Gaps and bridges: transatlantic cooperation Bevin MB Newman and - PDF document

07 EU-US sjc 26-30 8/9/04 9:08 am Page 26 EU-US COOPERATION Gaps and bridges: transatlantic cooperation Bevin MB Newman and Marta Delgado Echevarría* Jones Day Antitrust enforcement agencies in the United States and the Euro- also designated appropriate points in the course of a merger investi- pean Union enjoy the strongest bilateral relationship in the compe- gation when it is appropriate and helpful for enforcement agency tition law arena today. This relationship is in many ways a model officials to confer at a high level. 6 for cooperation, and regulators on both sides of the Atlantic Ocean Most recently, the US and the European Communities entered an Agreement on Mutual Legal Assistance. 7 This agreement affects take seriously their collective leadership of the expanding commu- nity of credible antitrust regimes throughout the world. Effective for- cooperation between the United States and the various Member mal agreements are in place between the two jurisdictions, but these States, rather than with the European antitrust institutions them- agreements do not define the close collaboration among competition selves. Furthermore, the agreement applies only to criminal matters law officials. Rather, what makes the relationship effective is the and so will not affect antitrust cooperation, as violations of articles “quiet and business-like cooperation” between the European Com- 81 and 82 of the EC Treaty are not criminal offences. petition Directorate and its counterpart agencies in the United States—the Federal Trade Commission and the Department of Jus- Why cooperate and what has cooperation tice Antitrust Division. 1 As the new chairman of the United States accomplished? Federal Trade Commission recently noted, “on the remarkable num- Effective cartel enforcement ber of reforms that the EU has undertaken … we have provided input US and EU antitrust enforcement authorities remain staunchly com- when requested to do so, and this may not mean necessarily taking mitted to cooperating in the detection and punishment of interna- ultimate positions on what is good or bad, but it may mean just talk- tional cartel activities—called variously by enforcers on both sides ing things through and relaying our own experiences.” 2 There are of the Atlantic the “supreme evil of antitrust” 8 and the “scourge of the economy”. 9 Detection of highly lucrative cartel activity remains practical limits to the collegial workings of transatlantic coopera- tion, however, and the US and EU antitrust authorities face new chal- the unique charge of government enforcement, and cooperation lenges to their increasingly common competition policy goals. among competition authorities is vital to this end. Cooperation and convergence in cartel enforcement provide powerful incentives for The legal framework for US–EU cooperation participants to avail themselves of effective amnesty programmes and The United States and the European Communities have entered into to expose illegal activity in all jurisdictions where they have expo- two agreements controlling cooperation on antitrust matters in sure. which the governments’ interests overlap. The first agreement, The most profound boost to cooperation in cartel enforcement entered into in 1991, effected a mutual obligation to notify antitrust resulted from collaboration between US and EU officials on the con- matters to the extent that these cases concern the important interests vergence of the two jurisdictions’ corporate amnesty programmes. of the other authority, and to exchange information on general mat- Based in part on shared insights and experiences with US antitrust ters relating to the implementation of competition rules. 3 The 1991 authorities in fighting the increasing ‘internationalisation’ of cartel Agreement incorporates the traditional concept of comity—each activity, the European Commission revised its amnesty programme party agreed to take into account the important interests of the other in 2002 to provide more transparency for applicants and less dis- cretion for enforcers in administering the programme. 10 The Com- in its competition enforcement actions. The 1991 Agreement also contains a ‘positive comity’ procedure under which either party may mission’s revised amnesty programme now substantially mirrors the request the other to enforce its competition laws to address anti-com- US Department of Justice Corporate Leniency Policy. 11 petitive conduct in its territory that affects the important interests of According to US antitrust officials, the Commission’s revised pro- the requesting party. The 1991 Agreement contemplates regular con- gramme “has led to a surge in parallel amnesty applications to both the Commission and the Division.” 12 Similarly, the level of coopera- sultation on broad competition policy matters and enforcement activ- ities. The US and European Communities signed a second antitrust tion has swelled as a result of the revised programme. The US and cooperation agreement in 1998. 4 The 1998 Agreement, which does European authorities, often in conjunction with other enforcement not apply to merger reviews, clarifies how and when positive comity agencies around the globe, have conducted near simultaneous exe- should be invoked. cution of search warrants and other inspections. In 2003, the US and In 2002, the antitrust enforcement authorities in the EU and US the EU conducted a multilateral investigation with antitrust author- jointly issued and adopted a protocol for reviewing mergers subject ities in Japan and Canada regarding alleged cartel activities in the plastics additives industry. 13 In May 2004, the US and the EU made to review in both jurisdictions. These merger ‘Best Practices’ set out a structured basis for cooperative merger control, and encouraged known their joint investigations of alleged price fixing among lead- merging parties to avail themselves of opportunities for coordinated ing European paper and pulp manufacturers, which authorities in review by facilitating parallel timing in multiple jurisdictions and Europe based on the confession of a participant in the alleged cartel information sharing between investigating agencies. 5 The protocols activities. 14 26 The European Antitrust Review 2005