Antitrust Law Daily International enforcement, cooperation efforts highlighted by acting antitrust chief
Thursday, September 14, 2017

International enforcement, cooperation efforts highlighted by acting antitrust chief

By Jeffrey May, J.D.

Andrew Finch, the Acting Assistant Attorney General in charge of the Department of Justice Antitrust Division, discussed the agency’s international enforcement efforts and cooperation with counterparts around the world in an address to the Fordham Competition Law Institute’s 44th Annual Conference on International Antitrust Law and Policy today. In his remarks, Finch reiterated recent comments made regarding the importance of adhering to the rule of law and maintaining transparency in antitrust enforcement, as well ensuring procedural fairness. Justice Department efforts to investigate and prosecute cartel conduct involving new technology also were discussed.

Since April, Finch has served as the acting antitrust chief at the Justice Department. Finch was named to the post, pending Senate approval of President Donald Trump’s nominee for head of the Antitrust Division—Makan Delrahim. Both Finch and Delrahim served in the Antitrust Division during the George W. Bush Administration. In his speech at Fordham today, Finch noted that the agency remains fully committed to collaborating with other foreign competition authorities, a priority that Delrahim highlighted in his testimony before the Senate Judiciary Committee in June.

As a result of the explosion over the past few years of competition authorities around the globe, with their varying premerger notification processes and leniency programs, now it is more important than ever for competition authorities to work together on enforcement and broader policy issues, according to Finch. The acting antitrust chief suggested that there was a need to reduce undue burdens on economic growth resulting from the proliferation of antitrust enforcers. Enforcers need to minimize the impact of different processes and different standards that result from the numerous antitrust authorities.

Rule of law, transparency. Earlier this week, Finch delivered remarks about the importance of adhering to the rule of law in antitrust enforcement at the 11th Annual Georgetown Law School Global Antitrust Enforcement Symposium. Finch reiterated those views today that antitrust enforcement consistent with the rule of law allows businesses to make reasonable predictions about how a law will be applied, or what the legal consequences of conduct will be.

Finch also encouraged competition authorities to strive for greater transparency in their processes to assist businesses. While transparency can lead to greater scrutiny of the agency, the benefits of scrutiny are well worth the costs, according to Finch. The guidance furthers economic growth.

Cartel investigations. Also discussed were efforts to make cartel investigations more efficient for enforcement agencies and antitrust leniency applicants. Among the important things that agencies can do to streamline processes is to coordinate on logistics of interviews and searches. On this topic, Finch touched on a recent decision of the U.S. Court of Appeals in New York, overturning on constitutional grounds the fraud convictions of two former employees in the London office of Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. related to a scheme to manipulate the London InterBank Offered Rates or LIBOR. In that case, which involved coordinated interviews by U.S. and U.K. authorities, the U.S. government was found to have violated the Fifth Amendment rights of the two U.K. nationals when it used—in the form of tainted evidence from a cooperating witness—their own testimony compelled by a U.K. enforcement agency against them. This situation demonstrates the complexities when multiple jurisdictions are investigating conduct, according to Finch.

Finch stressed the importance of opening the conversation about procedural fairness to leniency applicants and their counsel to seek feedback on ways that agencies can be more efficient. Reducing the burdens will benefit both leniency applicants and enforcement agencies. If costs of leniency are lower, there will be more leniency applications that assist enforcement, in Finch’s view.

Finch also discussed recent enforcement actions aimed at price fixing facilitated by algorithms. In 2015, the Justice Department filed charges as a result of an investigation into price fixing by e-commerce sellers of wall posters. A former executive of an unnamed e-commerce seller of posters, prints, and framed art—reportedly Art.Com Inc.—was the first person charged for his role in that conspiracy. That individual has agreed to plead guilty. U.K. online retailer Trod Ltd. and a company executive were later charged in the probe. Trod has since pleaded guilty. The conspirators were alleged to have used algorithm-based pricing software to fix the prices of online wall decor. The U.K. Competition and Markets Authority also has announced settlements with retailers as a result of its investigation.

Finch stressed that these actions are not about price control. The Antitrust Division is not interfering with independent pricing decisions. Rather, the focus was on anticompetitive behavior and concerted action. As the international community gains experience with conspiratorial conduct involving new technologies, such as algorithms, it is important to maintain a dialogue on these new issues facing enforcers, Finch advised.

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