Antitrust remedies are a critical, if relatively unheralded, aspect of competition law. The ability to effectively fix competitive harm is often as important to enforcement efforts as identifying the harm to begin with. Moreover, the type of remedies that agencies pursue can have a profound impact on how businesses approach potential transactions and manage their antitrust risk. This article discusses two recent—and conflicting—trends in agencies’ approaches to remedies for horizontal mergers: on one hand, antitrust regimes are demonstrating increasing international cooperation in crafting remedies, particularly among the more experienced authorities. On the other, there are signs of divergence on the issue of behavioral remedies.
Increasing International Cooperation
International cooperation in merger investigations is increasingly prevalent, especially among the more established agencies. An OECD report on international enforcement cooperation released earlier this year noted that, based on a wide-ranging survey of competition authorities, experience with international cooperation has grown significantly in the last five years, with the number of multijurisdictional cases increasing over time. Agencies reported that there was international cooperation on 116 merger cases in 2011, versus 86 in 2007, with OECD members reporting the most experience with cross-border coordination. Many of the surveyed agencies specifically mentioned the coordination of remedies in merger cases as one of the benefits of international cooperation. Moreover, 31 of the 55 survey respondents indicated that they took into account the remedies of other agencies when designing their own, while only three said they did not do so (21 reported no relevant experience).
Indeed, there are a number of recent examples of extensive coordination between competition law agencies that extended to cooperation on remedies. In particular, the Goodrich/UTC merger, a giant merger in the aircraft industry, witnessed the joint announcement of a “coordinated remedy” by the U.S. Department of Justice (DOJ), the European Commission (EC), and the Canadian Competition Bureau (CCB) involving the divestiture of three sets of assets. The CCB stated that it relied on the EC and U.S. remedies to resolve their concerns. During the investigation, the DOJ also reported that it engaged in discussions with the competition authorities in Brazil and Mexico.
Another recent example of remedy coordination was in CPTN Holdings/Novell, where the DOJ worked with Germany’s Federal Cartel Office, ultimately coordinating on revisions to the parties’ merger agreement that resolved the competitive concerns. The recent examples of coordination put into practice the U.S. and EU antitrust agencies’ commitment expressed in their 2011 Best Practices for Coordinating Merger Reviews Guide to share draft remedy proposals and participate in joint negotiations with the parties, where appropriate.