In 2009, United States authorities led the way on international cartel enforcement with more investigations, pleas, fines and prison sentences than any other jurisdiction. However, U.S. federal agencies are not the only ones ramping up efforts to curtail and punish monopolists.

Around the globe, several leading nations are steadfastly doing the same.

Roughly 120 antitrust agencies exist worldwide — all with the similar goal of encouraging free-market enterprise in today’s global economy and curtailing unlawful cartel behavior. This article introduces some U.S antitrust agencies’ international counterparts and highlights recent developments of a select few.

In today’s global economy, it is critical to have a keen awareness of regulation and enforcement changes both on the home front and internationally. In fact, today’s American antitrust lawyers — or competition lawyers, as they are referred to outside the U.S. — should closely follow international competition developments, as such developments often reverberate back to the United States.

There is a steady rise in the importance of communication and collaborative efforts among antitrust authorities around the world at both the investigative and remedial phase — not only do they routinely share information about specific investigations, the agencies are progressively working together to develop compatible enforcement practices and priorities. Increasingly, when one government agency challenges an international company’s behavior, government agencies in other countries often follow suit in the investigation.

One does not have to look far for examples of this type of sans borders, multi-agency interplay. During the past 24 months, the U.S. Department of Justice and Federal Trade Commission collaborated with their antitrust agency counterparts in Europe, Asia, North America, South America and Oceania on a number of competition investigations. Specifically, the DOJ and the European Commission extensively cooperated with one another during the Cisco/Tandberg merger investigations. During this same period, the DOJ and the FTC actively collaborated with Canada’s antitrust agencies regarding the Ticketmaster/Live Nation merger in 2009.

In June 2010, the U.S. and Canadian agencies conducted the antitrust examination of Nufarm Ltd.’s acquisition of AH Marks Holdings Ltd., a transaction that was also examined by both the U.K. Office of Fair Trading and the Australian Competition & Consumer Commission.

The European Commission and Competition Network

The European Commission, an executive body of the European Union, is responsible for proposing legislation, implementing decisions and for the general day-to-day running of the EU. The commission is also responsible for enforcing antitrust laws implemented by the EU.

Unlike antitrust enforcement agencies in the United States, where both fines and imprisonment are available sanctions, the commission’s only enforcement tool is monetary fines. It does not have the power to imprison the executives of violating companies.

The commission and national competition authorities in all of the EU’s member nations cooperate with each other through the European Competition Network, which is designed to create best practices and effective mechanisms to counter companies engaging in cross-border practices that restrict competition. Both the commission and EU member nations have enforcement jurisdiction over antitrust violators.

To date, the European Competition Network includes 27 member nations: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

Individual competition authorities for each of these member nations have been tackling enforcement issues in diverse areas including fish farming and shrimp cartels. For example, as recent as March 2011, the Finnish Parliament approved its new Finnish Competition Act, which addressed, in part, Finland’s use of the “dominance test” in merger enforcement. In April 2011, Greece amended its competition laws to bolster its ability to prosecute individuals for cartel offenses. In March 2011, Bulgaria passed its new “Leniency Programme,” which offers antitrust companies under investigation — commonly referred to as undertakings — the possibility to receive a greater reduction of fines if the company reveals its involvement with additional cartels that were not known to the antitrust agency or were not being investigated at the time of its leniency application.

The commission has been equally active enforcing antitrust laws on behalf of the EU. In total, last year alone, the commission levied over $3.96 billion in fines against industries such as steel producers, liquid crystal display, or LCD, panel manufacturers, chemical manufacturers and financial service institutions for alleged antitrust violations. It is anticipated that antitrust litigation and levied fines will increase even more in Europe as the commission re-evaluates its policies on antitrust class actions.

China

In August 2008, China stood up its first comprehensive antitrust law, titled the Anti-Monopoly Law of the People’s Republic of China. Like most antitrust laws, the AML comprehensively covers the traditional antitrust topics such as abuse of monopoly power, restrictive trade agreements, mergers and acquisitions and trade cartels.

Distinctive to China, however, the AML also attempts to harmonize socialism with principles of free competition by including measures such as the ability to scrutinize mergers and acquisitions that raise “national security” concerns and providing that one of its fundamental purposes is to promote “the healthy development of the socialist market economy.”

Under China’s antitrust laws, the enforcement authority is permitted to perform on-the-spot inspections, question parties of interest, examine, copy and retain company data and make inquiries of a company’s bank accounts and financial records.

If it provides any comfort, the enforcement authority is specifically charged with keeping company secrets confidential.

In April 2011, nearly three years after the enactment of its antitrust laws, China’s Supreme People’s Court, the nation’s highest court, issued its first guidance under the AML. According to the draft regulations, which are designed to clarify procedural issues in civil suits filed under the AML, private antitrust suits and follow-on litigation will be permitted in China.

Both consumers and companies, individually or as a class, would be allowed to file actions within two years after discovery of anti-competitive conduct, even if one of China’s competition authorities finds that no violation exists after conducting its own investigation.

To date, most competition cases in China have been dismissed; however, if the proposed regulations are put into effect, plaintiff-successful antitrust litigation in China will undoubtedly increase exponentially.

Canada

The Competition Bureau is the antitrust enforcement agency in Canada. In February 2010, the bureau amended its Notifiable Transaction Regulations to include a requirement that merger notifications must include studies, surveys, analysis and reports prepared and received by an officer or director of the notifying party for purposes of assessing the proposed transaction. Interestingly, this requirement is akin to item 4(c) of the United States’ Hart-Scott-Rodino Notification and Report form.

In March 2010, Canada also amended its Competition Act to establish a dual track — criminal and civil — approach to agreements between competitors. Canada has been busy on the enforcement side as well. Last year, the bureau obtained convictions and guilty pleas against multiple individuals and companies in six separate investigations for alleged price-fixing and bid-rigging offenses.

India

In May 2011, India’s Competition Commission announced its amended merger control regulations, which will apply to all Indian merger filings after June 1, 2011.

India’s first version of merger control regulations went into effect in 2008. Notable changes under the revised regulations include clarification of the Competition Commission’s timelines for reviewing mergers; a listing of transactions that do not require agency notification; reduced filing fees; streamlined notification forms; and removal of provisions allowing for pre-merger consultations. Some industry experts in India believe that the amended regulations are a marked improvement from earlier drafts, but will still require refinement over time.

Other Notable International Antitrust Agencies

Several other nations have been attentively increasing their antitrust enforcement over the past couple of years. New Zealand’s antitrust agency, the Commerce Commission, recently initiated investigations against several shipping logistic companies, accusing them of agreeing to fix surcharges and other fees for air freight-forwarding services.

Brazil’s antitrust agency, the Administrative Council for Economic Defense, levied the highest fine of any competition authority in 2010 — $1.66 billon — following the investigation of an alleged industrial gas cartel.

Germany’s antitrust agency, Federal Cartel Office, levied a power plant equipment supplier and two former managing directors $1.77 million for price fixing that allegedly occurred over a 13-year period.

Russia’s antitrust agency, the Federal Antimonopoly Service, initiated investigations against the country’s largest steelmakers and coal producer for alleged discriminatory pricing practices.

South Africa’s antitrust agency, the Competition Commission, recently levied $72 million against Pioneer Foods Ltd. to settle several price-fixing antitrust cases filed against the company. South Korea’s antitrust agency, the Fair Trade Commission, voted to impose $1.45 million in fines and corrective orders on 25 scrap metal processors for alleged price-fixing.

Last, but not least, Mexico’s antitrust agency, the Federal Competition Commission, now has power to impose criminal sanctions for cartel offenses. Under its new powers, Mexico’s Competition Commission can carry out dawn raids, impose fines up to 10 percent of a company’s annual domestic revenue, and imprison individuals found guilty of antitrust offenses for up to 10 years.

Given this increased enforcement activity and the enhanced legislation from multiple antitrust agencies around the world, there is no doubt that international dialogue between antitrust enforcers, business, consumers, and legal practitioners will continue to shape and influence the areas of global antitrust law. Future collaborative “without boarders” type of international investigations and antitrust enforcements will surely present new opportunities and challenges for both the enforcing agencies and global businesses alike. Stay tuned. •

 CARL W. HITTINGER is the chairman of DLA Piper’s litigation group in Philadelphia, where he concentrates his practice in complex commercial trial and appellate litigation with particular emphasis on antitrust and unfair competition matters. Hittinger is also a frequent lecturer and writer on antitrust issues and has extensive experience counseling clients on all aspects of civil and criminal antitrust law. He can be reached at 215-656-2449, or carl.hittinger@dlapiper.com.


MONIQUE MYATT GALLOWAY
is an associatein the firm’s Philadelphia office, where she concentratesher practice on complex commercial litigation.Prior to joining the firm, she served as a judicial lawclerk to Judge Cynthia M. Rufe of the U.S. DistrictCourt for the Eastern District of Pennsylvania andas a trial attorney for the Department of the Navy.She can be reached at 215-656-2404 or monique.galloway@dlapiper.com.