The volume and depth of cross-border cooperation between competition authorities is increasing, according to American Bar Association research. Greater collaboration between regulators has occurred as issues have become increasingly complex and multi-jurisdictional in nature.
This highlights the need for multinational companies to take a global approach to competition issues, including mergers and antitrust compliance. In turn, this requires careful coordination between competition advisors around the world – whether in the same firm or different firms.
This article provides an overview of our experience with competition regulators in each of Australia, China, Europe and Hong Kong, including:
- each regulator’s general approach;
- examples of matters involving cooperation with other jurisdictions; and
- information sharing considerations.
The Australian Competition and Consumer Commission (“ACCC”) regularly engages and exchanges information with regulators in other jurisdictions on a range of matters. According to the ACCC’s quarterly updates, in 2015 the ACCC exchanged information with overseas agencies on approximately 175 occasions, including with China, the European Union and United States (see further in Table 1 below).
Greater collaboration has cost and benefits. One benefit may be that collaboration results in a more harmonised approach which ultimately creates some level of efficiencies. For example, the ACCC stated that its marine hoses cartel investigation was “greatly assisted by both the United States Department of Justice and the United Kingdom [competition authority]”. More recently, the ACCC “worked closely” with the United States Department of Justice and Competition Commission of Singapore, in relation to its review of the Tullett Prebon-ICAP transaction. However, in some cases, greater collaboration may slow down the decision-making process, thereby increasing transaction costs for clients.
There are a number of mechanisms which bolster cooperation between the ACCC and overseas regulators, including:
- bilateral co-operation arrangements – including with the European Union, Canada, Korea and China;
- multi-agency arrangements; and
- inter-agency meetings, workshops, conferences (including the annual meeting of the International Competition Network) and secondments.
Australia’s competition Act, the Competition and Consumer Act 2010 (Cth), provides a framework for safeguarding confidential information the ACCC receives. This framework allows the ACCC to disclose confidential information to a “foreign government body” (e.g. an overseas regulator) in limited circumstances.
However, in our experience, the ACCC prefers to exchange information with other regulators by way of bilateral waivers obtained from parties. This is because accepting waivers does not require the ACCC to make an “administrative decision” supported by written reasons and which may be subject to judicial review. The ACCC has a standard form waiver which it does not negotiate.
Table 1 – overseas information requests made by, or made to, the ACCC in 2015
|Quarter||Requests made by the ACCC||Agency location includes||Requests made to the ACCC||Agency location includes|
|1 Jan to 31 Mar 2015||13||Italy, Japan, UK, Papua New Guinea, Canada, New Zealand, Germany, Brazil, USA and Korea||20||Singapore, New Zealand, South Africa, Thailand, UK, Pakistan, Seychelles, Colombia, Canada, EU and Israel|
|1 April to 30 June 2015||26||Brazil, Canada, EU, Germany, Italy, New Zealand, Norway, Sweden, UK and the USA||23||Armenia, Botswana, Canada, EU, France, Hong Kong, Japan, Malaysia, Mexico, South Africa and Uganda|
|1 July to 30 Sept 2015||22||EU, Germany, India, Korea, Netherlands, New Zealand, Poland, Singapore, South Africa and USA||24||Brazil, Canada, El Salvador, EU, Hungary, Ireland, Mexico, New Zealand, Singapore, Taiwan and USA|
|1 Oct to 31 Dec 2015||20||Brazil, Canada, France, EU, Germany, New Zealand, Taiwan, UK and USA||27||Brazil, Canada, China, EU, Japan, New Zealand, Panama, the Philippines, Singapore, UK and USA|
China’s Anti-monopoly Law (“AML”) took effect on August 1, 2008. The AML enforcement power is shared by three agencies, the Ministry of Commerce (“MOFCOM”), the National Development and Reform Commission (“NDRC”) and the State Administration for Industry and Commerce (“SAIC”), among which MOFCOM is responsible for merger control, the NDRC is responsible for regulating price related monopoly conduct and the SAIC is responsible for non-price related monopoly conduct.
Up to the present, the three agencies have jointly and independently signed Memorandums of Understanding with counterparts in several jurisdictions, including Australia, Canada, EU, US, UK, Japan, Korea, the other three BRIC countries, etc. Particularly, according to the officials of MOFCOM and SAIC speaking at 2016 ABA Asia Forum held in Hong Kong, China maintains a regular dialogue mechanism with EU and US, and the competition authorities in BRICs have also set up an exchange mechanism to meet every two years.
Generally speaking, China’s AML enforcement agencies cooperate with their overseas counterparts in the following main aspects:
- exchange of views on competition policies;
- exchange of experiences on the antitrust enforcement activities; and
- exchange of views with respect to multilateral competition initiatives.
The competition authorities will share non-confidential information with each other pursuant to their obligation under their domestic laws and regulations. Meantime, the authorities may ask the relevant party for waivers which allow the information to be exchanged. Notably, in Thermo Fisher/Life Technologies case, Thermo Fisher Scientific and Life Technologies voluntarily gave a waiver to MOFCOM and allowed it to exchange deal details with other jurisdictions during its review. It was understood that such waiver helped the companies to obtain conditional clearance sooner than expected.
According to NDRC, China intends to further expand and deepen the international cooperation and to improve the effects of cooperation on the basis of mutual respect and trust. It is worth noting that during the Qualcomm investigation, NDRC and Korea Fair Trade Commission (KFTC) met in May and June 2014 and had discussions with each other to share notes in relation to their investigations into the telecommunication giant.
In the EU, the European Commission (the “EC”) enforces competition law together with the national competition authorities of the EU Member States (the "NCAs"). In general, cases may be dealt with by a single NCA (possibly with the assistance of other NCAs), by several NCAs acting in parallel, or by the EC. In certain circumstances the EC can take over a case started by one or more NCAs (as with the E-Books investigations).
In relation to antitrust investigations, the EC and the NCAs cooperate with each other through the European Competition Network (the "ECN”). The members of the ECN inform each other of new cases and envisaged infringement decisions as well as coordinating and assisting each other, where necessary. In 2015 alone, the ECN was informed of nearly 200 antitrust cases where investigations were started by either an NCA or the EC.
In relation to merger control, the members of the ECN also cooperate and exchange best practices through the EU Merger Working Group.
As noted elsewhere in this article, the EC also frequently cooperates with various competition authorities in non-EU jurisdictions (e.g. antitrust investigations into the car parts sector and merger inquiries such as the abandoned Halliburton/ Baker Hughes transaction).
In addition to formal agreements with non-EU competition authorities (such as the recent agreement between the EC and the Swiss Competition Commission in respect of antitrust matters) and membership of the International Competition Network, competition authorities in the EU also cooperate with non-EU competition authorities on the basis of confidentiality waivers provided by the parties to an antitrust investigation or merger inquiry.
In practice, cross-border coordination often has an impact on the timing of, and approach to, competition authority investigations. For example, dawn raids are likely to take place simultaneously in various jurisdictions to avoid companies tipping off other companies (both within the same corporate group and competitors). Similarly, whilst co-operation between competition authorities in merger inquiries can streamline the process, it is important to ensure that substantive and procedural differences in each jurisdiction are correctly assessed and managed to ensure a successful outcome in each jurisdiction.
At a recent conference, the EU competition commissioner Margrethe Vestager highlighted the importance of international cooperation in antitrust, merger and policy work. In the context of considering the "world of global business", she referred to the following “secret weapon”:
“It’s the fact that we work together. And this is not a luxury. It’s essential. A commitment to competition enforcement at home is no longer enough. We need cooperation and enforcement on a global scale."
Hong Kong’s competition law came into full effect in December 2015. Since then, the Competition Commission has received more than 1,000 complaints of anti-competitive conduct. The Commission has said it will pursue international cartels if evidence is forthcoming.
“The international nature of Hong Kong’s economy makes it necessary for us to take a wider international perspective in our enforcement strategy,” Commission chairwoman Anna Wong said in October 2015. “To be effective, we must engage with reality and international cooperation becomes essential.”
As a latecomer to competition law, the Commission aims to leverage off the experiences of other jurisdictions. It has hired key executives from the ACCC and sent staff on secondment to overseas regulators to gain experience on cartel investigations.
Hong Kong’s substantive law largely mirrors EU competition law and its enforcement regime follows the Australian approach. The commonality in the law is likely to facilitate international cooperation.
The Commission may share non-confidential information with its overseas counterparts. It may also share confidential information in limited circumstances. Under the Commission’s leniency policy, leniency applicants may be required to sign a waiver authorising the Commission to exchange confidential information with overseas regulators.