International Law

Agency Heads Discuss Antitrust Convergence, Recent Developments

This posting was written by Jefrey May, Editor of CCH Trade Regulation Reporter.

Speaking on the topic of international convergence at Fordham University?s 36th Annual Conference on International Antitrust Law and Policy, the heads of the two federal antitrust agencies commented on increased convergence between their respective agencies.

Agencies ?In Sync?

In his September 24 remarks, FTC Chairman Jon Leibowitz noted that the FTC and Department of Justice Antitrust Division were much more in sync in recent months, pointing to the recently announced decision for a joint review of the horizontal merger guidelines as an example.

Another indication of growing consensus between the agencies includes Assistant Attorney General Christine Varney?s decision to withdraw the Antitrust Division?s September 2008 report, entitled ?Competition and Monopoly: Single-Firm Conduct Under Section 2 of the Sherman Act.?

When the Justice Department?s report was released last September, three of the four FTC members objected to it. According to Leibowitz, consistency at home will help efforts to promote international antitrust convergence.

Merger Review

Antitrust Division chief Varney noted that there has been a trend toward convergence in the area of merger review. Varney expressed her belief that ?openness to others? ideas and new approaches is critical to our efforts towards greater convergence.? This openness is reflected in the decision to hold joint Department of Justice/FTC workshops to review the horizontal merger guidelines, as well as the European Commission?s review of its merger review practices and remedies and subsequent 2004 issuance of guidelines regarding horizontal mergers and a 2005 Merger Remedies Study.

Varney also noted that, while there have been ?strides towards convergence regarding the standards for single-firm conduct,? there was ?a need to continue making progress on that front.? Varney pledged to work toward convergence, noting that a lack of unity regarding single-firm conduct standards presented significant issues for international businesses.

Varney?s September 24 speech is available here on the Department of Justice website.

Fines Imposed by the European Competition Commission

At a later session of the Fordham program, European Commission (EC) Competition Commissioner Neelie Kroes told attendees that fines are starting to deter cartel behavior. ?Never, ever under-estimate the effect [of] large fines,? Kroes said. Despite the absence of the threat of jail terms for antitrust violations, ?senior management across all sectors . . . are now starting to understand that we mean business.?

Kroes explained that fines were not deterrent in previous decades. ?Now, taking better account of the economic impacts of abuses and cartels, we fine in order to deter, linking the fine to the relevant sales of the infringing company,? the official said. ?If we catch recidivists?the French glass company Saint-Gobain is a good example?the fine increases are severe.?

Last November, Saint-Gobain was fined 896 million Euros for its role in an illegal market sharing agreement.

The fines are imposed without regard to the nationality of the company, according to Kroes. ?I would like to point out that only 13 of the 180 companies fined by the European Commission in my term are based in the U.S.,? she added.

The Commissioner?s remarks appear here on the European Union?s ?Europa? website.

Full post as published by Trade Regulation Talk on September 29, 2009 (boomark / email).