Antitrust Enforcers Announce International Competition Network’s Recommended Practices

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

The heads of the federal antitrust agencies were in Kyoto, Japan, earlier this week, promoting antitrust convergence at the seventh annual International Competition Network (ICN) Conference. The ICN conference, hosted by the Japan Fair Trade Commission, was held on April 14-16, 2008.

More than 500 delegates and competition experts participated, representing more than 70 antitrust agencies from around the world, along with competition experts from international organizations and the legal, business, consumer, and academic communities.

The ICN adopted new “Recommended Practices” to improve merger analysis and assessment of unilateral conduct, according to the agencies. In addition, the ICN’s cartel working group issued a report stressing the importance of effective cartel settlement systems.

Views of U.S. Enforcers

“As competition laws continue to take root throughout the world, the international competition community faces an increasing challenge to ensure that competition agencies can develop and maintain the institutional capacity to be effective champions for consumers,” said FTC Chairman William E. Kovacic.

“The Kyoto Conference took us another big step on the long journey to building effective, pro-consumer competition agencies,” Kovacic noted. “Through its Competition Policy Implementation Working Group and other projects, the ICN is playing a leading role in bringing agencies together to share their experience to strengthen our mutual goal of combating anticompetitive practices and improving the lives of our consumers.”

Thomas O. Barnett, Assistant Attorney General in charge of the Department of Justice Antitrust Division, identified the ICN as “a leading forum for identifying best practices among antitrust enforcement agencies and promoting international convergence in antitrust enforcement." He added that the “Recommended Practices adopted at this conference are an important milestone in the ICN's efforts to develop consensus in the substantive analysis of mergers and unilateral conduct."

Merger Analysis Recommended Practices

ICN members adopted three new Recommended Practices for Merger Analysis. The new Recommended Practices for merger analysis included the concepts that:

(1) merger review analysis should provide a comprehensive framework for assessing whether a merger is likely to harm competition significantly;

(2) market shares and measures of market concentration play an important role in merger analysis but generally are not conclusive indicators that a merger is likely to harm competition significantly; and

(3) assessment of firm entry and/or expansion by existing competitors should be an integral part of the analysis of the competitive effects of a merger.

Unilateral Conduct Recommended Practices

In addition, ICN members adopted a set of Recommended Practices for review of unilateral conduct. The Recommended Practices provide that a firm should not be found to possess substantial market power without a comprehensive consideration of factors affecting competitive conditions in the market. The Recommended Practices further provide that agencies should use a sound analytical framework, firmly grounded in economic principles, in determining whether a firm has substantial market power, and that assessment of entry and expansion conditions should be an integral part of the analysis.

Announcements by the Federal Trade Commission and the Department of Justice appear here and here, respectively. Further information about the ICN can be found at the organization’s website: http://www.internationalcompetitionnetwork.org/