Competition agencies already co-operate in investigations and merger cases – but how they co-operate can vary and the lived experience in one matter can be different in the next.
The newly signed co-operation agreement between the Five Eyes signals an intention on the part of competition agencies to co-operate more, and in a more transparent way, about companies in relation to cross-border antitrust investigations and merger control. As a step toward recording publicly existing co-operation practices, the principles outlined between the competition agencies signal an effort toward more transparent co-operation in a globalised economy. An understanding of the framework set by the agreement will be helpful in giving companies more certainty when making decisions in response to co-operation requests and understanding the implications of that co-operation.
Overview
The competition agencies of Australia (Australian Competition and Consumer Commission), the United States (Department of Justice/Federal Trade Commission), the United Kingdom (Competition and Markets Authority), Canada (Competition Bureau) and New Zealand (Commerce Commission) (Parties) have signed the Multilateral Mutual Assistance and Co-operation Framework for Competition Authorities (MMAC).
The MMAC is a memorandum of understanding which provides a framework for co-operation as well as the entry into bilateral or multilateral arrangements between the Parties based on the Model Agreement at Annexure A to the MMAC.
What this means for corporates and individuals doing business in Australia
The MMAC signals increased and more seamless co-operation between the Parties on areas including antitrust investigations, merger control, areas of future enforcement and competition policy.
As shown by the proposed acquisition of Fitbit by Google resulting in concurrent reviews by the ACCC, the European Commission and the US Department of Justice, companies should be aware that competition agencies around the world share information between each other, especially in connection with merger clearance or market studies, and perhaps to a lesser extent, cartel investigations, with a global reach.
This means that companies must ensure adopting a careful balancing exercise between:
- responding to a local competition agency's requests for waivers as each agency will have idiosyncratic issues to consider or prioritise for its own domestic market; and
- ensuring broader consistency – for example in a joint cartel defence or merger clearance review – taking into account the fact that interactions with an agency in a particular jurisdiction in one way may affect investigations in another jurisdiction.
An additional consequence of interagency co-operation and concurrent reviews is that agencies may hold off from publishing a decision or agreeing on a remedy until all agencies in each relevant jurisdiction have made a decision on that particular issue, further adding uncertainty to companies involved.
What remains to be seen is how much co-operation between the Parties will reflect what is in the Model Agreement, or diverge from current practice. For example, while the MMAC notes that the Parties intend to deliver the maximum co-operation possible, it also acknowledges that the Parties may not be able to meet every element of the co-operation framework set out in the Model Agreement; and that the Parties may enter into bilateral or multilateral agreements to co-operate.
Key provisions of the MMAC and the Model Agreement
Information to be shared between Parties is defined in the MMAC as:
- Agency Confidential Information. Information that is in the possession of a Party that it is not prohibited from disclosing by law, but normally treats as non-public.
- Investigative Information. Information related to an investigation that is not in the public domain, which has been either compulsorily acquired by, or provided voluntarily to, a Party and that the Party is required to protect from disclosure.
Some types of co-operation contemplated under the MMAC by the Parties include:
- exchanging information and experience on competition issues, policies, laws, and advocacy and outreach;
- increasing agency capacity and effectiveness by way of mutual sharing of training and best practices;
- collaborating on projects of mutual interest through working groups; and
- providing assistance and co-operation on investigations by:
- sharing confidential information subject to certain protections, limitations on use and privilege);
- coordinating investigations;
- facilitating voluntary witness interviews; and
- other co-operation as requested.
As noted above, the Parties have also developed the Model Agreement in order to assist the Parties to enter into a more detailed agreement for reciprocal investigative assistance, either bilaterally or multilaterally.
Examples of such investigative assistance contemplated by the Model Agreement include:
- disclosing, providing or discussing Investigative Information to the extent possible under each Party's laws; and
- obtaining Investigative Information at the request of a Party by: (i) facilitating witness interviews; (ii) obtaining Investigative Information; (iii) locating witnesses or things; and (iv) executing searches and seizures.
The Model Agreement broadly provides that the requesting Party provides, in writing, a description of the assistance it seeks and to the extent necessary, any procedural or evidentiary requirements which need to be observed (for example, recording of witness statements, process for obtaining oaths, retention of privilege and confidentiality issues, records authentication, obligation of the requesting Party to retain Investigative Information).
The Parties are to also generally discuss the procedures in executing the request and whether there are any legal requirements and processes for obtaining and handling any Investigative Information.
There are also protections and protocols in place in the Model Agreement pertaining to the handling of information shared between the Parties under the Model Agreement. These include provisions relating to the following:
- Return or destruction of documents. Parties are to return or destroy all Investigative Information at the request of the Party which provided that Investigative Information, at the conclusion of a matter.
- Privileged communications. If information shared by a Party pursuant to a request for investigative assistance is later found to be privileged, then the Party which receives that privileged information is to not use it for the purposes of enforcement and use all appropriate procedures to limit the disclosure of such information in other contexts (unless it is determined after discussions with the Party which provided that information, that any such privilege has been waived or otherwise lost).
- Denying or postponing assistance. A Party responding to a request for investigative assistance may deny or postpone the assistance in whole or in part if, among other things, the request would: (i) exceed its reasonably available resources; (ii) be contrary to its law or other important interests; or (iii) the requesting Party is unable to give assurances with regard to confidentiality or the purposes for which the information will be used.
- Confidentiality. The Parties will, to the fullest extent possible and consistently with its laws, maintain confidentiality of any Investigative Information including the fact that a request for Investigative Information has been communicated or received.
- Limitation of use. Subject to certain exceptions, Investigative Information received by way of a request for assistance must only be used for the purposes enforcing competition laws (whether for the matter for which the information was sought, or for another competition enforcement matter).
Building on existing practices
The MMAC complements the other forms of mutual assistance already in place, for example:
- Treaties. Australia and the United States have treaties in place to exchange evidence and assist each other in relation to matters involving competition law enforcement activities.
- Memoranda. The memorandum of understanding recently entered into between the ACCC and the Australian Prudential Regulation Authority (APRA) the purpose of which is to promote a competitive, well-regulated and stable financial system in Australia by way of the two agencies coordinating, co-operating and sharing information on the back of a transparent and collaborative relationship.
Also, the ACCC signed a memorandum of co-operation in 2019 with the United States' Federal Bureau of Investigation with a view to enhance the two agencies' capabilities in investigating criminal antitrust conduct by way of mutual training and exchange of information.
- Other frameworks. The Organisation for Economic Co-operation and Development, and the International Competition Network provides a forum for competition agencies to engage on policy and provide recommendations to one another about matters including international co-operation between competition agencies.