

Significant risks and burdens

Possible opportunities to advance business goals
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Causes for Increasing Cross-Border Enforcement

Globalization of business

Proliferation of new antitrust regimes

Acceptance of U.S.-style “effects” test

Trade liberalization
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Increasing Globalization of Business

DOJ: Matters with international dimension have
increased from 2% in 1990 to 40% in 1998

FTC: 50% of investigated mergers have an impact on
consumers in more than one country

EC: Notified mergers involving a U.S. company have
increased from 10 in 1992 to 125 in 1999
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Proliferation of New Antitrust Regimes

Today, 80 countries have antitrust laws

20 more countries are in the process of drafting laws

60 jurisdictions require or provide for merger notices

Additional merger reviews by sub-national units and
regulatory agencies
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Acceptance of U.S.-Style “Effects” Test

Foundation for U.S. enforcement in foreign cartel and
merger areas

Increasing acceptance of U.S. extraterritorial
enforcement

Increasing adoption of “effects” test in foreign
jurisdictions, including EU
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Impacts of Trade Liberalization

Trade liberalization exposes exclusionary conduct by
private sector

Private sector conduct must be addressed by antitrust
laws, rather than trade laws

Pressure increases to use antitrust extraterritorially to
open foreign markets
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Results: Increasing Extraterritorial Use of Antitrust

Especially in cartel and merger enforcement areas

New need for mechanisms for notice, consultations

“Traditional” or “negative” comity considerations

Expanding requests for cooperation, assistance
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Results: Multiple, Concurrent Investigations

Enhanced pressure for mutual assistance

Increasing pressure for coordination

Investigations

Remedies
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

Results: Burdens of Multi-Jurisdictional Mergers

Differing reporting requirements

Differing merger review standards

“Iceberg effect”--exacerbated by increasing
complexity of mergers and limited agency resources
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
U.S. COOPERATION AGREEMENTS

U.S. Bilateral Antitrust Cooperation Agreements

U.S. cooperation agreements with 8 jurisdictions

U.S./EU 1991 agreement has served as model

Agreements provide for:
 Notification
 Information sharing and mutual assistance
 Consultations and traditional comity
 “Positive” comity
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
US COOPERATION AGREEMENTS

Positive Comity

Authorities in one country (“requesting” country)
may ask authorities in the other (“requested” country)
to investigate conduct in the requested country

Requirements:

The conduct harms interests of requesting country

The conduct may violate law of requested country

Requested country must “carefully consider” request
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
US COOPERATION AGREEMENTS

Other U.S. Bilateral Agreements

U.S./EU 1998 supplemental positive comity
agreement (does not apply to mergers)

Agreement with Australia under the International
Antitrust Enforcement Assistance Act (“IAEAA”)

Mutual Legal Assistance Agreements (“MLATs”)
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
US COOPERATION AGREEMENTS

U.S./EU Bilateral Cooperation

Mostly with regard to cross border mergers

Result: increasing convergence of merger standards

Prospects for increasing cooperation on cartels

Mario Monti: “Personally convinced” of the need for
expanded cooperation agreement
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
US COOPERATION AGREEMENTS

Multilateral Antitrust Agreements

No general, binding multilateral agreement

Non-binding agreements of OECD

Limited competition-related provisions of WTO

Limited provisions of NAFTA

Increasing calls for multilateral solutions
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
US COOPERATION AGREEMENTS

Risks and Opportunities for Private Parties

Risks of extraterritorial enforcement

Risks of information disclosures

Burdens of multi-jurisdictional merger reviews

Opportunities presented by positive comity
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP