Thursday, November 18, 2010
Posted by D. Daniel Sokol
William Blumenthal (Clifford Chance) explains Thy Lamp Unto the World: International Convergence After the 2010 Guidelines.
ABSTRACT: Those of us who practice competition law globally and who engage in international technical assistance are regularly struck by the wide variation in culture and expertise among the world's competition agencies, now numbering more than 100. Uniformity is decades away, if that. But serious efforts towards achieving greater uniformity are a daily event, as (i) the more prominent and sophisticated agencies routinely eyeball and borrow from one another, replacing their own practices with better practices observed elsewhere, and (ii) the newer and emerging agencies carefully read the outputs of the leading agencies with a view towards possible emulation. Even if Americans don't always read the statements from the Federal Trade Commission ("FTC") and the U.S. Department of Justice ("DOJ") carefully, foreigners do; and even if foreigners don't always elect to follow U.S. practice, they give it serious consideration. The U.S. government's description of its practice is highly influential. One need only examine the rack of submissions by national delegations at meetings of the Competition Committee of the Organisation for Economic Co-operation and Development-the papers from the United States and the European Commission are always the first to run out. Given the range of objectives behind government policy statements, it's probably too much to ask that the statements be written with international implications as the principal concern. It's not too much to ask that the statements be evaluated with international consequences in mind.
In releasing the 2010 Horizontal Merger Guidelines, FTC and DOJ needed to address many objectives and many audiences, and they often succeeded. Promotion of multijurisdictional rationality, however, does not rank high among the Guidelines' strengths. As discussed more fully below, the Guidelines have several related shortcomings when viewed from the perspective of international implications. First, the Guidelines introduce greater flexibility and discretion, but at a cost of diminished predictability and operational specificity. They will be less useful than they might have been as a tool for teaching other jurisdictions the mechanics of sound merger analysis. Second, the greater flexibility is achieved in part through theories and methodologies that are a bit eclectic, sometimes analytically treacherous, and often expressed without clear delineation of limiting principles. The Guidelines are ripe for erroneous application by unsophisticated users. They are also at risk for pretextual application by sophisticated users who might not share our view of appropriate competition policy and who are simply seeking cover in our words. Third, the Guidelines dilute the objective of encouraging rule of law in other jurisdictions. By reducing clarity and consistency in favor of granting broader discretion to decision makers, the Guidelines waive an opportunity to serve as a template for bringing greater order to global process.