On September 25, 2013, the US Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) jointly released an updated model waiver of confidentiality for use in civil matters involving non-US competition authorities. Confidentiality waivers allow for the sharing of confidential company information among the competition agencies of different countries and jurisdictions.
The revisions to the FTC/DOJ confidentiality waiver are a reflection of the growing international cooperation between US and international antitrust authorities and the desire by the US agencies to eliminate obstacles to cooperation with other antitrust authorities. In the last year alone, the FTC coordinated with 50 different international authorities on 26 antitrust investigations. The updated model waiver facilitates the granting of such waivers by clarifying how confidential and privileged information subject to the waiver will be treated, while also enabling the parties to better assess the pros and cons of granting a waiver.
Differences in Updated Confidentiality Waiver
There are several key updates to the model confidentiality waiver. First, the model waiver revises how the FTC and DOJ treat privileged information. The model waiver makes clear that the FTC and DOJ will not use the confidentiality waiver to seek information that is protected under US legal privilege rules. If the FTC and DOJ receive information from another competition authority that would be legally privileged in the United States, the agencies will treat such information as if it were inadvertently produced and will return, sequester or destroy that information in accordance with the Federal Rules of Evidence and Federal Rules of Civil Procedure. To make the privilege determinations easier, the agencies have suggested that companies clearly identify any privileged documents provided to international competition agencies.
The model waiver also makes clear that it applies to both merger and non-merger civil investigations and in matters where there is cooperation with one or more international competition authorities.
Finally, for the treatment of confidential information disclosed to non-US authorities and received by the FTC and DOJ, the model waiver provides clarity by separating such information in two sections. The waiver provides that information disclosed by the FTC and DOJ will be treated as confidential by the non-US authority in accordance with the laws of the jurisdiction in which that authority operates. The waiver further provides that any information indirectly received by the FTC and DOJ will be treated as if it were obtained directly by the FTC and DOJ, including with respect to confidentiality, destruction of documents and exemption from FOIA disclosures.
Practical Implications of Confidentiality Waivers
The FTC and DOJ believe that confidentiality waivers enable the agencies to make “more informed, consistent decisions and coordinate more effectively, often expediting the review.”1 Companies are not obligated to provide confidentiality waivers. However, without such waivers, competition agencies are limited in the amount of cooperation that they can undertake, which may impact the timing of an investigation or lead to inconsistent outcomes.
Moreover, even without a confidentiality waiver, international antitrust agencies may still share public information and “agency non-public” information, which includes the existence of an investigation and staff views on market definition, competitive effects, and remedies.
In a recent speech, FTC Chairwoman Edith Ramirez explained that there have been recent mergers in which companies have had to coordinate merger filings in more than 70 jurisdictions. The 2011 Hitachi/Western Digital transaction, for example, required coordination among 10 international agencies, a process that Chairwoman Ramirez described as “cumbersome.”2
The changes to the model waiver also provide assurances to companies regarding the treatment of their confidential information and any privileged information, in particular. Providing a confidentiality waiver may allow companies to avoid production of duplicative information. Companies also may benefit when agencies can share information and analytical insights, which may lead to more efficient settlement of investigations. On the other hand, companies should confer with counsel about the disclosure laws in relevant non-US jurisdictions before agreeing to a waiver.