Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.S., Canada outline cooperation practices in cross-border merger investigations, (Mar 25, 2014)

By Jeffrey May, J.D.

Today, the Department of Justice Antitrust Division, the FTC, and the Canada Competition Bureau released a best practices document, identifying the current day-to-day cooperation practices of the antitrust authorities with respect to cross-border mergers.

The document acknowledges the substantial contribution that merging parties can make in facilitating cooperation among reviewing agencies in the merger review process. Agency cooperation is more effective when the merging parties and third parties allow the agencies to share information the disclosure of which is subject to confidentiality restrictions, according to the agencies.

The U.S. agencies must obtain waivers from the parties in order to share certain confidential information with Canada’s antitrust authority, it was noted. “While a party’s choice not to follow some or all of these best practices may complicate cooperation between the agencies, that decision will not in itself prejudice the conduct or outcome of the agencies’ investigations,” the agencies state.

Inter-agency communications. The agencies explain how they communicate with one another as they review a merger involving both countries. A reviewing agency ordinarily will contact its foreign counterpart promptly upon learning of a merger that appears to be subject to review in both the U.S. and Canada and where cooperation may be beneficial. Typically, a tentative timetable for regular inter-agency consultations involving staff is established. Consultations between the senior leadership may be appropriate at any time.

The agencies suggest that merging parties should consider filing their pre-merger notifications concurrently in both jurisdictions to facilitate coordination. This may be particularly beneficial in mergers that are likely to involve a supplementary information request or second request, because the agencies may seek to coordinate those requests.

The agencies share publicly available information and discuss their respective analyses at various stages of an investigation, including market definitions, assessments of competitive effects and efficiencies, theories of competitive harm, economic theories and analyses, and empirical evidence needed to test those theories, where the agencies’ confidentiality obligations permit.

Confidentiality waivers. To facilitate the cross-border cooperation, the staffs of the FTC or Antitrust Division will generally seek to obtain confidentiality waivers from the merging parties. It has become routine practice for parties to grant the U.S. agencies voluntary waivers in cases involving cooperation with the Canada Competition Bureau, according to the agencies. Waivers are not required by the Canada antitrust authority to share information with either the FTC or Antitrust Division. Where appropriate, the reviewing agencies may, therefore, request that third parties waive confidentiality to the U.S. agency.

Remedies. The reviewing agencies strive to ensure that the remedies they accept do not impose inconsistent or conflicting obligations on the merging parties, it was noted. Where there are waivers, the reviewing agencies generally will inform one another of remedy discussions with the parties and may share draft remedy proposals. They might even participate in joint discussions with the merging parties, prospective buyers, and trustees.

“We have developed a very close working relationship with our Canadian colleagues based on our shared approach to the implementation of our competition laws and policies,” said FTC Chairwoman Edith Ramirez in an FTC statement released today. “These best practices exemplify our commitment to cooperation and convergence, benefiting our agencies, merging parties, and ultimately consumers.”

William Baer, Assistant Attorney General in charge of the Antitrust Division, described the best practices as “a testimony to our agencies’ long-standing and productive working relationship and the importance all of our agencies place on transparency.”

“This initiative shows the strength of the Canada-U.S. partnership in competition law enforcement that is based on decades working together to promote competition for the benefit of consumers,” said John Pecman, Canada’s Commissioner of Competition, in announcing the best practices. “These best practices serve not only to support coordination among our agencies, but also advance the Bureau’s goal of increasing transparency for our stakeholders in the legal and business communities.”

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