Schiff Hardin LLP Antitrust and Trade Regulation Alert

Recent Developments Outside the United States Highlight Competition Law's Reach

Businesses with activities outside the United States need to be aware that other jurisdictions have strong antitrust laws with active enforcers too. While those laws and their enforcers are similar to those in the United States, there are important distinctions — for instance, that most such laws are known as "competition laws." We can help such clients through our years of experience and connections with our network of overseas cooperating counsel through TerraLex®. This alert highlights developments in Canada, the European Union, China, the United Kingdom and Australia.

The Canadian Competition Bureau ("Bureau") finalized its Abuse of Dominance Enforcement Guidelines ("Guidelines") on September 20. This short document finalizes the draft Guidelines published for comment earlier this year and replaces all earlier Guidelines from the Bureau on the subject. Canada's "abuse of dominance" is similar to the United States' "monopolization" in that both apply only to actors who have significant market power and who are taking certain bad actions. The Guidelines state that a market share above 50 percent generally is a necessary, though insufficient, condition to a finding of market power. The Guidelines highlight that Canada's list of "bad actions" is longer than that of the United States; for instance, the law and Guidelines recognize margin squeezes as an example of an anti-competitive act, contrary to the U.S. Supreme Court's Linkline ruling. The issuance of the Guidelines was one of the last actions of the Bureau before the departure of Melanie Aitken as its commissioner. John Pecman, an economist by training and long-time Bureau official, has been named interim commissioner. The Guidelines can be found on the Bureau's Web site here.

The European Commission, on behalf of its Directorate General for Competition, signed a cooperation agreement with China's National Development and Reform Commission and the State Administration of Industry and Commerce, two of China's three competition law enforcement agencies, on September 20. The agreement calls for exchanges of non-confidential information related to legislation and investigations related to cartels, other restrictive agreements and abuses of dominance. The EU already has a cooperation agreement with China's Ministry of Commerce, the third enforcement agency and the one responsible for the enforcement of the merger provisions of China's Anti–Monopoly Law. This agreement is another example of cooperation among the enforcement agencies that leads to more effective and efficient enforcement of the competition laws around the globe.

Earlier in September, the UK Office of Fair Trading ("OFT") updated its guidance on how it will determine appropriate fines for violations of the UK Competition Act and the EU's Articles 101 and 102. The OFT increased the upper limit from 10 to 30 percent of the relevant turnover of revenue involved in the violation. On the other hand, the OFT said it would consider a reduction of up to 10 percent for the presence of an otherwise effective compliance program (a position United States agencies have been unwilling to take). The OFT had posted a series of videos on its Web site explaining the importance of compliance programs and illustrating a "dawn raid" on the offices of a suspected violator.

Not to be outdone, the Australian Competition and Consumer Commission posted a video entitled "The Marker" on its Web site in late August. With the production qualities of a feature film, the video dramatizes the harms inflicted by cartels on both their victims and participants. While the accents might be different, the relevant Australian laws are not and the video can be an effective way to illustrate to American businesspeople the legal dangers of improper communication with competitors.

For further information on these topics, please contact Steve Cernak, scernak@schiffhardin.com Bill Hannay, whannay@schiffhardin.com, Matthew Mock, mmock@schiffhardin.com or another member of Schiff Hardin LLP's Antitrust and Trade Regulation Practice Group.

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