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A top U.S. Department of Justice official said last week the United States might be willing to defer to foreign regulators on some multi-national mergers. Historically, the U.S. has steadfastly refused to concede its jurisdiction over mergers involving companies or assets based here. But remarks by A. Douglas Melamed appear to represent a departure from that long-held stance. Melamed, acting assistant attorney general for antitrust at the Justice Department, said creating a global competition forum for regulators would increase cooperation and trust among antitrust agencies worldwide. That, in turn, could let the U.S. defer to foreign regulators on some antitrust issue, he said at a forum sponsored by Fordham University’s law school in New York. “If in the future we can safely conclude that deferring to another antitrust agency on a matter particularly within its jurisdiction would not sacrifice our own legitimate sovereign interests, then antitrust agencies, consumers, and businesses alike will be able to benefit from more efficient international antitrust enforcement,” he said. Melamed’s comments come about a month after Joel Klein, the Justice Department’s top antitrust cop until he left the agency on Sept. 30, earned headlines by proposing a global competition forum. Lawson Hunter, a partner in the Toronto law firm of Strikeman Elliott, said the U.S. must act rather than talk about increased cooperation. He urged U.S. regulators to begin deferring to decisions by European Commission and other foreign antitrust regulators. “That would be an important recognition of your seriousness here,” he said at the forum. While Melamed opened the door to some internationalization of antitrust policy, he continued to object to giving the World Trade Organization a role on competition matters. As proposed by the European Union, Japan and Canada, countries would devise a binding WTO antitrust code. Melamed said this would not work because the WTO rule would be too inflexible for this rapidly changing economy. It also is premature because there is not yet a global “culture of competition” where countries share views on competition policy. Greater international cooperation is necessary because there are 60,000 multinational companies. Antitrust laws now exist in 90 countries, and 20 more are developing competition codes, he said. About 60 countries have pre-merger notification requirements similar to the process in the U.S. under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, he said. “We need to ensure that antitrust works effectively and efficiently in the global economy,” Melamed said. “Enforcement coherence cannot be defined and decreed once and for all by the U.S. or anyone else. Rather it must come from a shared understanding by antitrust enforcers.” The best forum to bolster cooperation would be to create a Global Competition Initiative, he said. The group would have a small permanent staff and could be housed as part of another multi-national agency such as the World Bank, he added. “The GCI would be a forum for study, evaluation, and recommendation,” he said. “It could provide a mechanism for peer review and could work to encourage a consensus for action.” The GCI would establish working groups to debate analytical and procedural approaches to antitrust, he said. The product of those debates could be debated by the entire GCI and eventually lead to a convergence of thinking on antitrust. “The result of this would not be formal, binding rules, but rather a generally increased substantive or procedural coherence,” Melamed said. Melamed said the U.S. will continue to negotiate bi-lateral antitrust agreements with foreign governments similar to ones signed by the EC, Canada, and Japan. But he said this won’t solve the problem because there are more than 90 antitrust regimes. Another avenue is the Organization for Economic Cooperation and Development, he said. While the group has done useful work on telecommunications reform and other topics, its membership is too narrow to address international antitrust enforcement, he said. Copyright (c)2000 TDD, LLC. All rights reserved.

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