In remarks to be delivered this evening before the opening of the European Institute's Eighth Annual Transatlantic Seminar on Trade and Investment, Federal Trade Commission Chairman Robert Pitofsky will outline some of the trends affecting international antitrust enforcement and discuss the importance of procedural coordination, positive comity, and convergence in responding to these trends.
Among the trends to be cited by Pitofsky will be the remarkable growth in international trade and the efforts of countries around the world to adopt antitrust codes, expand existing codes, and increase resources committed to enforcement.
For example, the Chairman will point out that approximately 82 countries have some kind of competition law, and 52 of those codes (63 percent) took effect during the past 10 years. An additional 24 countries are in the process of drafting or enacting an antitrust law.
According to Pitofsky the challenge for antitrust officials will be to develop a constructive, feasible balance between "[a] minimal response ... among countries with antitrust codes, according due respect for the preservation of confidential information and for differences in approach from country to country. ... [and a] maximum response ... a world competition code, enforced by mandatory dispute resolution in some international tribunal."
In his remarks, the Chairman will outline three developments he believes will shape the future of antitrust in a global economy: developments in procedural coordination; the concept of positive comity; and prospects for international convergence of antitrust law.
Pitofsky believes the most significant development over the last 15 to 20 years in international antitrust is the increasing cooperation among enforcement authorities in various countries. Today, the United States is a signatory to a number of bilateral agreements, including a recent agreement with the European Communities signed in June 1998 concerning the application of positive comity principles in the enforcement of competition laws.
"While these commitments to cooperation are important - even essential - to effective international enforcement, they are by no means the whole story. In many ways the real internationalization of antitrust enforcement is found in the day-in-day-out collaboration of enforcement officials in so many parts of the world. ... For example, at the FTC, 25 percent of the mergers filed last year involved parties or assets in at least two different countries, and sometimes as many as eight or ten. Of our full-phase merger investigations over the last several years, at least 50 percent have involved a foreign party or assets or information located abroad. That is a vast increase over the number of international mergers that were reviewed by the FTC 20 years ago. At the Department of Justice, where enforcement against international cartels has been pursued with unprecedented vigor and success in recent years, 30 ongoing grand juries - one-third of the total - are currently examining suspected international cartel activity. Without international coordination, law enforcement would be inconsistent, discordant and, in important ways, unfair to the firms subject to antitrust review."
The Chairman also will note that "[c]oncerns about international friction generated by extraterritorial enforcement are not just theoretical. One need only think back 25 years to the efforts by the United States to enforce its law against foreign cartels - the uranium litigation is a glaring example - followed by the enactment in foreign countries of blocking and claw back statutes designed to prevent any further U.S. behavior they regarded as an intrusion on their sovereignty. Positive comity is a promising, pragmatic way of addressing these sorts of issues. ... The key point about positive comity that I think sometimes is missed is that the requesting nation, whether it is United States or one of our trading partners, does not wash its hands with respect to a practice by seeking investigation by a foreign nation. Each country retains the right, if it is not satisfied with the speed or quality of investigation, to initiate or reinstitute its own enforcement activities. Indeed, I expect there will be instances where positive comity is only a preliminary - a practical and comity-conscious preliminary - to old-fashioned extraterritorial enforcement."
Pitofsky believes very limited convergence is not hopelessly impractical and will cite as an example the recent agreement between 11 of the 12 countries in the Western hemisphere that enforce a competition code to adopt a policy pronouncement of hostility to cartel behavior and a commitment to cooperate in international enforcement against such behavior. But formal convergence beyond the anti-cartel example is very unlikely at this time.
"Aside from convergence that occurs through internationally negotiated agreements, there is a kind of informal convergence by 'learning.' As scholars, practitioners and enforcement officials meet more frequently, explain the unique qualities of their system, and debate the merits of each, there is a slow, subtle but discernable trend toward more uniform approaches. At a minimum, as countries understand what has worked and failed to work in other jurisdictions, they adjust their own laws to take that knowledge into account."
In conclusion, the Chairman will state that "[o]ur goal should be to open markets to free and fair trade. ... The important thing is to continue to take small but practical steps, all the while minimizing the extent to which divergence of antitrust rules from country to country impair the orderly development of international commerce."
NOTE: These remarks represent the views of Chairman Pitofsky and not necessarily the views of the Commission or any other individual Commissioner.
Copies of the full text of Chairman Pitofsky's remarks, "Competition Policy in a Global Economy - Today and Tomorrow," are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
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