Mutual Assistance under the International Antitrust Enforcement Assistance Act: Obstacles to a United States-Japanese Agreement

By Trujillo, Geralyn | Texas International Law Journal, Summer 1998 | Go to article overview

Mutual Assistance under the International Antitrust Enforcement Assistance Act: Obstacles to a United States-Japanese Agreement


Trujillo, Geralyn, Texas International Law Journal


INTRODUCTION

The expansion of business competition on a global scale presents unique problems for antitrust enforcement. In any given industrialized country, antitrust authorities are often faced with anticompetitive behavior that occurs outside their borders but negatively affects their industries' ability to compete in both domestic and foreign markets. The key ingredient in enforcing antitrust laws and detecting violations is the procurement of highly confidential information as evidence. For example, in a price-fixing case where there could be collusion among competitors to keep prices artificially high, evidence such as "a memorandum of a phone call made to a competitor, a calendar entry of a meeting of competitors with obviously no legitimate purpose, or a copy of a competitor's price list"1 would be crucial in either detecting a violation or building an antitrust case. Although gaining access to this type of information seems less daunting at the domestic level, at an international level it can be troublesome considering the lack of international procedures for compelling disclosure of antitrust evidence located abroad and the difficulty of enlisting the aid of foreign government commissions who may not want to cooperate if they object to the enforcement-hence the need for mutual assistance.

The International Antitrust Enforcement Assistance Act (IAEAA),2 enacted by the U.S. Congress in 1994, is designed to enable antitrust enforcement authorities to obtain evidence located outside the United States under the authority of reciprocal mutual assistance agreements negotiated by U.S. antitrust agencies and their foreign counterparts.3 The purpose of the Act is to "[give our antitrust authorities] better tools for obtaining evidence abroad, because antitrust violations increasingly involve transactions and evidence which are located abroad or in more than one country."4 Thus far, the United States has successfully negotiated and signed its first ever mutual assistance agreement with Australia.5 Under this agreement, the Federal Trade Commission, the Department of Justice, and the Australian Competition and Consumer Commission are obligated to "cooperate on a reciprocal basis in providing or obtaining antitrust evidence that may assist in determining whether a person has violated, or is about to violate, their respective antitrust laws."6 It remains to be seen whether mutual assistance agreements with other U.S. trading partners in Asia and elsewhere will be negotiated with as much success.

This note will examine the obstacles and disincentives that would need to be overcome to negotiate a bilateral mutual assistance agreement between Japan and the United States. Notwithstanding the current economic woes in Asia, Japan remains one of the United States' most important trading partners.7 However, Japan is also a nation with whom the United States has experienced conflict over a variety of trade issues.8 A mutual assistance agreement between the two nations would be a step forward in mitigating some of the conflict in the area of antitrust law by creating greater cooperation in antitrust enforcement.

Part I of this discussion examines the background of the IAEAA and discusses the past problems encountered in the extraterritorial application of U.S. antitrust law. Part II sets forth some of the incentives and disincentives to creating a mutual assistance agreement between the two nations in light of the substantive differences in Japanese and U.S. antitrust law and in light of the differences in the approach and level of antitrust enforcement. Part III discusses the difficulty of protecting confidential business information while gathering evidence located beyond one's borders and compares the confidentiality requirements of U.S. and Japanese law.

Contrary to what one might assume, the obstacles to a mutual assistance agreement in antitrust enforcement may have less to do with differences in substantive antitrust laws and confidentiality requirements and more to do to with the differing methods the two countries use to enforce their antitrust policy. …

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