FTC Testifies Before Senate Subcommittee on International Antitrust Issues

Federal Trade Commission Chairman Robert Pitofsky today presented Commission testimony on international antitrust issues before a Senate Subcommittee. Pitofsky explained that the FTC applies its competition enforcement policies "to all conduct that has the requisite effects on U.S. commerce and injures either U.S. consumers, or U.S. businesses, whether they are relying on foreign firms as suppliers of goods and services or competing through exports with foreign-based firms here and abroad." The testimony states that as many as half of the FTC's current merger cases have an international dimension, involving a foreign party, relief involving a foreign asset, or a notification to a foreign antitrust authority.

The Commission's testimony before the Senate Subcommittee on Antitrust, Business Rights and Competition outlined the FTC's international antitrust cases, which have challenged anticompetitive conduct and transactions by U.S. and foreign firms. Pitofsky pointed out that U.S. business is one of the major beneficiaries of the agency's activities. The Chairman also noted that a large majority of the cases that the agency reviews do not raise antitrust concerns.

The testimony refers to the cases of Daimler/Chrysler and Lucas/Varity: two cases where the agency did not see any significant antitrust issues and where the Commission worked closely with the European Commission to help ensure expeditious clearance.

Pitofsky also testified about the cooperation with other antitrust enforcement agencies pursuant to bilateral agreements. This cooperation yields "more efficient and consistent results than if we were to try to go it alone," he said. According to the testimony, these bilateral agreements provide a mechanism by which the governments affected by antitrust investigations are notified. In turn, those governments cooperate with the government conducting the investigation. The United States has agreements with the European Communities, Canada and the 29 member countries of the Organization for Economic Cooperation and Development. The antitrust agencies also have long-standing cooperation agreements with Germany and Australia.

The testimony refers to the numerous benefits achieved as a result of the close working relationships that U.S. antitrust authorities have with their foreign counterparts. These benefits include ensuring that U.S. firms whose conduct is subject to review in more than one jurisdiction do not face inconsistent relief, that antitrust officials will have an easier time gathering evidence and that they will not face significant obstacles in their investigation.

Pitofsky outlined the principle of positive comity, which refers to a country's consideration of another country's request that it initiate or expand an antitrust enforcement proceeding against conduct that is harming the interests of the requesting country. According to the testimony, this principle is embodied in a 1991 antitrust enforcement cooperation agreement with the European Communities and a 1995 agreement with Canada. The agreement with the European Communities was clarified this year and the Commission believes that "the use of the agreement may result in the elimination of anticompetitive practices abroad that are injuring U.S. exporters and/or consumers without using U.S. resources. In addition, the desired results may also be accomplished without engendering complaints that have been raised in the past about the United States' assertion and exercise of extra-territorial jurisdiction and without the practical impediments that the antitrust agencies often face in conducting investigations and seeking to impose remedies beyond U.S. borders."

The Commission vote to authorize the testimony was 4-0.

Copies of the testimony are available from the FTC's web site at: http//www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. 859910)