United States: U.S./E.U. Agencies Issue ‘Best Practice’ on Merger Investigation Co-operation

On October 30, 2002, the Federal Trade Commission, the Antitrust Division and the European Commission released a set of "best practices" for the co-ordination of future merger reviews. The guidelines institutionalise a number of practices already informally in use between the United States and the European Union, thereby confirming the agencies’ commitment to enhancing their co-operation and providing merger parties with useful guidance in the review process.

The U.S. and E.U. antitrust agencies will apply the guidelines to transactions which they simultaneously review. From the standpoint of merging parties, it is anticipated that such co-ordination will be sought primarily in sizeable transactions certain to get attention from both the European Commission and the U.S. antitrust authorities.

The objectives of the "best practices" are to:

• promote fully-informed decision-making and enhance the efficiency of investigations;
• minimise the risk of divergent outcomes and incoherent remedies;
• reduce the burden on parties participating in merger investigations; and
• increase public confidence in and overall transparency of the merger review processes.

The "best practices" include:

• Co-ordination in the timing of reviews:
• The agencies will try to synchronise their investigation timetables, by keeping one another apprised of important developments in their respective review processes.
• Merging parties may in certain cases be afforded an opportunity to confer with the E.U. and U.S. agency staffs jointly to discuss timing issues, preferably as soon as possible after the announcement of the transaction.
• Co-ordination in the collection and evaluation of evidence:
• The agencies may share publicly available information, co-ordinate their information or discovery requests and, consistent with their confidentiality and nondisclosure obligations, discuss their respective analyses as well as necessary remedial measures.
• Merging parties and third parties may be requested to execute waivers of confidentiality to enable more complete communication between the agencies regarding evidence, thereby helping to avoid divergent analyses and outcomes.
• Improved communication between agencies:
• The agencies should immediately contact one another upon learning of a transaction likely to require substantial cooperation between the U.S. and the E.U., and designate a contact person responsible for co-ordination with the other agency.
• The relevant investigative staff of each agency should seek to agree from the outset on a schedule for regular conferences and consultations between them on the progress of their investigations.
• Consultations may also occur between senior competition officials in the U.S. and the E.U. at key moments of one another’s investigations.
• Facilitation of compatible remedies/settlements:
• The agencies should strive to ensure that the remedies they accept do not impose inconsistent obligations upon the merging parties or negatively impact the other jurisdiction’s review.
• Therefore, consistent with their confidentiality obligations, the reviewing agencies should keep one another informed of remedy offers being considered and, where appropriate, share, discuss and comment on draft remedy proposals or settlement papers.
• The merging parties should also co-ordinate the timing and substance of their remedy proposals.
• In 2003, the U.S.-E.U. Merger Working Group - the group of lawyers and economists from each agency who developed the "best practices" - will focus on competitive effects in oligopolistic markets and the evaluation of efficiencies, in a sustained effort to promote convergence between the U.S. and E.U. on merger policy.