International Competition Network Conference Adopts Recommended Practices to Improve Merger Review Processes, Establishes Cartel Working Group

At the conclusion of the International Competition Network's (ICN) conference held in Seoul, South Korea, antitrust agencies adopted four additional Recommended Practices for merger notification procedures, designed to improve enforcement agencies' merger review processes and reduce unnecessary burdens on both agencies and merging parties, the Federal Trade Commission announced. The ICN also created a new Cartel Working Group.

At the conference, held April 21-22, 2004, senior antitrust officials from nearly 50 jurisdictions gathered to promote convergence in multijurisdictional merger review, to advance competition law enforcement in developing countries, and to examine the role of competition enforcement in regulated sectors. Representatives of antitrust agencies were joined by international organizations and more than 50 non-governmental advisors, including representatives of the legal, business, economic, consumer, and academic communities.

Timothy J. Muris, Chairman of the FTC, and R. Hewitt Pate, Assistant Attorney General in charge of the Justice Department's Antitrust Division, addressed the participants via video conference at the Seoul Competition Forum held on April 20, 2004.

"The ICN's successful third annual conference has demonstrated that the ICN continues to fulfill its promise to provide a platform for the world's competition agencies to work together in pursuit of common goals of sound competition policy and law enforcement," said Chairman Muris. "The FTC is proud to play a leadership role in the ICN, including on merger policy and on capacity-building for competition agencies in developing countries."

In October 2001, the Federal Trade Commission and the Department of Justice joined with antitrust agencies from 13 other jurisdictions around the world (Australia, Canada, the European Union, France, Germany, Israel, Italy, Japan, Korea, Mexico, South Africa, the United Kingdom, and Zambia) to create the ICN. The ICN now includes nearly 90 member agencies from nearly 80 jurisdictions. The ICN has two main goals: 1) to provide support for new antitrust agencies both in enforcing their laws and in building strong competition cultures in their countries, and 2) to promote greater procedural and substantive convergence among antitrust authorities based on sound competition principles.

The conference focused on the recent work of three ICN working groups: the Merger, Capacity Building and Competition Policy Implementation, and Antitrust Enforcement in Regulated Sectors Working Groups. In addition to presenting its ongoing work, the ICN established a new Cartel Working Group. This new working group will contribute to the ICN's mission of assisting member agencies in providing more effective antitrust enforcement on behalf of the consumers they serve.

After reviewing the work of the Merger Notification and Procedure subgroup, chaired by Randolph W. Tritell, FTC Assistant Director for International Antitrust, ICN members adopted four new Recommended Practices. The new Recommended Practices address:

• Conduct of Merger Investigations. The conduct of merger investigations should promote an effective, efficient, transparent, and predictable merger review process. Agencies should include opportunities for discussions between the agency and merging parties; provide merging parties with an explanation of competitive concerns; where appropriate, adopt procedures to ensure that the investigation is completed without undue delay; avoid imposing unnecessary costs and burdens on merging parties and third parties; and comply with applicable legal privileges and confidentiality practices.
  
  
• Procedural Fairness. Procedural fairness should be afforded to merging parties and third parties with a legitimate interest in the merger. Agencies should provide merging parties with sufficient and timely information on the competitive concerns that form the basis for a proposed adverse decision, parties should be given the opportunity to respond to such concerns, third parties should be allowed to express their views, and there should be an opportunity for timely review of agency decisions.
  
  
• Confidentiality. Confidential information received during a merger investigation should be subject to appropriate confidentiality protections. Agencies should promote transparency of their confidentiality laws and practices and avoid unnecessary public disclosure of confidential information in public announcements and legal proceedings.
  
  
• Interagency Coordination. Competition agencies should seek to coordinate reviews that raise competitive issues of common concern. Agencies should encourage merging party cooperation and seek to avoid inconsistency with remedies in other reviewing jurisdictions.

"The implementation by many ICN members of the Recommended Practices for Merger Notification Procedures shows that the ICN's work has already become a benchmark for the design of merger review laws, strengthening both the effectiveness and efficiency of the multi-jurisdictional merger review system," Tritell said.

The ICN members previously adopted eight Guiding Principles and seven Recommended Practices. The Principles and Practices are non-binding, and governments are implementing them voluntarily, as appropriate. Over the past year, ICN has focused on member implementation of its recommendations, including an assessment of its efforts at the Seoul conference. The Merger Working Group also presented detailed papers focused on improving investigative techniques, and the ICN approved future analytical framework subgroup work on merger guidelines and remedies.

Antitrust officials at the conference also discussed antitrust enforcement in regulated industries such as telecommunications, electricity, and banking. The Antitrust Enforcement in Regulated Sectors Working Group presented a comprehensive work based on contributions from participating members on the effects regulation can have on the application of antitrust law, antitrust enforcement experiences in regulated sectors, and the interaction between antitrust authorities and regulatory agencies. Through examples of day-to-day interaction on specific cases, the report demonstrated the need for cooperation between antitrust agencies and regulators when their enforcement responsibilities may overlap.

The Competition Policy Implementation Working Group addressed ICN initiatives to assist new antitrust agencies in developing economies. The Group's work presented at Seoul included a report of successful case studies aimed at improving the effectiveness of competition advocacy in developing and transition economies and a methodology for examining ways to enhance the stature of competition authorities with consumers. Results from a workshop in Paris in February of this year that brought together donors and recipients identified means of strengthening cooperation between the two. Finally, an FTC-led subgroup began an in-depth analysis of what works well and what does not in the delivery of technical assistance to improve the effectiveness of technical assistance in support of an agency's enforcement actions and advocacy initiatives.

"We are making substantial progress in two important areas: creating a comprehensive database of past and future technical assistance projects for competition policy, and preparing to conduct in-depth interviews with new competition agencies to identify what forms of technical assistance actually improve institutional capability and strengthen performance," said William Kovacic, FTC General Counsel.

All ICN documents are available at www.internationalcompetitionnetwork.org.

The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws, which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.