By E. Darius Sturmer, J.D.
International coordination and cooperation in antitrust enforcement "are more important than ever" in today’s interconnected world, according to Deputy Assistant Attorney General Roger Alford of the Justice Department’s Antitrust Division. In remarks entitled "Antitrust Enforcement in an Interconnected World," offered to the American Chamber of Commerce in Seoul, South Korea, on January 29, 2018, Alford discussed the increasingly international scope of antitrust enforcement, cautioning that "enforcers who do not consider the global impact of their enforcement decisions can create inefficiencies that ultimately harm consumers throughout our interconnected world."
While Alford credited the South Korean government for the country’s economic success over the past several decades, he pointedly chided that international comity "required a degree of policy cooperation as to the interests of other affected jurisdictions" and "counsel[ed] governments to respect the needs of international commerce and be sensitive to the interests of other sovereigns[.]"
South Korea’s economic success. Referencing the upcoming Winter Olympics in South Korea, Alford observed how much change has occurred in the political, military, and economic landscapes around the world—and in South Korea as well—since the last time the nation hosted the Games, in the Summer of 1988. Alford praised the country’s economic growth and success over that period, noting its increase in per capita income from less than $5000 in 1988 to $35,000 today, and its high rankings in the world’s rule of law index and other measures. "South Korea has transformed itself into a prosperous, stable, vibrant democracy . . . ‘the most unlikely and impressive story of nation-building of the last century,’" he said.
South Korea’s successes "exemplify three key lessons about government’s role in building a strong economy," Alford stated: the significance of market-based legal reforms to economic growth; the importance of fostering innovation through regulation and enforcement; and its recognition of global connections. The country "has repeatedly demonstrated the ability and perseverance to tackle market-based reforms that have paved the way for renewed growth," Alford lauded. Further, it has created regulatory and enforcement structures the support market investment and continues to work toward a stronger rule of law offering transparency and predictability to potential investors in the market. "Commitment to rule of law, support for innovation, and recognition of our global connections […] are key pillars of sound antitrust law," Alford observed. He credited Korean firms’ development and manufacturing of technologies so vital to the global economy.
Rule of law. Alford’s focus, however, was on the importance of the rule of law in antitrust enforcement. He expressed concerns about some of the hurdles that continue to undermine agency effectiveness "in certain countries." Without international coordination and cooperation, "the uncertainty associated with divergent approaches to enforcement has potentially significant costs for globally active companies, and the risks of inconsistent and potentially conflicting remedies are high," Alford explained.
Comity. Alford noted that the two U.S. agencies’ recently updated "Antitrust Guidelines for International Enforcement and Cooperation," addressed the application of U.S. antitrust law to conduct outside the United States, enumerating several factors and other comity considerations that should be taken into account before pursuing an enforcement action or seeking a remedy that might have impacts outside the United States. Alford emphasized that the Guidelines and the U.S. Supreme Court have made clear that the U.S. antitrust laws apply to extraterritorial conduct that has a substantial and intended effect domestically. "It is also clear," Alford said, "that where necessary to address U.S. harm, the U.S. antitrust agencies can impose remedies that go beyond U.S. borders." When the Antitrust Division does so, he advised, it looks carefully at whether the proposed remedy is necessary to redress harm or threatened harm to U.S. commerce and customers and whether it is consistent with international comity.
In conducting its comity analysis, the Antitrust Division considers the degree of conflict with a foreign jurisdiction’s law or articulated policy and the extent to which enforcement activities of another jurisdiction—including remedies resulting from those enforcement actions—may be affected, Alford continued. "It behooves us to recognize that conduct we condemn abroad may affect international commerce and impact the power of other nations to grant rights to their subjects and regulate conduct within the scope of their authority."
"In sum," Alford stated, "in order for antitrust enforcement to respond to an increasingly interconnected world of concurrent authority, antitrust enforcers cannot simply ignore the impact their remedies may have on other jurisdictions. It is not enough to engage in case cooperation with other jurisdictions that are pursuing an investigation of the same matter." Nor was it enough to ask whether the parties were "between a rock and a hard place, unable to comply with competing commands."
"Comity also requires a degree of policy cooperation as to the interests of other affected jurisdictions," Alford declared. "In the specific context of the U.S.-Korea relationship, that means abiding by our commitment from 2015 to regularly consult with one another and keep each other informed of significant enforcement developments and policy changes."
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