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“Issues raised by the proliferation of merger control laws are at the cutting edge of economic globalization. The marked increase in the number of jurisdictions that have adopted merger review regimes makes it increasingly likely that international mergers and acquisitions will be reviewed by multiple competition authorities. The substantive standards contained in the competition laws and regulation of nations differ, reflecting divergent policy goals. Such differences, especially when coupled with the significant extraterritorial reach of many merger control laws, present challenges both for the merging parties and for reviewing antitrust authorities.” [FOOTNOTE 1] Written three years ago by the International Competition Policy Advisory Committee to the Attorney General (ICPAC), these words ring even more true today. With close to a hundred antitrust regimes worldwide [FOOTNOTE 2]– most emerging in the 1990s [FOOTNOTE 3]– and over 60 jurisdictions equipped with merger notification requirements, [FOOTNOTE 4]merger enforcement has never been so prevalent. Indeed, the explosive growth of merger control regimes around the world, coupled with the costs and complexity faced by the parties to multijurisdictional mergers, is by now “an acknowledged fact.” [FOOTNOTE 5] THE CHALLENGES The proliferation of merger control agencies has presented parties to multijurisdictional mergers with some unprecedented multitasking. Parties incur additional, direct and indirect costs to determine whether notification is required — and if so, in what form — in any given jurisdiction. Commentators have observed that in many instances unnecessary costs and burdens are being imposed on the parties, in particular when the transaction raises no anticompetitive concerns. These include: costs associated with assessing notification requirements where the applicable notification thresholds are imprecise, or based on subjective factors; costs resulting from complying with notification requirements when the transaction at bar lacks any appreciable nexus to the jurisdictions concerned; and costs arising from unduly burdensome filing requirements, including translation requirements and formalistic procedural requirements (e.g., apostille requirements, certified copies of corporate documentation, etc.). [FOOTNOTE 6]In addition, the costs of delay, due to filing or review period requirements, while harder to quantify, are also sure to significantly increase transaction costs. [FOOTNOTE 7] Antitrust authorities reviewing multijurisdictional transactions confront equally significant challenges. The main problem lies in what Professor Eleanor Fox aptly labeled “the imperfect fit” between national antitrust law and world markets. [FOOTNOTE 8]Thus, in a growing number of cases, regulatory agencies investigate merging firms whose assets are located outside the jurisdiction. Witnesses, as well as essential documents, may also be out of reach. The notion that a particular agency is not the only one to review the merger may complicate matters even further. Individual agencies may fear that relative to other agencies’ actions, the remedies it considers would be over inclusive. Similarly, agencies may be averse to the imposition of inconsistent, or even conflicting, sanctions in a given transaction. Overall, faced with growing conditions of uncertainty, a single agency may be more susceptible to act in a less-than-optimal manner when reviewing a multijurisdictional merger. [FOOTNOTE 9] THE RESPONSES Presented with these challenges, a consensus is emerging among international antitrust experts that a greater degree of cooperation, as well as the convergence of enforcement policies among the multiple merger regimes, is required. The ICPAC Report, considering these issues in great length, [FOOTNOTE 10]ultimately recommends the creation of a new Global Competition Initiative, which would provide “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.” [FOOTNOTE 11]Following ICPAC and building on its solid premise, a series of thoughtful private-sector papers continued and refined the discussion. In the “Four Firms” paper, a group of international lawyers began to develop concrete proposals for streamlining the different merger review processes and enhancing their effectiveness. [FOOTNOTE 12]The “BIAC/ICC” paper, published a month later in October 2001, contained a more elaborate discussion — and some detailed recommendations — regarding issues ranging from the timing of the review to exchange of confidential information. [FOOTNOTE 13]Finally, the ABA added its own ingredient to the mix, submitting a thorough paper assessing the BIAC/ICC paper and commenting on other issues relating to merger review. [FOOTNOTE 14] Responses were equally enthusiastic on the government side. The then European Union (EU) Director General for Competition noted that, “[i]ndeed, it is clear that extensive co-operation between competition agencies has become a crucial aspect of the regulatory scrutiny of large global transactions.” [FOOTNOTE 15]Charles James, the then-assistant attorney general for antitrust, agreed: “The proliferation of antitrust enforcement regimes and the attendant risk of divergent outcomes has made cooperation among the world’s antitrust an absolute necessity.” [FOOTNOTE 16]It was time to move on. THE INTERNATIONAL COMPETITION NETWORK The International Competition Network (ICN) was launched on Oct. 25, 2001. Fourteen agencies were included, and Konrad von-Finckenstein, commissioner of the Canadian Competition Bureau, was nominated as the first chair of the steering committee. [FOOTNOTE 17]The Merger Working Group — the main of the newly created five working groups — was divided into three subgroups: analytical framework of merger review; investigative techniques; and merger notification and procedures. By the time of its inaugural conference in Naples, Italy, on Sept. 28, 2002, the ICN had already 75 member agencies from 65 jurisdictions on board, 59 of which attended the conference. More importantly, during its short existence, the ICN had produced an impressive body of work product. [FOOTNOTE 18]In particular, the merger notification and procedures subgroup issued two papers: “Guiding Principles for Merger Notification and Review,” and “Recommended Practices for Merger Notification Procedure.” In accordance with the ICN’s creed, the eight Guiding Principles for Merger Notification, [FOOTNOTE 19]as their name suggests, are nonbinding; they were left for the governments and agencies to implement. Being the first agreed-upon principles set by this distinguished multinational body, however, these principles carry weight ipso facto and should be treated accordingly. The eight principles can be divided into two groups: internal and external. The internal group of principles includes transparency, procedural fairness, efficient, timely and effective review, and protection of confidential information. These principles are aimed at framing the proper relationships between the reviewing regulatory agency and the merging firms. The external group of principles includes sovereignty, nondiscrimination on the basis of nationality, coordination and convergence. These principles set the stage for a proper relationships between the different regulatory agencies. A word about convergence, the last of the external principles — it reads: “Jurisdictions should seek convergence of merger review processes toward agreed best practices.” Indeed, since the inception of the ICN, “convergence of international antitrust law has become the Holy Grail of antitrust enforcement.” [FOOTNOTE 20]However, as Commissioner Mario Monti rightly observed, convergence “does not mean that all of our merger control regimes should necessarily be identical: that would be neither realistic nor even desirable.” Rather, it is “a shared view of why we need merger control and of the extent to which it is appropriate for us — as the guardians of our citizens’ interests — to intervene, however exceptionally, in the freedom of firms to engage in commercial transaction.” [FOOTNOTE 21] In addition to the guiding principles, the ICN has issued three recommended practices for merger notification procedures. [FOOTNOTE 22]Heavily influenced in form by the ALI Restatement of the Law, these detailed recommendations and the comments attached to them respond directly to some of the challenges presented by the ICPAC Report. Thus, the first recommended practice discusses the proper nexus between the merging firm and the reviewing jurisdiction. The second deals with notification thresholds and the need for using objectively quantifiable criteria. The third, timing of notification, discusses the desired flexibility of triggering events, including the notions of “good faith intent” upon which parties may file, and the economic incentives, rather than rigid imposed deadlines, that should guide the parties in their reporting schedules. Since its launch, the ICN has almost gained the status of a household name in the field of international antitrust. Conferences designate special sessions to discuss its work product. New merger-control regimes are devised, [FOOTNOTE 23]as other agencies keep joining the ICN, bringing it ever closer to its ambitious “all-inclusive” benchmark. [FOOTNOTE 24]The EU commission has recently recognized its work-product by citing �III of the recommended practices as a basis for its proposal to render the notification timing more flexible. [FOOTNOTE 25]And a new generation of American officials has assured that there will be “no diminution of effort” in continuing to support the ICN. [FOOTNOTE 26] From a private sector standpoint, it appears that NGAs — Non-Governmental Advisers — have played their role well in the ICN. Contributing both their ideas and drafting skills, private sector representatives facilitated the ICN’s work product and today are generally regarded as having an “important presence” in all of ICN’s activities. [FOOTNOTE 27] With its second annual meeting scheduled for June in Mexico, the ICN now stands on the verge of its first changing of the guard. There is every reason to believe that the next generation of ICN leaders will follow the balanced approach of their predecessors. The ICN’s momentum to date coupled with the new leadership’s anticipated added energy will surely advance the ICN’s impressive progress. Neal R. Stoll and Shepard Goldfein are partners at Skadden, Arps, Slate, Meagher & Flom ( www.skadden.com). Doron M. Kalir, an associate of the firm, assisted in the preparation of this article. If you are interested in submitting an article to law.com, please click herefor our submission guidelines. ::::FOOTNOTES:::: FN 1INTERNATIONAL COMPETITION POLICY ADVISORY COMMITTEE TO THE ATTORNEY GENERAL AND ASSISTANT ATTORNEY GENERAL FOR ANTITRUST, FINAL REPORT 41 (2000), available at http://usdoj.gov/atr/icpac/(hereinafter ICPAC Report) FN 2Terry Calvani, “Devolution & Convergence in Competition Enforcement,” 1 in ABA SECTION OF ANTITRUST LAW, FORUM ON INTERNATIONAL COMPETITION LAW: HANDS ON ANTITRUST HEAVEN (Feb.6-7, 2003); Konrad von-Finckenstein, ICN Roundtable, 17 ANTITRUST 35 (Fall, 2002). FN 3ICPAC REPORT, at 33. FN 4Marian R. Bruno, Hart-Scott-Rodino At 25, at 4 (Address delivered June 13, 2002), available at http://www.ftc.gov/speeches/other/brunohsr25.htm FN 5J. William Rowley and Mark Opashinov, The Internationalism of Merger Review: Toward Global Solutions, in MERGER CONTROL 2003, at 3 (2002). FN 6 Id.at 4-5. FN 7International Competition Network (ICN) – Notification and Procedures Subgroup of the Merger Working Group, REPORT ON THE COSTS AND BURDENS OF MULTIJURISDICTIONAL MERGER REVIEW, at 4 (Sept. 2002) FN 8Eleanor M. Fox, International Antitrust and the Doha Dome, at 1; in THE 2003 ANTITRUST CONFERENCE: ANTITRUST ISSUES IN TODAY’S ECONOMY (March 18-19, 2003). FN 9ICPAC REPORT, at 41. FN 10 Id.at 41-162. FN 11 Id.at 281-2. FN 12Janet L. McDavid et al., BEST PRACTICES FOR THE REVIEW OF INTERNATIONAL MERGERS, 1 (September 2001). FN 13The Business Industry Advisory Committee to the OECD (BIAC) and the International Chamber of Commerce (ICC), RECOMMENDED FRAMEWORK FOR BEST PRACTICES IN INTERNATIONAL MERGER CONTROL PROCEDURES (October 2001). FN 14JOINT COMMENTS OF THE AMERICAN BAR ASSOCIATION’S SECTION OF ANTITRUST LAW AND SECTION OF INTERNATIONAL LAW AND PRACTICE TO THE INTERNATIONAL COMPETITION NETWORK WORKING GROUP ON MERGERS (February 2002), available at http://www.abanet.org/antitrust/commentsicn.html FN 15Alexander Schaub, “Assessing International Mergers: The Commission’s Approach” (Address delivered Sept.15, 2000), available at http://europa.eu.int/comm/competition/speeches/text/sp2000_015_en.html FN 16Charles A. James, “Reconciling Divergent Enforcement Policies: Where Do We Go From Here?,” 3 (Address delivered Oct. 25, 2001), available at http://www.usdoj.gov/atr/public/speeches/9395.htm FN 17U.S. and Foreign Antitrust Officials Launch International Competition Network, (Oct. 25, 2001) FN 18For a detailed account, seeEleanor M. Fox, “A Report on the First Annual Conference of The International Competition Network,” available at http://www.internationalcompetitionnetwork.org/icn_naples_report_12-09-02_final.doc FN 19Available at http://www.internationalcompetitionnetwork.org/icn_np_working_group_guiding_principles.pdf FN 20Kevin J. O’Connor, Federalist Lessons for International Antitrust Convergence, 70 ANTITRUST L.J. 413, 417 (2002). FN 21Mario Monti, “Introduction: Analytical Framework of Merger Review, in ICN Inaugural Conference,” available at http://www.internationalcompetitionnetwork.org/speech_mmonti.pdf FN 22Available at http://www.internationalcompetitionnetwork.org/practices.pdf FN 23Indian Parliament Passes New Antitrust Legislation, 84 ANTITRUST & TRADE REG. REP. (BNA) 22 (Jan. 10, 2003). FN 24Konrad von-Finckenstein, “Recent Developments in the ICN,” (Address delivered Feb. 6, 2003), available at http://www.internationalcompetitionnetwork.org/speech_aba.html FN 25European Commission Proposal for a Council Regulation on the Control of Concentrations Between Undertakings, COM (2002) 711 Final (Dec. 11, 2002), at 12-13. FN 26Pate Touts DOJ’s International Program to Practitioners Attending ABA’s Forum, 84 ANTITRUST & TRADE REG. REP. (BNA) 146 (Feb. 14, 2003). FN 27James F. Rill, “ICN – The Private Sector Perspective,” 17 ANTITRUST 37 (Fall, 2002).

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