Antitrust Law Daily Wrap Up, ANTITRUST NEWS: McSweeny discusses procedural fairness in competition law enforcement, (Oct 30, 2015)

By Michael Menzhuber, J.D., LL.M.

FTC Commissioner Terrell McSweeny discussed the significance of procedural fairness in competition law enforcement in an address given at the King’s College London event series on October 23. In her remarks entitled “Procedural Fairness in Competition Law Enforcement and the FTC Experience,” McSweeny discussed: (1) what is meant by “procedural fairness” and why the concept is vital; and (2) why procedural fairness not only benefits but also legitimizes competition authorities.

Procedural fairness. McSweeny began by noting that procedural fairness is often discussed in the negative, such as through the criticism of frustrated parties subject to a competition investigation or a decision they perceive to be based on an unfair or inadequate process. The advancement of procedural fairness principles are dependent upon the recognition that this is a two-side issue: (1) it is good government to be fair to targets and other parties involved in an investigation; and (2) it is also good for the government by enabling better-informed agency decisions and bolstering the overall credibility of the agency, she explained.

While recognizing concerns sometimes expressed by competition authorities, McSweeny contended that implementing good process leads to better outcomes and can ultimately outweigh concerns about limiting an agency’s discretion. She also stated that commitment to procedural fairness strengthens decision-making in individual investigations; fortifies an agency’s overall legitimacy; and ultimately adds to the credibility of the increasingly shared efforts to protect competition and consumers.

What procedural fairness entails. There are three key practices used by competition agencies to help ensure procedural fairness: (1) separation between investigation staff and decision-making officials; (2) disclosure to parties about breaches of competition law, including factual details and the legal theories upon which the FTC relies; and (3) the opportunity for parties to respond to the allegations, according to the commissioner.

McSweeny next discussed the “Guidance on Investigative Process” issued by the International Competition Network (ICN). The guidance is the most far-reaching, agency-led statement to date discussing best practice recommendations for investigations of competition matters, in her view. The guidance includes recognition of the importance of an effective investigative framework; discusses what should be included to ensure transparency; discusses the two keystones of fair investigative practices—transparency and engagement during the investigation; and addresses the counterbalances to transparency—providing appropriate protections for confidentiality and legal privileges.

FTC procedures and practices. FTC procedures and practices that seek to ensure procedural fairness, McSweeny noted. She explained that internal checks and balances are a key component of procedural fairness. The FTC values open communication with the subjects of its investigations. She noted that there are opportunities for parties to discuss their position with staff lawyers and economists, and with senior management and that she maintains an “open door” policy when presented with a recommendation to sue on a particular matter. Discussions between agency officials and parties are a two-way street and also that, if an investigation proceeds to adjudication, there remain a number of opportunities for defendants to present evidence and make arguments, McSweeny concluded.

News: Antitrust FederalTradeCommissionNews