Recent Merger Cases Demonstrate International Cooperation: Antitrust Division Official

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

At the second annual Chicago Forum on International Antitrust Issues on June 9, Rachel Brandenburger, special advisor for international matters at the Department of Justice Antitrust Division, cited four recent merger cases as examples of successful international cooperation among enforcement agencies.

The 2010 review of the Cisco/Tandberg merger was described as a model of cooperation between the United States and the European Commission (EC). In that matter, the Department of Justice Antitrust Division decided not to challenge Cisco Systems Inc.'s acquisition of videoconferencing competitor Tandberg ASA (Trade Regulation Reporter ¶50.251) based at least in part on the commitments that Cisco had made to the EC.

Brandenburger also cited the Antitrust Division’s efforts with the Canada Competition Bureau to put together an antitrust remedy for ticket seller Ticketmaster Entertainment, Inc.’s acquisition of concert promoter Live Nation, Inc. A 2010 consent decree (2010-2 Trade Cases ¶77,113) resolved U.S. antitrust concerns by ordering divestitures and behavioral restrictions. The same day the Justice Department announced its proposed relief, the Canada Competition Bureau announced that a consent agreement was filed with the Competition Tribunal to resolve that country's concerns over the combination.

The recent clearance of the acquisition of software patents and patent applications from the software company Novell Inc. by a joint venture consisting of Microsoft Inc., Oracle Inc., Apple Inc., and EMC Corp. was also discussed. In April, both the Antitrust Division and Germany’s Bundeskartellamt announced that the joint venture, CPTN, could proceed with the first phase of the acquisition after addressing competition concerns through divestitures. Brandenburger noted that the review marked the first time in 20 years that the Antitrust Division worked with Germany’s Bundeskartellamt on a merger. The close cooperation between the Antitrust Division and the Bundeskartellamt was aided by waivers from the parties that enabled the agencies to exchange otherwise confidential information.

Brandenburger also pointed to a transaction resolved just last month. In May, the Antitrust Division announced that Unilever N.V. agreed to divestitures intended to preserve competition in certain hair care product markets to resolve U.S. antitrust concerns over its proposed $3.7 billion acquisition of Alberto-Culver Company (Trade Regulation Reporter ¶50,992). In announcing the settlement, the Justice Department said that it cooperated with the United Kingdom Office of Fair Trading, the Mexico Federal Competition Commission, and South Africa's Competition Commission in conducting the investigation.

Outside the merger area, the ongoing investigation of cartel activity in the air transportation industry is an example of anti-cartel cooperation with competition authorities on five continents, according to Brandenburger.

Chicago Forum on International Issues

The Chicago Forum on International Antitrust Issues was held June 9-10 at Northwestern University School of Law. Billed as “a premier Midwest conference examining the latest developments in competition regulation around the globe,” the program featured presentations on antitrust enforcement in the U.S., Canada, Mexico, Europe, and the BRIC countries (Brazil, Russia, India, and China), among other jurisdictions.

Government speakers included FTC Commissioner William E. Kovacic and representatives from the Canada Competition Bureau and the Mexico Federal Competition Commission.

Further information regarding the annual conference is available here.

Antitrust Chief Addresses New Merger Guidelines, Global Cooperation

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

At Georgetown’s Global Antitrust Enforcement Symposium in Washington, D.C. on September 21, Assistant Attorney General Christine A. Varney, chief of the Department of Justice Antitrust Division, delivered remarks concerning international cooperation in antitrust investigation and enforcement.

Varney began by discussing the issuance of revised Horizontal Merger Guidelines by the Antitrust Division and the FTC in August 2010. While the revised Guidelines “provide transparency into the agencies’ current enforcement analysis,” they “contain no surprises,” setting forth concepts and considerations that had long been central to the agencies’ merger review and incorporating much of the Commentary the agencies issued in 2006 for the then-extant Guidelines.

The revised guidelines merely reflected a refinement in approach to merger review to incorporate advances in economic learning and changes in business realities, according to Varney.

The assistant attorney general then focused on future global enforcement, providing the historical context of international cooperation, explaining the challenges of achieving convergence with other competition agencies around the world, describing the state of cooperation at present, and offering initial thoughts on the direction that cooperation efforts should take in the coming decade and beyond.

The efforts at convergence in the past decade have been “a very positive step,” she said, because convergence reinforces international case cooperation and helps businesses operate more efficiently. However, Varney acknowledged, convergence on everything was “unlikely,” owing to the wide range of competitive landscapes found in different jurisdictions.

“The Antitrust Division has been working hard to bring greater cooperation to international cooperation enforcement by facilitating discussion of important issues,building bilateral and multilateral relationships, and learning how best to coordinate investigations and remedies in a globalized age,” according to Varney.

Within these efforts has been a “special emphasis on encouraging procedural fairness and transparency, as evidenced by the agency’s involvement in two OECD Working Party roundtables focused on those topics.

Varney cited the combination of Cisco and Tandberg as an example of the Antitrust Division taking into account remedies secured by the European Commission (EC) in closing its own investigation. She noted that the Justice Department has also enhanced its relationships with numerous other competition enforcers, including China, Russia, and the EC.

Looking toward the next decade, Varney stated that the concept of convergence should focus on substantive legal and economic analysis, rather than uniformity of processes and procedures, because of the differing legal proceedings and traditions employed by the competition regimes around the world.

She observed that convergence has already largely occurred in some areas of competition thinking—such as price fixing, market allocations,and anticompetitive horizontal mergers—but not nearly as much in the substantive analysis of unilateral conduct.

Going forward,“we must above all focus our efforts on deep and meaningful dialogue and continued cooperation on the basic principles that the competition community has already accepted,” she concluded.

The complete text of Varney’s remarks,entitled “International Cooperation: Preparing for the Future,” appear here. The remarks will be reported at CCH Trade Regulation Reporter ¶ 50,260.