On 27 July 2011 the U.S. Department of Justice Antitrust Division (DOJ) and the Federal Trade Commission (FTC) signed a memorandum of understanding (MoU) with China's three antitrust enforcement agencies – the Ministry of Commerce (MOFCOM), the National Development and Reform Commission (NDRC), and the State Administration for Industry and Commerce (SAIC).
The MoU is intended to promote communication and cooperation on antitrust issues among the agencies in the two countries. It provides for cooperation on two levels: country-to-country (with all five agencies participating) and agency-to-agency. In addition, the MoU outlines several specific areas for cooperation such as:
- information exchange and advice about enforcement and policy developments;
- trainings, workshops, etc.;
- feedback on proposed laws, regulations and guidelines; and
- cooperation on specific cases or investigations.
The MoU's significance
The signing of the MoU illustrates the importance that the U.S. antitrust authorities attach to Chinese antitrust developments and, to a certain extent, entails recognition of the Chinese antitrust agencies' increasing sophistication. In the words of FTC Chairman Jon Leibowitz, the Chinese antitrust agencies "have risen in prominence and have quickly developed many of the important analytical techniques used by leading antitrust agencies around the world." In a way, the MoU thus leaves a distinct mark in Chinese antitrust history, just a few days ahead of the third anniversary of the entry into force of China's Anti-Monopoly Law (AML) on 1 August.
From the business side, the key issue will be when, and how closely, U.S. and Chinese antitrust agencies cooperate in individual cases and how much case-specific information is exchanged between them.
While leaving their extent and limits open, the MoU states that the information exchanges must comply with domestic law. This means that, in the short term, the agencies could exchange information only with the consent of the parties involved. However, the MoU press release also speaks, somewhat ambiguously, of "[c]ooperation on specific cases or investigations, when in the investigating agencies' common interest." Further, the MoU's preamble informs that the U.S. and Chinese antitrust agencies envisage to set up a "long-term cooperation" and, in the signing ceremony, DOJ Assistant Attorney General Christine Varney pointed out that the MoU was just a "first step" for U.S.-China antitrust cooperation. Hence, even though facing the possibility of case-specific information flows between agencies across the Pacific only in the longer term, the MoU has the potential to make companies re-think their strategies for cases with simultaneous procedures before the U.S. and Chinese antitrust agencies.