Global Convergence in Merger Review Promoted

Organization
Objectives
Merger Review Group

The recent globalization wave, resulting in the emergence of 'mega-mergers' that affect economies and are subject to merger review worldwide, has increased the need for convergence of competition policy and enforcement. To address this and related issues, the International Competition Policy Advisory Committee to the US Department of Justice was formed in November 1997. In its February 2000 report the committee recommended in part that the United States "explore the scope of collaboration among interested governments and international organizations" to create a new framework where government officials, private firms and others can interact. The idea of setting up an international venue for global antitrust convergence was initially endorsed by then Assistant Attorney General Joel Klein, and later by current Assistant Attorney General Charles A James and Federal Trade Commission Chairman Timothy J Muris, whose support expedited the birth of the International Competition Network (ICN) on October 25 2001 in New York.

On February 15 2002 the ICN Merger Review Group held its first meeting in Paris, France. The Merger Review Group will work in parallel with the Organization for Economic Cooperation & Development (OECD) on the harmonization of merger control procedures worldwide. The first results, universal guidelines for the notification of proposed mergers, are expected in the autumn of 2002.

Organization

The ICN will convene annually, and its first full meeting will be held in Italy in September 2002. At these annual meetings the ICN will discuss the status of ongoing projects, ensure that progress is being made in the different working groups, and issue non-binding recommendations for consideration by national competition watchdogs.

The ICN unites antitrust authorities from all over the world in a virtual structure that facilitates low-cost ongoing dialogue, organized around a steering committee and based on project-driven working groups. As emphasized by the assistant attorney general, the ICN is not a 'bricks-and-mortar' organization with a permanent secretariat or headquarters. Instead, the members of the working groups will use telephones, fax machines, video conferences and the Internet to work together whenever needed.

Currently its membership is not open to industry representatives, private practitioners or members of the academic community. However, the ICN's chairman, Konrad Von Finckenstein of the Canadian Competition Bureau, has stated that the private sector will be involved in the different working groups and could attend the annual meetings. Private groups - including the American Bar Association (ABA), the International Bar Association (IBA) and the Merger Streamlining Group, composed of major multinational companies - are participating in ICN discussions.

Objectives

The ICN recently announced that it would initially concentrate on the need for greater convergence of merger control procedures as well as the competition advocacy role of regulating agencies.

The ICN is not expected to create antitrust rules, and nor will it tackle any 'doctrinal' divergences of opinion that affect conglomerate mergers and may lead to different results in United States and the European Union, as in the recent GE/Honeywell merger. However, as the chairman of the Federal Trade Commission has stated, "the ICN will enable our respective agencies to improve competition, coordination and law enforcement to the benefit of consumers throughout the world". The ICN is one of several efforts the US antitrust authorities are making to coordinate more effectively with other antitrust agencies around the world to reach some 'soft' substantive antitrust convergence and establish best practices. The ICN is also likely to be engaged in combating international cartels.

Merger Review Group

The ICN Merger Working Group, chaired by William J Kolasky of the Department of Justice, was created to develop best practice recommendations for reviewing multi-jurisdictional mergers, resulting in:

• more effective merger review mechanisms;
  
  
• procedural and substantive convergence of these mechanisms worldwide; and
  
  
• a reduction in time and cost of multi-jurisdictional merger review.

During its first meeting at the OECD in Paris on February 15 2002, the Merger Working Group agreed on a four-point action plan, according to which it will endeavour to:

• recommend to the ICN a set of guidelines for the notification and review of proposed mergers by Spring 2002;
  
  
• establish an inventory of the merger laws of as many countries as possible, which will be posted on the ICN website (www.internationalcompetitionnetwork.org);
  
  
• compile a database on the costs and burden of merger notification and review by Spring 2002; and
  
  
• draft 'best practices' guidelines for merger review procedures, promoting clear and objective thresholds, sufficient nexus with reviewing jurisdictions and flexibility in timing of filing. The ABA, IBA and Merger Streamlining Group are contributing to the 'best practices' efforts.

The first recommendations are likely to be approved by the annual ICN meeting in September 2002.

For further information on this topic please contact Janet McDavid or Catriona Hatton at Hogan & Hartson LLP by telephone (+1 202 637 5600) or by fax (+1 202 637 5910) or by email (JLMcDavid@HHLAW.com or Chatton@HHLAW.com).