The Justice Department's Antitrust Division has taken the unprecedented step of recruiting from Brussels a top adviser for international matters.
Many speculate that Rachel Brandenburger's recruitment will both mend the somewhat strained relationship between European Union antitrust authorities and the DOJ, as well as signal to the global community the DOJ's sincerity in fostering cooperation in criminal antitrust matters internationally.
The appointment of Brandenburger, who was a partner at Freshfields Bruckhaus Deringer LLP in the firm's Brussels and London offices, may be a sign of the times as antitrust authorities are increasingly confronted with global issues: cross-border mergers, international cartels and abuse-of-dominance investigations taking place on different continents.
More than 100 countries now have antitrust regimes, and more than 24 have criminalized cartel activity. Some of these jurisdictions provided for even greater maximum jail terms than did the U.S., at least until the recent passage of the Antitrust Criminal Penalty Enhancement and Reform Act of 2004. There has been a growing worldwide consensus that international cartel activity is pervasive and victimizing businesses and consumers everywhere. This shared commitment to fighting international cartels has led to the establishment of cooperative relationships among competition law enforcement authorities around the world. Christine Varney, the assistant attorney general for antitrust at the DOJ, has promised cooperation with worldwide antitrust authorities to promote the growth of a "healthy free market both at home and abroad." Varney has demonstrated strong support for President Obama's clear objective of re-energizing antitrust enforcement, especially on the international front.
At the end of 2009, the DOJ had 144 pending grand jury investigations, and the number of active investigations can be expected to increase.
As such, antitrust enforcement by the DOJ and enforcement agencies abroad will continue aggressively. In June, the Canadian Competition Bureau fined airlines in an air cargo investigation. Four carriers admitted to fixing surcharges on certain routes from Canada during the relevant time period. Specifically, three of the companies communicated directly with competitors regarding the amount and timing of fuel surcharges.
These fines amounted to approximately C$10 million ($9.6 million). With the latest reports that Russia is opening the door to criminal antitrust enforcement actions with a new law imposing as many as seven years in prison, U.S. businesses may be subject to both DOJ and international scrutiny. And antitrust enforcement is not limited to the Americas and Europe. Of late, South Korea, China, India and Pacific Rim countries have actively pursued antitrust enforcement.
According to an October speech in Brazil by outgoing European Competition Commissioner Neelie Kroes, the key to cogent cooperation among enforcement agencies is finding ways the agencies can complement each other. Coordination of inspections, respect of confidentiality, as well as creating functional working relationships among the various agency staff were examples cited to ensure that this kind of teamwork functions well.
The EU is undoubtedly serious about its antitrust crackdown, evidenced by issuing $2 billion in fines in 2009 alone.
Yet there are many potential bumps in the road that hinder full international cooperation.
Numerous issues involving the sharing of confidential information exist between international agencies. Furthermore, not all international programs offer the same leniency or amnesty standards. For international cooperation to run smoothly, agencies will need to ensure that the programs are aligned.
Despite these potential bumps, the prospect for improved cooperation among international antitrust agencies remains strong. The U.S.'s unprecedented and unexpected move in hiring Brandenburger is another step forward on this path, with the result that cross-border antitrust counseling will remain vitally important.
Donna A. Bucella, of counsel with Foley & Lardner LLP, previously served as a senior official in both the Department of Justice and Homeland Security. Gregory E. Neppl, a partner with the firm, previously served as a trial attorney with the Antitrust Division of the DOJ. Christina Kennedy is an associate with the firm.