Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Practitioners encouraged to help promote international cooperation, convergence, (Jun 12, 2014)

By Jeffrey May, J.D.

Antitrust counsel can take steps to help promote international antitrust cooperation and convergence, Leslie Overton, Deputy Assistant Attorney General for Civil Enforcement at the Department of Justice Antitrust Division, told attendees of Northwestern University School of Law's Fifth Annual Chicago Forum on International Antitrust Issues today.

Currently there are roughly 130 agencies enforcing competition laws. The Antitrust Division and the FTC are working with these agencies “to promote multi-jurisdictional antitrust enforcement that is efficient, consistent, and sound,” Overton explained in her remarks, entitled “International Antitrust Engagement: Benefits and Opportunities.”

Overton discussed the benefits of cooperation and convergence. Cooperation increases efficiency through the exchange of information and evidence. It allows open and candid dialogue that helps enforcers better understand competitive dynamics worldwide and discuss theories of harm and best practices. In addition, it facilitates the transfer of knowledge and strengthens ties between agencies at both the staff level and management level.

Cooperation also offers benefits to the business community and counsel, Overton noted. It can result in consistent remedies, expedited investigations, and reduced expense.

Competition agencies are increasingly looking for opportunities to cooperate, especially in the merger enforcement area. In practice, the Justice Department's effective cooperation with foreign counterparts in merger investigations depends on the parties' willingness to grant confidentiality waivers, since the Hart-Scott-Rodino Act prohibits disclosure of confidential information obtained under the Act. Confidentiality waivers will be valuable in nearly all complex transactions. Even absent waivers, however, the agencies discuss public information, provide general information about deadlines, and exchange general views on market conditions and theories of harm, Overton noted.

Overton suggested that counsel consider the model confidentiality waiver issued jointly by the Antitrust Division and FTC last September. The model waiver is intended to cut down on the time it takes to negotiate waivers of confidentiality protections for use in international merger and civil non-merger investigations. It reflects the agencies' recent experiences with waivers and has been “widely used” since it was introduced, according to Overton.

In promoting international antitrust cooperation and convergence, the antitrust agencies need the assistance of the business community and the bar. Overton suggested that counsel take the following steps to facilitate the process:

(1) encourage clients to execute a model confidentiality waiver early in an investigation and to engage openly with the agencies about timing of premerger notification filings;

(2) inform the Antitrust Division about clients’ experiences generally on substance and process with antitrust enforcers in other jurisdictions, as well as with the Antitrust Division itself;

3) make credible arguments to the competition agencies founded on economics principles, whether that advocacy is on behalf of a party in favor of a merger or a competitor opposed to the transaction;

(4) engage in advocacy and volunteer efforts by serving as a faculty member for training programs provided to judges, enforcers, or practitioners in other jurisdictions or by acting as a non-government advisor on International Competition Network programs; and

(5) advise clients to implement—or, in the case of in-house attorneys, play an active and important role in developing and implementing—robust internal antitrust compliance programs that can help a company avoid violating the antitrust laws.

Recent examples of international cooperation. Overton also offered two recent examples of international antitrust cooperation efforts aided by confidentiality waivers. The 2012 investigation of the merger between United Technologies Corporation and Goodrich Corporation—the largest merger in aircraft industry history—was cited. In that case, the waivers enabled the cooperating competition agencies to impose consistent conditions. Moreover, because the Canada Competition Bureau was satisfied with the remedial orders issued by the United States and European Commission, it did not impose additional conditions on the transaction.

The ultimately abandoned combination of Louisiana-Pacific Corporation (LP) and Ainsworth Lumber Co. Ltd. also was noted. Both companies are manufacturers of wood product used in construction and remodeling industries. In this investigation, the Antitrust Division and the Canada Competition Bureau cooperated, in matters such as joint witness interviews, based on waivers granted by the parties. In addition, the agencies’ attorneys and economists shared their respective thinking on theories of anticompetitive harm and analytical approaches to key issues.

Each agency ultimately reached its own decision regarding the anticompetitive nature of deal. In March the parties terminated their September 2013 acquisition agreement in light of difficulties in obtaining approval from the agencies.

Overton concluded her remarks by encouraging the business community and bar to provide the Antitrust Division with feedback on its efforts to cooperate with its international counterparts.

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