Multinational merger review: Lessons from our federalism

Antitrust Law Journal

Volumn 68, Issue 1, 2000, Pages 219-236

  Ginsburg, Douglas H ^a   Angstreich, Scott H ^a  

^a NONE

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EID: 0034409593     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (94)

1. See, e.g., Rolf Jungnickel & Georg Koopmann, Globalization of Business: Implications for International Competition and Related Policies, in COMPETITION POLICY IN AN INTERDEPENDENT WORLD ECONOMY 33, 33-35 (Erhard Kantzenbach et al. eds., 1993) [hereinafter COMPETITION POLICY]; A. Douglas Melamed, International Antitrust in an Age of International Deregulation, 6 GEO. MASON L. REV. 437, 437 (1998).
2. See, e.g., Rolf Jungnickel & Georg Koopmann, Globalization of Business: Implications for International Competition and Related Policies, in COMPETITION POLICY IN AN INTERDEPENDENT WORLD ECONOMY 33, 33-35 (Erhard Kantzenbach et al. eds., 1993) [hereinafter COMPETITION POLICY]; A. Douglas Melamed, International Antitrust in an Age of International Deregulation, 6 GEO. MASON L. REV. 437, 437 (1998).
3. See, e.g., A. Edward Safarian, Have Transnational Mergers or Joint Ventures Increased?, in COMPETITION POLICY, supra note 1, at 9, 13-15. For convenience, mergers and joint ventures are hereafter called simply "mergers."
4. See C. Benjamin Crisman, Jr. & Matthew S. Barnett, Mergers & Acquisitions: Recent Trends in Antitrust Enforcement, 1049 PLI/CORP 379, 402 (1998). Nearly 30% of the Department of Justice's enforcement work pertains to international or transnational mergers. See Melamed, supra note 1, at 437.
5. See William E. Kovacic, Merger Enforcement in Transition: Antitrust Controls on Acquisitions in Emerging Economies, 66 U. CIN. L. REV. 1075, 1083 (1998); Debra A. Valentine, Building a Cooperative Framework for Oversight in Mergers - The Answer to Extraterritorial Issues in Merger Review, 6 GEO. MASON L. REV. 525, 527 (1998). The companies involved, Ciba-Geigy and Sandoz, which formed Novartis, did have "substantial sales and distribution networks" in the United States. Kovacic, supra, at 1083. The European Commission also investigated the merger, but did not require any divestitures. See Valentine, supra, at 527.
6. See William E. Kovacic, Merger Enforcement in Transition: Antitrust Controls on Acquisitions in Emerging Economies, 66 U. CIN. L. REV. 1075, 1083 (1998); Debra A. Valentine, Building a Cooperative Framework for Oversight in Mergers - The Answer to Extraterritorial Issues in Merger Review, 6 GEO. MASON L. REV. 525, 527 (1998). The companies involved, Ciba-Geigy and Sandoz, which formed Novartis, did have "substantial sales and distribution networks" in the United States. Kovacic, supra, at 1083. The European Commission also investigated the merger, but did not require any divestitures. See Valentine, supra, at 527.
7. See Lawson A.W. Hunter & Susan M. Hutton, Where There Is a Will, There Is a Way: Cooperation in Canada-U.S. Antitrust Relations, 20 CANADA-U.S. L.J. 101, 111-12 (1994). The merging companies were Institut Merieux International of France and Connaught Bio Sciences of Canada. The Canadian authorities approved the merger without requiring divestitures. See id.
8. See, e.g., ELEANOR M. FOX & LAWRENCE A. SULLIVAN, CASES AND MATERIALS ON ANTITRUST 30-31 (1999 update memo); Crisman & Barnett, supra note 3, at 407-11; Valentine, supra note 4, at 525-26. The FTC approved the merger without imposing conditions. See Crisman & Barnett, supra note 3, at 408.
9. See Joel I. Klein, A Reality Check on Antitrust Rules in the World Trade Organization, and a Practical Way Forward on International Antitrust, Speech to OECD Conference on Trade and Competition (June 30, 1999), available 〈http://www.oecd.org/daf/ech/ klein_sp.htm〉. The 82 nations with antitrust laws and 24 nations developing such laws are listed in J. William Rowley & A. Neil Campbell, Multi-Jurisdictional Merger Review - Is It Time for a Common Form Filing Treaty, in POLICY DIRECTIONS FOR GLOBAL MERGER REVIEW 9, 40 (Sebastian O'Meara ed., 1998) [hereinafter POLICY DIRECTIONS].
10. See Joel I. Klein, A Reality Check on Antitrust Rules in the World Trade Organization, and a Practical Way Forward on International Antitrust, Speech to OECD Conference on Trade and Competition (June 30, 1999), available 〈http://www.oecd.org/daf/ech/ klein_sp.htm〉. The 82 nations with antitrust laws and 24 nations developing such laws are listed in J. William Rowley & A. Neil Campbell, Multi-Jurisdictional Merger Review - Is It Time for a Common Form Filing Treaty, in POLICY DIRECTIONS FOR GLOBAL MERGER REVIEW 9, 40 (Sebastian O'Meara ed., 1998) [hereinafter POLICY DIRECTIONS].
11. See Rowley & Campbell, supra note 7, at 9-10. In some regimes notification is voluntary. See, e.g., OECD, MERGER CASES IN THE REAL WORLD: A STUDY OF MERGER CONTROL PROCEDURES 146, 187-90 (1994).
12. See INTERNATIONAL COMPETITION POLICY ADVISORY COMMITTEE, FINAL REPORT annex 2-C (2000) [hereinafter ICPAC], available at 〈http://www.usdoj.gov/atr/icpac/final report.htm〉.
13. (If not earlier.) See Nina L. Hachigian, An Overview: International Antitrust Enforcement, ANTITRUST, Fall 1997, at 22 (noting that, prior to Boeing, the EU had opposed the merger of the South African company Gencor and the South African subsidiary of the British company Lonhro even though neither of the merging parties had assets in Europe); Diane P. Wood, The Impossible Dream: Real International Antitrust, 1992 U. CHI. LEGAL F. 277, 300-01 (1992) (arguing the EU began to accept an effects test as early as 1972).
14. (If not earlier.) See Nina L. Hachigian, An Overview: International Antitrust Enforcement, ANTITRUST, Fall 1997, at 22 (noting that, prior to Boeing, the EU had opposed the merger of the South African company Gencor and the South African subsidiary of the British company Lonhro even though neither of the merging parties had assets in Europe); Diane P. Wood, The Impossible Dream: Real International Antitrust, 1992 U. CHI. LEGAL F. 277, 300-01 (1992) (arguing the EU began to accept an effects test as early as 1972).
15. See Neil Campbell & Michael J. Trebilcock, International Merger Review: Problems of Multi-Jurisdictional Conflict, in COMPETITION POLICY, supra note 1, at 129, 133-36; Kovacic, supra note 4, at 1084; James F. Rill, Creating and Maintaining Competition in a Common Market: The Future of Antitrust in an Integrated World Economy, 1992 U. CHI. LEGAL F. 263, 273-74 (1992).
16. See Neil Campbell & Michael J. Trebilcock, International Merger Review: Problems of Multi- Jurisdictional Conflict, in COMPETITION POLICY, supra note 1, at 129, 133-36; Kovacic, supra note 4, at 1084; James F. Rill, Creating and Maintaining Competition in a Common Market: The Future of Antitrust in an Integrated World Economy, 1992 U. CHI. LEGAL F. 263, 273-74 (1992).
17. See Neil Campbell & Michael J. Trebilcock, International Merger Review: Problems of Multi- Jurisdictional Conflict, in COMPETITION POLICY, supra note 1, at 129, 133-36; Kovacic, supra note 4, at 1084; James F. Rill, Creating and Maintaining Competition in a Common Market: The Future of Antitrust in an Integrated World Economy, 1992 U. CHI. LEGAL F. 263, 273-74 (1992).
18. See ICPAC, supra note 9, at 91-92.
19. See OECD, supra note 8, at 99-100; Spencer Weber Waller, The Internationalization of Antitrust Enforcement, 77 B.U. L. REV. 343, 385-86 (1997). And, of course, until the last jurisdiction to investigate a merger approves it, the merging parties may be unable to consummate the transaction. See Campbell & Trebilcock, supra note 11, at 144. Further, "multiple merger review systems offer objectors multiple fora in which to make objections." Donald I. Baker, Antitrust Merger Review in an Era of Escalating Cross-Border Transactions, in POLICY DIRECTIONS, supra note 7, at 71, 76.
20. See OECD, supra note 8, at 99-100; Spencer Weber Waller, The Internationalization of Antitrust Enforcement, 77 B.U. L. REV. 343, 385-86 (1997). And, of course, until the last jurisdiction to investigate a merger approves it, the merging parties may be unable to consummate the transaction. See Campbell & Trebilcock, supra note 11, at 144. Further, "multiple merger review systems offer objectors multiple fora in which to make objections." Donald I. Baker, Antitrust Merger Review in an Era of Escalating Cross-Border Transactions, in POLICY DIRECTIONS, supra note 7, at 71, 76.
21. See OECD, supra note 8, at 99-100; Spencer Weber Waller, The Internationalization of Antitrust Enforcement, 77 B.U. L. REV. 343, 385-86 (1997). And, of course, until the last jurisdiction to investigate a merger approves it, the merging parties may be unable to consummate the transaction. See Campbell & Trebilcock, supra note 11, at 144. Further, "multiple merger review systems offer objectors multiple fora in which to make objections." Donald I. Baker, Antitrust Merger Review in an Era of Escalating Cross-Border Transactions, in POLICY DIRECTIONS, supra note 7, at 71, 76.
22. See Diane P. Wood, United States Antitrust Law in the Global Market, 1 INDUS. J. GLOBAL LEGAL STUD. 409, 427-28 (1994). For a description of the merger and the investigations undertaken by the 14 agencies, see OECD, supra note 8, at 66-83.
23. See OECD, supra note 8, at 159-60. Until 1998, a merger was deemed to have a "community dimension" and was reviewed at the supranational level only if the merging parties had turnover of at least 5 billion ECUs worldwide and 250 million ECUs in the EU. In order to review mergers that did not meet this threshold but that nonetheless had significant effects across Member States, the EU amended its merger regulation in 1997 (effective March 1998) to reach mergers in which the parties have a combined turnover of 2.5 billion ECUs worldwide and of 100 million ECUs in each of at least three Member States, as long as at least two of the undertakings concerned have a community-wide turnover of 100 million ECUs and turnover of more than 25 million ECUs in each of those three Member States unless each of the undertakings concerned has more than two-thirds of its Community-wide turnover in the same Member State. See Council Regulation (EC) 1310/97 of 30 June 1997 amending Regulation (EEC) 4064/89 on the control of concentrations between undertakings, 1997 O.J. (L 180) 13; Yvonne Regn, Comment, 1998 Merger Regulation Amendments, 4 COLUM. J. EUR. L. 687, 691 (1998). Through 1993 about 60 mergers a year were reviewed under the regulation. See Waller, supra note 13, at 381. In 1994 the number of mergers reviewed began to increase dramatically and the EU now receives notifications regarding about 250 mergers each year. See EUROPEAN COMMISSION, EUROPEAN COMMUNITY COMPETITION POLICY: 28TH REPORT ON COMPETITION POLICY 62 (1998), available at 〈http://europa.eu.int/comm/dg04/public/en/rap98. pdf〉. This increase owes more to an upsurge in merger activity than to the alternative threshold test, which in 1998 accounted for only 6% of the mergers notified. See id. at 48-49.
24. See OECD, supra note 8, at 159-60. Until 1998, a merger was deemed to have a "community dimension" and was reviewed at the supranational level only if the merging parties had turnover of at least 5 billion ECUs worldwide and 250 million ECUs in the EU. In order to review mergers that did not meet this threshold but that nonetheless had significant effects across Member States, the EU amended its merger regulation in 1997 (effective March 1998) to reach mergers in which the parties have a combined turnover of 2.5 billion ECUs worldwide and of 100 million ECUs in each of at least three Member States, as long as at least two of the undertakings concerned have a community-wide turnover of 100 million ECUs and turnover of more than 25 million ECUs in each of those three Member States unless each of the undertakings concerned has more than two-thirds of its Community-wide turnover in the same Member State. See Council Regulation (EC) 1310/97 of 30 June 1997 amending Regulation (EEC) 4064/89 on the control of concentrations between undertakings, 1997 O.J. (L 180) 13; Yvonne Regn, Comment, 1998 Merger Regulation Amendments, 4 COLUM. J. EUR. L. 687, 691 (1998). Through 1993 about 60 mergers a year were reviewed under the regulation. See Waller, supra note 13, at 381. In 1994 the number of mergers reviewed began to increase dramatically and the EU now receives notifications regarding about 250 mergers each year. See EUROPEAN COMMISSION, EUROPEAN COMMUNITY COMPETITION POLICY: 28TH REPORT ON COMPETITION POLICY 62 (1998), available at 〈http://europa.eu.int/comm/dg04/public/en/rap98. pdf〉. This increase owes more to an upsurge in merger activity than to the alternative threshold test, which in 1998 accounted for only 6% of the mergers notified. See id. at 48-49.
25. See Götz Drauz & Thalia Lingos, The Treatment of Trans-Border Mergers in the 1990s: A European Perspective, in POLICY DIRECTIONS, supra note 7, at 55, 59.
26. Karl M. Meessen, Competition of Competition Laws, 10 NW. J. INT'L L. & BUS. 17, 21 (1989); see also Committee on the United States in a Global Economy, Harmonizing and Coordinating the Economic Laws of Nations: A Comparative Study, 49 REC. A.B. N.Y.C. 800, 829 (1994) ("Perhaps the strongest reason not to pursue harmonization is the value of diversity and the possibility of new legal concepts bubbling up from the needs of particular societies at . . . particular times.").
27. Karl M. Meessen, Competition of Competition Laws, 10 NW. J. INT'L L. & BUS. 17, 21 (1989); see also Committee on the United States in a Global Economy, Harmonizing and Coordinating the Economic Laws of Nations: A Comparative Study, 49 REC. A.B. N.Y.C. 800, 829 (1994) ("Perhaps the strongest reason not to pursue harmonization is the value of diversity and the possibility of new legal concepts bubbling up from the needs of particular societies at . . . particular times.").
28. See infra Part V.
29. See Kovacic, supra note 4, at 1090-96 (discussing why "[a]pproaches that have proven effective in Western countries are hardly assured of success when transplanted into a transition economy setting").
30. By unification, we refer here both to the creation of a supranational merger review agency, which would apply a uniform standard for evaluating all mergers within its jurisdiction, and to the parallel application by regional or national authorities of a uniform standard, bearing in mind that parallel administration can make a nominally uniform or harmonized law non-uniform in practice. See Eleanor M. Fox, Toward World Antitrust and Market Access, 91 AM. J. INT'L L. 1, 16 (1997) (noting that countries presently interpret the same terms in their antitrust laws in different manners).
31. Mexico enacted its first Federal Law of Trade Competition in 1992. The law "does not closely resemble" either U.S. or Canadian antitrust law. Council on International Affairs, Report on the North American Free Trade Agreement, 49 REC. A.B. N.Y.C. 143, 185-86 (1994).
32. Kovacic, supra note 4, at 1085; see ICPAC, supra note 9, at 105, 130.
33. See Kovacic, supra note 4, at 1086.
34. See, e.g., Matthew D. Adler & Eric A. Posner, Rethinking Cost-Benefit Analysis, 109 YALE L.J. 165, 190 (1999) ("The Kaldor-Hicks standard states that a project is desirable if it makes the Winners better off by an amount sufficient to overcompensate the Losers, if the Losers could be compensated through a costless lump-sum transfer.").
35. See ANTITRUST DIVISION MANUAL, ch. 7, available at 〈http://www.usdoj.gov/atr/foia/ divisionmanual/ch7.htm#a〉 (describing the "clearance procedures" used by the FTC and the DOJ to determine which agency should review a merger).
36. See David A. Zimmerman, Comment, Why State Attorneys General Should Have a Limited Role in Enforcing the Federal Antitrust Law of Mergers, 48 EMORY L.J. 337, 340-44 (1999).
37. The states routinely try to identify a single state or small group of states to take the lead in analyzing a merger. See Donald L. Flexner & Mark A. Racanelli, State and Federal Antitrust Enforcement in the United States: Collision or Harmony?, 9 CONN. J. INT'L L. 501, 509-10 & n.42 (1994); Eleanor M. Fox, Can We Control Merger Control? - An Experiment, in POLICY DIRECTIONS, supra note 7, at 79, 84-86. Some commentators have suggested a similar solution to the problem of duplicative reviews of multinational mergers. See, e.g., ABA ANTITRUST SECTION, REPORT OF THE SPECIAL COMMITTEE ON INTERNATIONAL ANTITRUST 189-91 (1991); OECD, supra note 8, at 114-15; Campbell & Trebilcock, supra note 11, at 147-53; Fox, supra, at 86-87. One obvious difficulty with exporting this procedure to the multinational context is that the antitrust laws of the several states are much more similar to each other than are those of the various nations; the states also may have more confidence in each other's neutrality than would typically jealous nations. Yet even the states yield only the leading role in the investigation, not ultimate decisional authority. A second difficulty is that merger review typically operates under very short deadlines; a country that regrets its decision to let another take the lead is left in the position of having either to rush its merger review or to contemplate unscrambling the merger, which is undesirable from both the regulators' and the companies' points of view. See Valentine, supra note 4, at 530.
38. The states routinely try to identify a single state or small group of states to take the lead in analyzing a merger. See Donald L. Flexner & Mark A. Racanelli, State and Federal Antitrust Enforcement in the United States: Collision or Harmony?, 9 CONN. J. INT'L L. 501, 509-10 & n.42 (1994); Eleanor M. Fox, Can We Control Merger Control? - An Experiment, in POLICY DIRECTIONS, supra note 7, at 79, 84-86. Some commentators have suggested a similar solution to the problem of duplicative reviews of multinational mergers. See, e.g., ABA ANTITRUST SECTION, REPORT OF THE SPECIAL COMMITTEE ON INTERNATIONAL ANTITRUST 189-91 (1991); OECD, supra note 8, at 114-15; Campbell & Trebilcock, supra note 11, at 147-53; Fox, supra, at 86-87. One obvious difficulty with exporting this procedure to the multinational context is that the antitrust laws of the several states are much more similar to each other than are those of the various nations; the states also may have more confidence in each other's neutrality than would typically jealous nations. Yet even the states yield only the leading role in the investigation, not ultimate decisional authority. A second difficulty is that merger review typically operates under very short deadlines; a country that regrets its decision to let another take the lead is left in the position of having either to rush its merger review or to contemplate unscrambling the merger, which is undesirable from both the regulators' and the companies' points of view. See Valentine, supra note 4, at 530.
39. The states routinely try to identify a single state or small group of states to take the lead in analyzing a merger. See Donald L. Flexner & Mark A. Racanelli, State and Federal Antitrust Enforcement in the United States: Collision or Harmony?, 9 CONN. J. INT'L L. 501, 509-10 & n.42 (1994); Eleanor M. Fox, Can We Control Merger Control? - An Experiment, in POLICY DIRECTIONS, supra note 7, at 79, 84-86. Some commentators have suggested a similar solution to the problem of duplicative reviews of multinational mergers. See, e.g., ABA ANTITRUST SECTION, REPORT OF THE SPECIAL COMMITTEE ON INTERNATIONAL ANTITRUST 189-91 (1991); OECD, supra note 8, at 114-15; Campbell & Trebilcock, supra note 11, at 147-53; Fox, supra, at 86-87. One obvious difficulty with exporting this procedure to the multinational context is that the antitrust laws of the several states are much more similar to each other than are those of the various nations; the states also may have more confidence in each other's neutrality than would typically jealous nations. Yet even the states yield only the leading role in the investigation, not ultimate decisional authority. A second difficulty is that merger review typically operates under very short deadlines; a country that regrets its decision to let another take the lead is left in the position of having either to rush its merger review or to contemplate unscrambling the merger, which is undesirable from both the regulators' and the companies' points of view. See Valentine, supra note 4, at 530.
40. During the Bush Administration, the DOJ and the National Association of Attorneys General established the Executive Working Group on Antitrust, which was designed to foster cooperation between federal and state antitrust authorities. See Barry E. Hawk & Laraine L. Laudati, Antitrust Federalism in the United States and Decentralization of Competition Law Enforcement in the European Union: A Comparison, 20 FORDHAM INT'L L.J. 18, 30 (1996).
41. See, e.g., Jonathan Rose, State Antitrust Enforcement, Mergers, and Politics, 41 WAYNE L. REV. 71, 85 (1994); Zimmerman, supra note 26, at 346. The states revised their merger guidelines in 1993, see National Association of Attorneys General, Horizontal Merger Guidelines (1993), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,406, which eliminated some inconsistencies with the federal Merger Guidelines. See Zimmerman, supra note 26, at 345.
42. See, e.g., Jonathan Rose, State Antitrust Enforcement, Mergers, and Politics, 41 WAYNE L. REV. 71, 85 (1994); Zimmerman, supra note 26, at 346. The states revised their merger guidelines in 1993, see National Association of Attorneys General, Horizontal Merger Guidelines (1993), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,406, which eliminated some inconsistencies with the federal Merger Guidelines. See Zimmerman, supra note 26, at 345.
43. See, e.g., Jonathan Rose, State Antitrust Enforcement, Mergers, and Politics, 41 WAYNE L. REV. 71, 85 (1994); Zimmerman, supra note 26, at 346. The states revised their merger guidelines in 1993, see National Association of Attorneys General, Horizontal Merger Guidelines (1993), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,406, which eliminated some inconsistencies with the federal Merger Guidelines. See Zimmerman, supra note 26, at 345.
44. See Rose, supra note 29, at 87-103; Zimmerman, supra note 26, at 349-59.
45. See Zimmerman, supra note 26, at 346-47.
46. The Congress surely has the power under the Commerce Clause to eliminate the right of the states to sue under federal antitrust law as well as the authority of the states to enforce their own antitrust laws. See Robert H. Lande, When Should States Challenge Mergers: A Proposed Federal/State Balance, 35 N.Y.L. SCH. L. REV. 1047, 1050-52 & nn.24-28 (1990); cf. California v. ARC America Corp., 490 U.S. 93, 100-06 (1989) (noting the presumption against congressional preemption of an area, like antitrust, traditionally regulated by the states and holding that the Congress has not preempted state antitrust laws, but never suggesting that the Congress could not do so).
47. See Waller, supra note 13, at 355 n.56. Nonetheless, about one-third of the Member States have voluntarily aligned their national laws with that of the EU. See Kurt Stockmann, Antitrust-Merger Control - A German Perspective, 9 CONN. J. INT'L L. 565, 565 (1994). The EU takes a different position with respect to aspiring applicants for membership, requiring them to harmonize their competition law with that of the EU. See Fox, supra note 20, at 17 n.83.
48. See Valentine, supra note 4, at 530-31. Notification occurs pursuant to the Agreement Between the Government of the United States of America and the Commission of the European Communities Regarding the Application of Their Competition Laws, Art. II, § 1 (Sept. 1991), available at 〈http://www.usdoj.gov/atr/public/international/docs/ec.htm〉. When both the United States and the EU are reviewing a merger they generally ask the parties to waive confidentiality so each authority can share the information it obtains with the other; such waivers are routinely given.
49. See Committee on the United States in a Global Economy, supra note 17, at 827, 830-31; Klein, supra note 7; Melamed, supra note 1, at 439-40. For example, discussions are presently taking place within both the OECD and the WTO regarding the adoption of a multilateral agreement on antitrust law, although the proposed agreement calls for neither the harmonization of national antitrust laws nor the creation of a supranational enforcement agency. See, e.g., Leon Brittan, The Need for a Multilateral Framework of Competition Rules, Speech to OECD Conference on Trade and Competition (June 29, 1999), available at 〈http://www.oecd.org/daf/ech/sirbrittan.htm〉; Klein, supra note 7; Alan Wm. Wolff, Unanswered Questions: The Place of Trade and Competition Policy in the "Seattle Round" (speech to OECD Conference on Trade and Competition, June 30, 1999) (on file with authors).
50. See Committee on the United States in a Global Economy, supra note 17, at 827, 830-31; Klein, supra note 7; Melamed, supra note 1, at 439-40. For example, discussions are presently taking place within both the OECD and the WTO regarding the adoption of a multilateral agreement on antitrust law, although the proposed agreement calls for neither the harmonization of national antitrust laws nor the creation of a supranational enforcement agency. See, e.g., Leon Brittan, The Need for a Multilateral Framework of Competition Rules, Speech to OECD Conference on Trade and Competition (June 29, 1999), available at 〈http://www.oecd.org/daf/ech/sirbrittan.htm〉; Klein, supra note 7; Alan Wm. Wolff, Unanswered Questions: The Place of Trade and Competition Policy in the "Seattle Round" (speech to OECD Conference on Trade and Competition, June 30, 1999) (on file with authors).
51. The United States has signed agreements with Australia, Canada, the EU, Germany, Israel, Japan, and most recently Brazil. See International Cooperation Agreements, available at 〈http://www.usdoj.gov/atr/public/international/int_arrangements.htm〉. Other bi-and multi-lateral agreements to foster cooperation in antitrust enforcement include those between Australia and New Zealand; the United States, Canada, and Mexico (NAFTA); and Germany and France. See OECD, supra note 8, at 191-97. The EU has also signed bilateral agreements with Canada and Japan. See Waller, supra note 13, at 363.
52. See Klein, supra note 7.
53. See Brittan, supra note 35.
54. See Rill, supra note 11, at 274.
55. See id. at 271.
56. 1 PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW ¶ 100a, at 4 (rev. ed. 1997).
57. See Kovacic, supra note 4, at 1086.
58. See ICPAC, supra note 9, at 48-49; Kovacic, supra note 4, at 1086; Melamed, supra note 1, at 444.
59. See Kovacic, supra note 4, at 1087.
60. See Melamed, supra note 1, at 444-45; Rowley & Campbell, supra note 7, at 23-24.
61. See, e.g., OECD, supra note 8, at 108-11; Campbell & Trebilcock, supra note 11, at 145-46.
62. See ICPAC, supra note 9, at 109; see also Committee on the United States in a Global Economy, supra note 17, at 833 (recommending adoption of a "single merger notification form and schedule . . . by all jurisdictions"). In 1997 the United Kingdom, France, and Germany adopted a voluntary common filing form, but it is rarely used because national forms often require less information. See Frederic Jenny, International Merger Control, in POLICY DIRECTIONS, supra note 7, at 91, 96; Rowley & Campbell, supra note 7, at 25-26.
63. Failure to comply with a jurisdiction's notification requirement can prove costly. In 1997 the FTC imposed a $5.1 million fine upon a German company for failing to notify the Commission of its acquisition of a Brazilian company, a significant sum considering that the acquisition was for $40 million. See Crisman & Barnett, supra note 3, at 402-04; Feb. 27, 1997 Press Release, available at 〈http://www.usdoj.gov/opa/1997/9702/mahle.htm〉.
64. See OECD, supra note 8, at 187-90; Kovacic, supra note 4, at 1099.
65. For example, notification of the United States can be made once the parties have executed a letter of intent. In the EU, however, notification cannot be made until the parties have executed a definitive agreement. See Frank L. Fine, A Practical Guide to EU Merger Control Jurisdiction and Procedure, ANTITRUST, Fall 1998, at 34, 36; Hachigian, supra note 10, at 24. The difference can be a matter of months.
66. See Council on International Affairs, supra note 21, at 192; Kovacic, supra note 4, at 1085.
67. Rowley and Campbell have called for the adoption of "a multilateral treaty which would leave existing domestic merger review regimes intact, while committing signatories to accept an 'overlay' of standardised timing rules, filing forms, information sharing protocols and other procedures for cross-border mergers." Supra note 7, at 31-39.
68. The latter two are the Association of South East Asian Nations (ASEAN) and the Southern Common Market (Mercosur), which consists of Argentina, Brazil, Paraguay, and Uruguay.
69. See supra Part II.A.
70. See supra note 28.
71. See Protocol for Coordinating Federal-State Merger Probes, 62 Antitrust & Trade Reg. Rep. (BNA) 338 (1992). We do not mean to minimize the significance of information sharing or, more important, the barriers thereto raised by disparate laws concerning the disclosure of confidential business information. See OECD, supra note 8, at 86 ("Confidentiality rules provide the single greatest procedural obstacle to greater international co-operation."); see also Richard Blumenthal et al., Antitrust Review of Mergers by State Attorneys General: The New Cops on the Beat, 67 CONN. BAR J. 1, 4-9 (1993) (describing the states' difficulties in reviewing mergers due to their inability to obtain Hart-Scott-Rodino information in the 1980s and the states' responses thereto, including the creation of a Voluntary Pre-Merger Disclosure Compact and pursuit of the 1991 information sharing protocol).
72. See Protocol for Coordinating Federal-State Merger Probes, 62 Antitrust & Trade Reg. Rep. (BNA) 338 (1992). We do not mean to minimize the significance of information sharing or, more important, the barriers thereto raised by disparate laws concerning the disclosure of confidential business information. See OECD, supra note 8, at 86 ("Confidentiality rules provide the single greatest procedural obstacle to greater international co-operation."); see also Richard Blumenthal et al., Antitrust Review of Mergers by State Attorneys General: The New Cops on the Beat, 67 CONN. BAR J. 1, 4-9 (1993) (describing the states' difficulties in reviewing mergers due to their inability to obtain Hart-Scott-Rodino information in the 1980s and the states' responses thereto, including the creation of a Voluntary Pre-Merger Disclosure Compact and pursuit of the 1991 information sharing protocol).
73. Available at 〈http://www.usdoj.gov/atr/public/guidelines/1773.htm〉.
74. See id.
75. See id. § III.A.
76. See id. This may include agreement upon joint interviews or depositions of witnesses and employment of outside experts. See id. § III.A-C. The Committee on the United States in a Global Economy of the New York City Bar Association has recommended that nations investigating a merger should similarly coordinate their requests for information. See supra note 17, at 833.
77. Curiously, the Attorney General's International Competition Policy Advisory Committee (ICPAC) suggested only that the Protocol might serve as a "useful model" pursuant to which the federal antitrust agencies could "reduce to writing" the informal procedures they have developed for coordinating merger reviews with their overseas counterparts, but stopped short of suggesting that the Protocol might provide a model for the content of those procedures. ICPAC, supra note 9, at 69.
78. See Rowley & Campbell, supra note 7, at 30.
79. This coordination takes place in light of both the 1991 cooperation agreement, see supra note 34, and a 1998 agreement expanding upon it. See Agreement Between the Government of the United States of America and the European Communities on the Application of Positive Comity Principles in the Enforcement of Their Competition Laws, available at 〈http://www.usdoj.gov/atr/public/international/docs/1781.htm〉.
80. Halliburton Co. Agrees to Sell Part of Its Worldwide Oil Field Services Business and Its Drilling Fluids Business in Order to Proceed with Dresser Industries Merger, Press Release, Sept. 29, 1998, available at 〈http://www.usdoj.gov/atr/public/press_releases/ 1998/1963.htm〉.
81. Justice Department Clears WorldCom/MCI Merger After MCI Agrees to Sell Its Internet Business, Press Release, July 15, 1998, available at 〈http://www.usdoj.gov/atr/ public/press_releases/1998/1829.htm〉.
82. See id.
83. It would seem peculiar for a company to permit the EU to pass confidential information to the United States, but to balk at its being shared also with the particular states that are investigating the transaction. In addition, the United States should make every effort, in light of the federal-state protocol, to obtain permission to disclose information to the States with which it is coordinating its investigation.
84. See sources cited supra note 63.
85. See Evan Thomas et al., Big Doubts About Big Deals, TIME, Aug. 3, 1981, at 44, 45 (summing up the new approach to merger review instituted by then-head of the Antitrust Division William Baxter in then-Attorney General William French Smith's statement, "Bigness in business is not necessarily badness").
86. See United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (1956) (Cellophane). William Landes and Richard Posner explain what has become known as the "Cellophane fallacy" in Market Power in Antitrust Cases, 94 HARV. L. REV. 937, 970-72 (1981).
87. See, e.g., WILLIAM J. BAUMOL ET AL., CONTESTABLE MARKETS AND THE THEORY OF INDUSTRY STRUCTURE 199-224 (1982); William J. Baumol & Robert D. Willig, Fixed Costs, Sunk Costs, Entry Barriers and Sustainability of Monopoly, 96 Q.J. ECON. 405 (1981).
88. See, e.g., WILLIAM J. BAUMOL ET AL., CONTESTABLE MARKETS AND THE THEORY OF INDUSTRY STRUCTURE 199-224 (1982); William J. Baumol & Robert D. Willig, Fixed Costs, Sunk Costs, Entry Barriers and Sustainability of Monopoly, 96 Q.J. ECON. 405 (1981).
89. Compare 1968 Merger Guidelines § 5, reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,101, at 20,521, 20,523 (relying on concentration ratios), with 1992 Merger Guidelines § 1.51 (as amended 1997) (relying on the Herfindahl-Hirschman Index to determine market concentration), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,104.
90. See United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 323 (1897) (Peckham, J.) ("Trade or commerce [after a merger yields a reduction in the price of a good] may nevertheless be badly and unfortunately restrained by driving out of business the small dealers and worthy men whose lives have been spent therein, and who might be unable to readjust themselves to their altered surroundings"); see also ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF 24-25, 41-47 (rev. ed. 1993) (describing Justice Brandeis's "develop[ment] [of] the strain of policy suggested in Peckham's remark about 'small dealers and worthy men'" in Board of Trade of City of Chicago v. United States, 246 U.S. 231 (1918)).
91. See Shanker A. Singham, Shaping Competition Policy in the Americas: Scope for Transatlantic Cooperation?, 24 BROOKLYN J. INT'L L. 363, 385-86 (1998); see also Kovacic, supra note 4, at 1086 (noting that EU merger analysis is more likely than U.S. analysis "to reflect solicitude for the well-being of individual competitors"); Valentine, supra note 4, at 532 (same).
92. Indeed, antitrust scholarship has now come under the sway of game theory, which is useful in elucidating the potential for cooperative behavior among competitors. See Peter Huber, Competition, Conglomerates, and the Evolution of Cooperation, 93 YALE L.J. 1147, 1160-62 (1984) (reviewing ROBERT AXELROD, THE EVOLUTION OF COOPERATION (1984)). There is some indication in that literature, which is still at an early stage, that more firms may be able to coordinate their behavior without unlawful communication than had previously been thought possible. See Dennis W. Carlton et al., Communication Among Competitors: Game Theory and Antitrust, 5 GEO. MASON L. REV. 423 (1997). One implication may be a heightened concern with market concentration in merger analysis.
93. Indeed, antitrust scholarship has now come under the sway of game theory, which is useful in elucidating the potential for cooperative behavior among competitors. See Peter Huber, Competition, Conglomerates, and the Evolution of Cooperation, 93 YALE L.J. 1147, 1160-62 (1984) (reviewing ROBERT AXELROD, THE EVOLUTION OF COOPERATION (1984)). There is some indication in that literature, which is still at an early stage, that more firms may be able to coordinate their behavior without unlawful communication than had previously been thought possible. See Dennis W. Carlton et al., Communication Among Competitors: Game Theory and Antitrust, 5 GEO. MASON L. REV. 423 (1997). One implication may be a heightened concern with market concentration in merger analysis.
94. Indeed, antitrust scholarship has now come under the sway of game theory, which is useful in elucidating the potential for cooperative behavior among competitors. See Peter Huber, Competition, Conglomerates, and the Evolution of Cooperation, 93 YALE L.J. 1147, 1160-62 (1984) (reviewing ROBERT AXELROD, THE EVOLUTION OF COOPERATION (1984)). There is some indication in that literature, which is still at an early stage, that more firms may be able to coordinate their behavior without unlawful communication than had previously been thought possible. See Dennis W. Carlton et al., Communication Among Competitors: Game Theory and Antitrust, 5 GEO. MASON L. REV. 423 (1997). One implication may be a heightened concern with market concentration in merger analysis.