International cooperation in cartel enforcement An OECD perspective Antonio Capobianco Senior Competition Expert, OECD Competition Division I CN Annual Conference, Sydney 2015

Trends in globalisation and on the spread of competition law enforcement Increasing number of multi-jurisdictional cases and increasing complexity of enforcement co-operation Some findings from the 2013 OECD/ICN Survey A description of the innovative aspects of the 2014 OECD Recommendation on international co-operation A couple of personal remarks on where we could go next Structure of the presentation 2

The world economy rebalances Share of world GDP Source: OECD data and projections % 48% 38%

Bear in mind that globalization still has a long way to go! Gross exports. Source: Johansson and Olaberria, “Long-run patterns of trade and specialisation”, OECD Economics Working Paper

5 Spread of competition law enforcement Source: OECD

EU International Merger filings 6

The geographical distribution of EC cartel cases since 1990 Source: OECD 7

Complexity of co-operation As the number of agencies involved grows and the number of cross border cases increases, the current system may prove insufficient or inefficient. –Cases may involve agencies which do not have a co-operation agreement –Also, these co-operation agreements may be different in scope and provide for different co- operation tools # of authorities Interfaces of co- operation , ,950 8

Complexity of co-operation As the number of agencies involved grows and the number of cross border cases increases, the current system may prove insufficient or inefficient. –Cases may involve agencies which do not have a co-operation agreement –Also, these co-operation agreements may be different in scope and provide for different co- operation tools # of authorities Interfaces of co- operation , ,950 9

Complexity of co-operation As the number of agencies involved grows and the number of cross border cases increases, the current system may prove insufficient or inefficient. –Cases may involve agencies which do not have a co-operation agreement –Also, these co-operation agreements may be different in scope and provide for different co- operation tools # of authorities Interfaces of co- operation , ,950 10

Examples of cross-border investigations Air Cargo Investigations by USDOJ, EC, Australia, Canada, and Korea following co-ordinated dawn raids Resulted in over $1.7 billion fines in US, over €799 million fines in EU etc. Marine Hose Investigations by USDOJ, EC, UK, Australia, Japan, Korea Unprecedented level of co-operation: involved exchange of confidential information, co-ordination of remedies, extradition Automobile parts Investigation by more than 10 authorities following co- ordinated dawn raids Resulted thus far in over $2.3 billion fines in US, over €1.1 billion fines in EU etc. 11

Complexity of co-operation As the number of agencies involved grows and the number of cross border cases increases, the current system may prove insufficient or inefficient. –Cases may involve agencies which do not have a co-operation agreement –Also, these co-operation agreements may be different in scope and provide for different co- operation tools # of authorities Interfaces of co- operation , ,950 12

Developed based on the result of the OECD/ICN joint survey. –The survey was addressed to 120 competition agencies around the world and received 57 responses which were used in analysis. The report analyses, for example; – Legal basis for and experiences with formal co-operation – Experiences in international co-operation – Regional and multilateral co-operation – Limitation and constraints –Exchange of information and confidentiality waivers – Suggestions for future work OECD/ICN Survey on International Enforcement Co-operation (2013) Available at: http :// international-cooperation-survey.htm 13

Experience with international co-operation # of cases reported by agencies # of agencies with any experience Cartel Merger Abuse of Dominance Number of Cases in which Agencies had Co-operated, by Enforcement Area ( ) 14

The number of cases involving international co-operation has increased over time Respondents expect the frequency of international co-operation to continue to increase, due in part to growth in the number of multi- jurisdictional cases Experience with International Co-operation Increase in Cases Involving Co-operation ( ) Cartel15% Merger35% Abuse of Dominance30% 15

Experience with international co-operation Number of Cases in Which Agencies had Co-operated ( ) 16

17 Source: Michal S. Gal, "Antitrust in a Globalized Economy: The Unique Challenges of Small and of Developed Economies, 33 Fordham International Law Journal 1-56 (2009) Number of international/global cartels cases brought by small agencies over a period of 5 years Global cartels are investigated by a limited number of jurisdictions

Adopted by OECD Council on 16 September It revises the 1995 Recommendation. The revision process: 18 Recommendation on International Co-operation (2014) WP3, October 2013 WP3, February 2014 CC+ WP3, June 2014 OECD Council, September 2014 A drafting team worked on the draft Recommendation to be discussed at the WP3 in February BIAC (business voice to the OECD) was involved in the discussion on drafts. The drafting team continued to work on the draft and developed another revised draft for the approval at the June meeting. BIAC continued to be consulted during the process. The new recommendation was approved.

The new recommendation recognises the benefits of effective co-operation not only for competition authorities as well as for businesses. –Reducing regulatory costs and delays, limiting the risk of inconsistent analysis and remedies Main points: –Members’ commitment to effective international co-operation –Consultation and Comity –Notification procedures –Coordination of parallel investigations –Exchange of information –Investigative assistance Recommendation on International Co-operation (2014) Available at: coop-competition-2014-recommendation.htm 19

The new recommendation recognises the benefits of effective co-operation not only for competition authorities as well as for businesses. –Reducing regulatory costs and delays, limiting the risk of inconsistent analysis and remedies Main points: –Members’ commitment to effective international co-operation –Consultation and Comity –Notification procedures –Coordination of parallel investigations –Exchange of information –Investigative assistance Recommendation on International Co-operation (2014) Available at: coop-competition-2014-recommendation.htm 20

Members’ commitment to effective international co-operation OECD Recommendation on International Co-operation (2014): Adherents commit to effective international co-operation and take appropriate steps to minimise direct or indirect obstacles or restrictions to effective enforcement co-operation between competition authorities. OECD Recommendation on International Co-operation (2014): Adherents commit to effective international co-operation and take appropriate steps to minimise direct or indirect obstacles or restrictions to effective enforcement co-operation between competition authorities. Minimising the impact of legislation and regulations that might restrict co-operation or hinder an investigation or proceeding of other countries Transparency of respective substantive and procedural rules Reducing inconsistencies between their leniency or amnesty programmes 21

22 Exchange of confidential information International agreements (second generation agreement) Australia-US (1999) EU-Swiss (2013) NZCC-ACCC (2013) Nordic countries (2001) European Competition Network (2004) National provisions Australia (Section 155AAA) Canada (Section 29) Germany (§ 50) UK (Section 243) OECD Recommendation on International Co-operation (2014): Adherents should consider promoting the adoption of legal provisions allowing for the exchange of confidential information between competition authorities without the need to obtain prior consent from the source of the information (“information gateways”). OECD Recommendation on International Co-operation (2014): Adherents should consider promoting the adoption of legal provisions allowing for the exchange of confidential information between competition authorities without the need to obtain prior consent from the source of the information (“information gateways”).

Investigation assistance may include: –Providing public information –Assisting in obtaining confidential information –Employing its authority to compel the production of information in the form of testimony or documents on behalf of the other authority –Ensuring the service of official documents of the other authority –Executing searches on behalf of the other authority 23 Investigative assistance OECD Recommendation on International Co-operation (2014): […] competition authorities of the Adherents should support each other on a voluntary basis in their enforcement activity by providing each other with investigative assistance as appropriate and practicable, taking into account available resources and priorities. OECD Recommendation on International Co-operation (2014): […] competition authorities of the Adherents should support each other on a voluntary basis in their enforcement activity by providing each other with investigative assistance as appropriate and practicable, taking into account available resources and priorities.

The OECD Recommendation is aspirational! It is about complying with the letter but also with the spirit of the Recommendation Agencies are called to think as policy makers not as current enforcers It is about building a co-operation platform for the future Is there room for new forms of co-operation? –One-stop-shop system for markers? –Best/better placed agency(ies)? –Recognition of foreign decisions? This is a complex area with important challenges, but it is an area where OECD and ICN can join forces 24 What next?

Antonio CAPOBIANCO, Senior Competition Expert : Please visit: operationandcompetition.htm Thank you very much for your attention! The views expressed in this presentation are solely those of the author and do not necessarily reflect the views of the OECD or its Members. 25

International co-operation in cartel enforcement An OECD perspective Antonio Capobianco Senior Competition Expert, OECD Competition Division I CN Annual Conference, Sydney 2015