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Monday, October 24, 2011

Twenty Years of Transatlantic Antitrust Cooperation: The Past and the Future

Posted by D. Daniel Sokol

Rachel Brandenburger (DOJ) describes Twenty Years of Transatlantic Antitrust Cooperation: The Past and the Future.

ABSTRACT: I am deeply honored to have been asked to contribute to the celebratory publication of articles marking the 20th anniversary of the US/EU Cooperation Agreement. My appointment by then-Assistant Attorney General Christine Varney as Special Advisor, International, at the Antitrust Division of the U.S. Department of Justice ("DOJ"), demonstrates the importance the Antitrust Division attaches to international cooperation, and it gives me personally a privileged perspective on the nature of such cooperation with both the European Commission and the antitrust agencies around the world. Against that backdrop, I offer the following reflections on 20 years of transatlantic antitrust cooperation.

A mere 18 months passed between then-Competition Commissioner Sir Leon Brittan's first public reference to "the desirability of a treaty or less formal agreement" to deal with "the possibility of conflicts of jurisdiction" and the signing of the US-EC bilateral antitrust cooperation agreement on September 23, 1991. It is not surprising that the negotiators, including then-Assistant Attorney General Jim Rill, were able to produce the text-which became the model for many subsequent U.S. antitrust cooperation agreements-in a relatively short time, by the standards of international negotiations. This was clearly an idea whose time had come. Indeed, as then-Acting Attorney General Bill Barr noted upon signing, "the increasing integration of [the U.S. and EU] economies and the emergence of an international business environment make cooperation between [the U.S. and EU] governments in the area of antitrust enforcement absolutely essential." The EU's Merger Regulation had come into effect in 1990, the U.S. and EU economies were becoming increasingly integrated through trade and investment, and the two US antitrust agencies, the DOJ and the Federal Trade Commission ("FTC"), and the European Commission ("EC") were the most prominent actors in global competition law and policy.

The stated purpose of the agreement was "to promote cooperation and coordination and lessen the possibility or impact of differences between the Parties in the application of their competition laws." It was a forward-looking agreement based on mutual interest. It committed both the U.S. antitrust agencies and the EC to "render assistance" to each other's enforcement activities, and provided explicitly that, "in any coordination arrangement, each Party shall conduct its enforcement activities expeditiously and, insofar as possible, consistently with the enforcement objectives of the other Party." The agreement provided for "positive" comity, allowing the U.S. antitrust agencies or the EC to request that the other initiate appropriate enforcement activities under its own laws when the requesting party's important interests were affected. Finally, the agreement committed each party, at all stages of its enforcement activities, to take into account the important interests of the other party, with a list of factors to consider in balancing these interests.

As we now know, the 1991 Agreement ushered in an era of mutual respect, trust, expanded communication, and agreement as to common objectives and perspectives. This path-breaking agreement was not universally understood, however, or even welcomed, at the time. A Wall Street Journal editorial the day after the signing noted as "remarkable" the "extent to which it is being interpreted as an alliance against the Japanese." Antitrust practitioners were more concerned about lack of substantive convergence between the U.S. antitrust agencies and the EC, and feared the consequences of unchecked exchanges of confidential business information. The Financial Times cited competition experts who feared that "companies might face greater difficulty in winning approval because of the increased exchange of information by competition authorities"-despite the fact that the agreement did not provide for the exchange of confidential information.

Written with the benefit of hindsight, this article will examine each of these long-forgotten concerns, and explain why they have been displaced by the obvious success of the agreement's collaborative purpose.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/10/twenty-years-of-transatlantic-antitrust-cooperation-the-past-and-the-future.html

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