IS THERE TOO MUCH TRAFFIC ON THE COMPETITION LAW ENFORCEMENT AUTOSTRADA: A ROLE FOR NEGATIVE COMITY? Terry Calvani* & Justin Stewart-Teitelbaum** In 1990, when one of the authors departed from the United States Federal Trade Commission (“USFTC”), American competition enforcement agencies investigated matters that were almost entirely domestic. The same was true of foreign competition enforcement agencies: the Americans investigated American matters; the Germans investigated German matters. There were few, if any, multijurisdictional pre-merger notification filings; there were no international cartel investigations. Moreover, there was little professional contact among enforcement officials except for the annual Fordham Conference, periodic United Nations Conference on Trade and Development (“UNCTAD”) competition meetings, and the Paris meetings of the Organization for Economic Cooperation and Development (“OECD”) (for those few countries that were members). While a good number of countries had competition laws and agencies to enforce them, antitrust was largely an American enterprise. The antitrust enforcement autostrada was a relatively open road with room to cruise. * Of Counsel, Freshfields Bruckhaus Deringer US LLP; Lecturer in Law, Columbia University School of Law; formerly Commissioner of the United States Federal Trade Commission and Member (of the Board) of the Irish Competition Authority (holding criminal cartel portfolio). ** Senior Associate, Freshfields Bruckhaus Deringer US LLP. The authors would like to thank Sarah Melanson for her devoted assistance on this paper. The authors would also like to sincerely thank our colleagues at the Federal Trade Commission (Don Clark, Randy Tritell, and Russ Damtoft); the Australian Competition Commission (Marcus Bezzi, Nicholas Heys, Shannan Harrigan, Rami Greiss, and Suzie Copley); the Canada Competition Bureau (Dan Wilcock, Sultana Bennett, Dave Harding, David Wolinsky, and Leila Wright); and Margaux Dastugue and Charles Ramsey of Freshfields Bruckhaus Deringer US LLP for their time and input into this paper. Illustration of Jurisdictions with Competition Laws in 1990 In 2013, when the second author departed from the USFTC, many more countries had antitrust laws and agencies to enforce them. It was no longer an American game. The work had changed too. A very large number of mergers and acquisitions involved review by multiple competition law enforcement agencies and most significant cartel investigations were transnational. The world of competition law had changed and done so dramatically. Illustration of Jurisdictions with Competition Laws in 2013 Today it is not unusual to have a single merger reviewed by some 20 or more agencies. Similarly, the same cartel is often investigated by a large number of competition authorities. Using the analogy of the article’s title, today the competition autostrada is crowded with enforcement vehicles. With that increase in traffic, the opportunities for accidents, pile-ups, and other mishaps has increased. While the traffic is not yet to the point of crisis, is it now time for the international enforcement community to re-consider voluntary norms to assist enforcement agencies in deciding whether it is appropriate to investigate a particular matter? Are there cases where jurisdiction ought not to be exercised? Cases where another agency is best placed to investigate and where the interests of the other jurisdiction are nonetheless protected? We seek to explore these and related issues here. Consider the following cartel matter: The United States Department of Justice (“USDOJ”) is investigating a cartel where the undertaking made sales of the cartelized product from its plants in the United Kingdom to both Brazil and Libya. Assessing the volume of commerce for purposes of determining the penalty, the USDOJ includes sales made by the British company to its customers in Brazil and Libya. When questioned about the interest of the United States in those foreign sales, the USDOJ attorneys respond that invoices for those sales were mailed to an address inside the United States, and that is sufficient to vest the United States with jurisdiction. Indeed, they assert that the United States could properly exercise jurisdiction even if the use of a United States financial intermediary to make payment was the only nexus to the United States.1 Assuming arguendo that the United States could properly assert jurisdiction, the question we seek to address is whether it ought to do so. This question becomes ever more important as additional enforcement agencies investigate the very same matters on the very same autostrada. Background These issues are not new. Although competition law convergence and agency cooperation were first mentioned in the negotiation of the restrictive trade practices provisions of the ill- fated Havana Charter in 1948,2 real interest surfaced when the late Lord Leon Brittan, then Commissioner of the European Union for competition, called for an effort to secure more convergence and cooperation at the Cartel Conference Reception hosted by the Bundeskartellamt at Sans Souci Palace in Berlin in 1990.3 Although the United States was initially unenthusiastic,4 the Attorney General’s International Competition Policy Advisory 1 The matter is not hypothetical. The same issues arise in a merger context as the following non-hypothetical demonstrates. Country X asserts jurisdiction to review the sale of a radio station located in Nevada – by its Boston-based newspaper parent company – in a transaction with the parent company of a Chicago newspaper, despite the fact that the radio station in question broadcasts only in the U.S. state of Nevada. Again assuming jurisdiction predicated on the sale of Chicago- and Boston-owned newspapers in Country X (rather than radio services), should the competition authority of Country X exercise jurisdiction in this case? 2 Final Act of the UN Conference on Trade & Employment, Havana Charter for an International Trade Organization (1948). See The Havana Charter for an International Trade Organization: An Informal Summary, World Trade Org. (Jan. 1, 1953), https://docs.wto.org/gattdocs/q/.%5CGG%5CSEC%5C53-41.PDF. 3 See generally T. Calvani, Devolution & Convergence, 2003 E.C.L.R. 415. 4 See Address of Assistant Attorney General Joel Klein, Cartel Conference, Berlin, May 9, 1999. The United States consistently opposed recommendations for greater convergence, fearing that it risked producing a “race to the bottom” for competition law enforcement regimes. See also Address of Assistant Attorney General Joel Klein, “A Reality Check on Antitrust Rules in the World Trade Organization, and A Practical Way Forward on International Antitrust,” OECD Conf. on Trade & Competition, Paris, June 30, 1999. Others within the U.S. enforcement community echoed these sentiments. See, e.g., Address of USFTC Commissioner Orson Swindle before the 8th World Business Dialogue, “Between Competition & Cooperation – Changing Business- to-Business Relations,” Cologne, April 4, 2001. Committee took up the issue and made a similar recommendation.5 The International Competition Network (“ICN”) was born on October 25, 2001.6 It has been spectacularly successful.7 With the growth of the international enforcement community, serious discussion of negative comity8 soon followed. The United States Antitrust Modernization Commission (“AMC”) took up the issue in its 2007 Report.9 Early in its deliberations, a group of four distinguished competition lawyers, James Atwood, Calvin Goldman, Ilene Knable Gotts, and Robert Pitofsky,10 5 International Competition Policy Advisory Committee, Final Report, Ch. 6 (2000) (“...the Advisory Committee recommends that the United States explore the scope for collaborations among interested governments and international organizations to create a new venue where government officials, as well as private firms, nongovernmental organizations (NGOs), and others can consult on matters of competition law and policy. The Advisory Committee calls this the ‘Global Competition Initiative.’”). 6 The ICN provides opportunities for national and multinational antitrust authorities to cooperate through working groups and conferences, seek consensus on best practices, and advance toward policy convergence. The ICN does not exercise any rulemaking function, but allows representatives of established and newcomer agencies to learn from each other. See http://www.internationalcompetitionnetwork.org; see also generally, M. Coppola, One Network’s Effect: The Rise and Future of the ICN, 3 Concurrences 222-229 (2011); M. Coppola & C. Lagdameo, Taking Stock and Taking Root: A Closer Look at Implementation of the ICN Recommended Practices For Merger Notifications & Review Procedures, The International Competition Network at Ten, Origins, Accomplishments and Aspirations 297-319 (2011). 7 Coppola, One Network’s Effect, supra note 6; Coppola & Lagdameo, supra note 6. 8 The United States Supreme Court has defined comity as: “the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113, 164 (1895). So-called “negative comity” applies this same principle, but rather utilizes a deferral of enforcement based on action taken outside a particular jurisdiction, which ultimately can have the same