Stutz Testifies on International Competition Policy Before House Antitrust Subcommittee

On June 29, 2017, AAI Associate General Counsel Randy Stutz testified at an oversight hearing of the House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law. The hearing, entitled “Recent Trends in International Enforcement,” focused on a recently published report issued by the U.S. Chamber of Commerce.  Stutz’s prepared testimony on behalf of the AAI is available here.

The Chamber commissioned the report by a panel of international competition and trade experts in response to allegations by U.S. multinationals that foreign competition agencies have been committing due process violations, enforcing their laws in discriminatory ways, and imposing inappropriate extraterritorial remedies. These issues were explored in detail at the AAI’s International Antitrust Roundtable in February 2017. A Summary Report of the roundtable discussion is available here.

The Chamber’s report recommends addressing foreign enforcers’ alleged misuse of competition law by creating a White House working group comprised of multiple representatives from U.S. competition and trade agencies. The working group would examine the interplay between international trade and competition laws and assume responsibility for setting government-wide U.S. policy for addressing international competition issues.

The AAI notes that the report does a good job of laying out a vision for better coordination among trade and competition agencies, but takes exception with the concept of transferring government-wide responsibility for setting international competition policy to a White House working group.

The AAI argues that it is important to distinguish between a foreign enforcer’s bad faith denial of fundamental rights in pursuit of protectionist policies and its good faith disagreements over appropriate antitrust standards.  With respect to good-faith conduct, empowering the U.S. antitrust agencies to cooperate effectively with their foreign counterparts has proven far more effective than aggressive or punitive approaches historically.

The AAI also points out that, while improving coordination among U.S. trade and competition agencies is a laudable goal, it would be a mistake to do so in a way that politicizes international competition enforcement. Putting a political body in charge of international competition policy, and implicitly putting the threat of trade sanctions at the behest of U.S. competitors on the table in all such matters, would send a contradictory and counterproductive message to our trading partners. Other nations likely would respond in kind, and the United States would risk losing its antitrust leadership status in the world. Worst of all, this may imperil the U.S. antitrust agencies’ international cooperation efforts, which have been our most successful means of facilitating substantive and procedural convergence to date.

As an alternative to creating a White House working group with government-wide power to set international competition policy, the AAI believes an inter-agency working group with an appropriate advisory role should be explored.

The AAI also emphasizes that effective international competition policy reform should be broadened to include U.S. businesses’ international interests in their capacity as buyers (and consumers), not solely as rival sellers.  When U.S. victims sue foreign cartels that harm domestic commerce, for example, U.S. courts must not defer to foreign competition agencies’ discriminatory interpretations of their laws that may wrongfully permit harm to U.S. businesses and consumers.  Likewise, when foreign enforcers fail to adequately prosecute foreign cartels, U.S. direct and indirect purchasers, as well as the U.S. government, must be empowered to bring appropriate cases that promote effective deterrence.

The committee hearing and supporting materials can be found here.