Today competition occurs in a global market with little regard to national borders. Enforcing national competition laws with limited extra-territorial reach is a difficult task for regulators everywhere. To deal with this, competition authorities are sharing information and co-operating, formally and informally, with counterpart regulators in other jurisdictions. This article focuses on the enhanced co-operation arrangements which have recently been put in place between Australia and New Zealand.
The Australian position
For many years, the Australian Competition and Consumer Commission (ACCC) has engaged with its counterparts in various jurisdictions on cross-border cartel and foreign-to-foreign merger matters. Historically, this engagement has been with competition agencies in jurisdictions with well-developed competition laws such as the United Kingdom, Europe, Japan, South Korea, Canada, the United States and New Zealand.
However, with the introduction of competition laws in many growing Asian economies – including Singapore, India and Malaysia – this engagement is expanding. Australia is very consciously taking a leadership role in the Asia-Pacific region by sharing ideas and information with competition and consumer agencies on how to combat anticompetitive behaviour and consumer issues arising from online selling.
Although the ACCC regularly and actively liaises with the US and European regulators on matters of procedure and approach in the areas of cartel and merger enforcement, it mostly receives case-related information from (rather than providing it to) overseas competition agencies.
In the cartel context, this has largely been due to the fact that overseas agencies have led the way in enforcing against multinational cartels, and enforcement actions in Australia have largely followed such actions. The ACCC has also wanted to preserve the incentive for cartelists to break ranks by protecting the confidential information provided to it by immunity applicants under its immunity policy for cartel conduct.
In foreign-to-foreign mergers, the offshore nature of these transactions and the ACCC’s focus on the likely effect of the deal on a market in Australia has generally meant that the information it collects and holds is not relevant to, and therefore not requested by, overseas competition agencies.
New Zealand’s position
For the New Zealand Commerce Commission (NZCC), the story is much the same. Although it does from time to time receive case-related information from overseas competition agencies in cartel and merger enforcement matters, to date its engagement and co-operation with other competition agencies has been limited, and mostly of a general nature, for both policy and legislative reasons.
On the policy side, like the ACCC, the NZCC has been unwilling to compromise the integrity of its cartel leniency policy by disclosing confidential information provided by the leniency applicant without consent. On the legislative side, the restrictions placed on the disclosure of information to overseas competition regulators by government agencies such as the NZCC have had a chilling effect on the ability and willingness of NZCC to seek to share information obtained from its investigations.
New Zealand recently enacted the Commerce (International Co-operation, and Fees) Amendment Act 2012 (NZ) (the Cooperation Act). This is a concerted effort to get greater cooperation between the NZ Commerce Commission and overseas competition regulators, especially the ACCC.
Objective of the Co-operation Act
The objective of the Co-operation Act is to facilitate increased collaboration between the NZCC and ACCC, and to enable enhanced co-operation by the NZCC with overseas regulators.
This objective is served by breaking down the traditional jurisdictional barriers that hinder the flow of information between competition agencies investigating potentially anticompetitive conduct arising out of the same or a similar factual matrix, and having a significant anti-competitive impact, under national laws. The new provisions are aimed at increasing the efficiency of investigations, particularly those involving cross-border cartel conduct.
Key provisions of the Co-operation Act
Broadly, the provisions of the Co-operation Act empower the NZCC to provide compulsorily acquired information and investigative assistance to an “overseas regulator”, pursuant to a co-operation agreement with a recognised overseas regulator.
A co-operation agreement must identify the “overseas regulator”, the foreign enactments under which the recognised “overseas regulator” may seek “compulsorily acquired information” or investigative assistance, and the manner in which the information may be used and secured.
An “overseas regulator” is defined as a regulator that has competition law functions that correspond to those of the NZCC, and will be deemed as such upon entry into a cooperation agreement with the NZCC. “Compulsorily acquired information” is information and documents that the NZCC obtains under a statutory notice and which is not otherwise in the public domain.
Where a co-operation agreement with an overseas regulator is in place, the NZCC is empowered to provide information upon request of that regulator. Where such a request is made, the NZCC must be satisfied that (1) providing the information or assistance will, or is likely to, assist the recognised overseas regulator in performing its functions or exercising its powers in relation to competition law; and (2) the provision of the information or assistance will not be inconsistent with the co-operation agreement; and (3) the provision of the information or assistance will not significantly prejudice New Zealand’s international trade interests.
The NZCC must also consider whether (1) complying with the request will substantially affect its ability to perform its other functions; (2) the overseas regulator could more conveniently obtain the information or help from another source; and (3) the request would, in the NZCC’s opinion, be more appropriately dealt with under criminal mutual assistance legislation.
The NZCC may not provide statements that could incriminate an individual in another jurisdiction unless the overseas regulator gives an undertaking not to use the statement in criminal proceedings (other than in respect of the falsity of the individual’s testimony in that other jurisdiction), or in civil pecuniary penalty proceedings against the individual.
Where the NZCC shares any compulsorily acquired information with a recognised overseas regulator, the NZCC must, as soon as practical afterwards, notify the person from whom the information was acquired and every person to whom the information relates. There is no obligation to inform the relevant people in advance of the provision of information, nor is there any obligation to accept submissions from such people about the provision of their information.
The NZCC may also impose conditions relating to maintaining the confidentiality of any information provided, as well as conditions regarding the storage, use, access to, copying, returning and disposal of the information provided.
Similar provisions in Australia
In Australia, there are Competition and Consumer Act (CCA) provisions which permit the ACCC to disclose similar types of information in specified circumstances. The Australian provisions are part of a series of amendments which were made with the intention of providing a statutory basis for the ACCC to maintain confidentiality over information which it receives about possible breaches of the CCA. As part of those amendments, the ACCC was given power to make certain disclosures.
The provisions apply to “protected information” which relevantly includes (1) information that was given in confidence to the ACCC that relates to a matter arising under the provisions of the CCA concerning restrictive trade practices, resale price maintenance, consumer law and anticompetitive conduct or access to the telecommunications industry; (2) information obtained by the ACCC by the exercise of its statutory powers for the compulsory provision of information, evidence and documents; and (3) information that was given in confidence to the ACCC by a foreign government body and relates to a matter arising under a provision of a law of a foreign country or of a part of a foreign country.
The ACCC is permitted to disclose protected information to a foreign government body where the chairperson of the ACCC is satisfied that disclosure would assist the foreign government body to exercise its functions or powers. A foreign government body includes the government of a foreign country or an agency or authority of a foreign country, such as the NZCC.
As part of the disclosure, the chairperson of the ACCC may, by writing, impose conditions in relation to protected information, including permitted forms of storage or use of the information provided.
Differences in the legislation
There are key differences between the Australian and New Zealand disclosure regimes. The CCA does not (1) impose the same requirement that disclosure of protected information be made pursuant to a co-operation agreement as contemplated under the Co-operation Act; (2) stop the ACCC from providing statements that may incriminate an individual in another jurisdiction; or (3) impose a requirement on the ACCC to tell the people from whom the information was acquired – or the people to whom the information relates – about the disclosure.
The Co-operation Act enhances the relationship between the ACCC and NZCC by making it easier for both regulators to obtain and exchange information to address trans-Tasman competition law issues. This operates in combination with existing co-operation mechanisms, and in particular cross-appointments between the ACCC and the NZCC. Dr Jill Walker, a member of the ACCC, is an associate commissioner at the Commerce Commission and Dr Mark Berry, the Commerce Commission chair, is an associate member of the ACCC.
Other co-operation mechanisms include the following:
- Mutual assistance legislation (MAL). Under 1992 legislation, Australia can assist foreign regulators by obtaining relevant evidence for purposes relating to the administration and enforcement of a “foreign business law”. As and when criminal penalties for cartel conduct are introduced into the Commerce Act 1986 (NZ), the ACCC and NZCC will also be able to request mutual assistance under the MAL applying to criminal matters in each country.
- Co-operation arrangements. The ACCC and NZCC have already agreed co-operation arrangements for merger reviews and other competition law issues. The two regulators are also parties to informal and non-binding co-operation arrangements with the competition agencies of Canada, Taiwan and the UK.
- Confidentiality waivers. In cross-border cartel and merger cases, the ACCC and NZCC commonly request confidentiality waivers to disclose information to each other and others.
- Regular interagency communication. In 2011, the ACCC, NZCC and the Competition Commission of Singapore agreed to participate in a monthly teleconference to discuss case investigations of interest and other key issues.
From a New Zealand perspective, the Co-operation Act removes the prior constraints on the NZCC providing compulsorily acquired information and investigative assistance to the ACCC and other overseas competition law agencies. By ensuring that the NZCC is able to provide reciprocal information and assistance, it also increases the likelihood of overseas competition agencies being willing to co-operate with NZCC requests.
In this era of increased focus on global co-operation and coordination in competition law enforcement through organisations such as the International Competition Network and the Organisation for Economic Co-operation and Development, it is difficult to disagree with the ACCC’s description of the Cooperation Act as setting “the global standard for ensuring regulators are empowered to co-operate to address cross-border competition, consumer and telecommunications issues”.
This article was first published in Competition Law Insight, 22 January 2013