1. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP ORIGINAL IDEAS. UNCOMMON SOLUTIONS. U.S. INTERNATIONAL COOPERATION AGREEMENTS Presented by Larry Fullerton Vienna, Austria October 13, 2000 Presented by Larry Fullerton Vienna, Austria October 13, 2000

2. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Significant Antitrust Enforcement Trends  Expanding application of national antitrust laws to cross-border business activities  Expanding cooperation among enforcement officials in different jurisdictions  Significant Antitrust Enforcement Trends  Expanding application of national antitrust laws to cross-border business activities  Expanding cooperation among enforcement officials in different jurisdictions

3. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Forms of International Antitrust Cooperation  Informal cooperation  Bilateral cooperation agreements  Multilateral agreements  Binding agreements  Non-binding agreements  Calls for stronger multilateral instruments  Forms of International Antitrust Cooperation  Informal cooperation  Bilateral cooperation agreements  Multilateral agreements  Binding agreements  Non-binding agreements  Calls for stronger multilateral instruments

4. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Why Are These Trends Important?  Practical impacts on affected private parties  Significant risks and burdens  Possible opportunities to advance business goals  Why Are These Trends Important?  Practical impacts on affected private parties  Significant risks and burdens  Possible opportunities to advance business goals

5. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Causes for Increasing Cross-Border Enforcement  Globalization of business  Proliferation of new antitrust regimes  Acceptance of U.S.-style “effects” test  Trade liberalization  Causes for Increasing Cross-Border Enforcement  Globalization of business  Proliferation of new antitrust regimes  Acceptance of U.S.-style “effects” test  Trade liberalization

6. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Increasing Globalization of Business  DOJ: Matters with international dimension have increased from 2% in 1990 to 40% in 1998  FTC: 50% of investigated mergers have an impact on consumers in more than one country  EC: Notified mergers involving a U.S. company have increased from 10 in 1992 to 125 in 1999  Increasing Globalization of Business  DOJ: Matters with international dimension have increased from 2% in 1990 to 40% in 1998  FTC: 50% of investigated mergers have an impact on consumers in more than one country  EC: Notified mergers involving a U.S. company have increased from 10 in 1992 to 125 in 1999

7. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Proliferation of New Antitrust Regimes  Today, 80 countries have antitrust laws  20 more countries are in the process of drafting laws  60 jurisdictions require or provide for merger notices  Additional merger reviews by sub-national units and regulatory agencies  Proliferation of New Antitrust Regimes  Today, 80 countries have antitrust laws  20 more countries are in the process of drafting laws  60 jurisdictions require or provide for merger notices  Additional merger reviews by sub-national units and regulatory agencies

8. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Acceptance of U.S.-Style “Effects” Test  Foundation for U.S. enforcement in foreign cartel and merger areas  Increasing acceptance of U.S. extraterritorial enforcement  Increasing adoption of “effects” test in foreign jurisdictions, including EU  Acceptance of U.S.-Style “Effects” Test  Foundation for U.S. enforcement in foreign cartel and merger areas  Increasing acceptance of U.S. extraterritorial enforcement  Increasing adoption of “effects” test in foreign jurisdictions, including EU

9. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Impacts of Trade Liberalization  Trade liberalization exposes exclusionary conduct by private sector  Private sector conduct must be addressed by antitrust laws, rather than trade laws  Pressure increases to use antitrust extraterritorially to open foreign markets  Impacts of Trade Liberalization  Trade liberalization exposes exclusionary conduct by private sector  Private sector conduct must be addressed by antitrust laws, rather than trade laws  Pressure increases to use antitrust extraterritorially to open foreign markets

10. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Results: Increasing Extraterritorial Use of Antitrust  Especially in cartel and merger enforcement areas  New need for mechanisms for notice, consultations  “Traditional” or “negative” comity considerations  Expanding requests for cooperation, assistance  Results: Increasing Extraterritorial Use of Antitrust  Especially in cartel and merger enforcement areas  New need for mechanisms for notice, consultations  “Traditional” or “negative” comity considerations  Expanding requests for cooperation, assistance

11. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Results: Multiple, Concurrent Investigations  Enhanced pressure for mutual assistance  Increasing pressure for coordination  Investigations  Remedies  Results: Multiple, Concurrent Investigations  Enhanced pressure for mutual assistance  Increasing pressure for coordination  Investigations  Remedies

12. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  Results: Burdens of Multi-Jurisdictional Mergers  Differing reporting requirements  Differing merger review standards  “Iceberg effect”--exacerbated by increasing complexity of mergers and limited agency resources  Results: Burdens of Multi-Jurisdictional Mergers  Differing reporting requirements  Differing merger review standards  “Iceberg effect”--exacerbated by increasing complexity of mergers and limited agency resources

13. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP U.S. COOPERATION AGREEMENTS  U.S. Bilateral Antitrust Cooperation Agreements  U.S. cooperation agreements with 8 jurisdictions  U.S./EU 1991 agreement has served as model  Agreements provide for:  Notification  Information sharing and mutual assistance  Consultations and traditional comity  “Positive” comity  U.S. Bilateral Antitrust Cooperation Agreements  U.S. cooperation agreements with 8 jurisdictions  U.S./EU 1991 agreement has served as model  Agreements provide for:  Notification  Information sharing and mutual assistance  Consultations and traditional comity  “Positive” comity

14. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP US COOPERATION AGREEMENTS  Positive Comity  Authorities in one country (“requesting” country) may ask authorities in the other (“requested” country) to investigate conduct in the requested country  Requirements:  The conduct harms interests of requesting country  The conduct may violate law of requested country  Requested country must “carefully consider” request  Positive Comity  Authorities in one country (“requesting” country) may ask authorities in the other (“requested” country) to investigate conduct in the requested country  Requirements:  The conduct harms interests of requesting country  The conduct may violate law of requested country  Requested country must “carefully consider” request

15. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP US COOPERATION AGREEMENTS  Other U.S. Bilateral Agreements  U.S./EU 1998 supplemental positive comity agreement (does not apply to mergers)  Agreement with Australia under the International Antitrust Enforcement Assistance Act (“IAEAA”)  Mutual Legal Assistance Agreements (“MLATs”)  Other U.S. Bilateral Agreements  U.S./EU 1998 supplemental positive comity agreement (does not apply to mergers)  Agreement with Australia under the International Antitrust Enforcement Assistance Act (“IAEAA”)  Mutual Legal Assistance Agreements (“MLATs”)

16. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP US COOPERATION AGREEMENTS  U.S./EU Bilateral Cooperation  Mostly with regard to cross border mergers  Result: increasing convergence of merger standards  Prospects for increasing cooperation on cartels  Mario Monti: “Personally convinced” of the need for expanded cooperation agreement  U.S./EU Bilateral Cooperation  Mostly with regard to cross border mergers  Result: increasing convergence of merger standards  Prospects for increasing cooperation on cartels  Mario Monti: “Personally convinced” of the need for expanded cooperation agreement

17. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP US COOPERATION AGREEMENTS  Multilateral Antitrust Agreements  No general, binding multilateral agreement  Non-binding agreements of OECD  Limited competition-related provisions of WTO  Limited provisions of NAFTA  Increasing calls for multilateral solutions  Multilateral Antitrust Agreements  No general, binding multilateral agreement  Non-binding agreements of OECD  Limited competition-related provisions of WTO  Limited provisions of NAFTA  Increasing calls for multilateral solutions

18. POWELL, GOLDSTEIN, FRAZER & MURPHY LLP US COOPERATION AGREEMENTS  Risks and Opportunities for Private Parties  Risks of extraterritorial enforcement  Risks of information disclosures  Burdens of multi-jurisdictional merger reviews  Opportunities presented by positive comity  Risks and Opportunities for Private Parties  Risks of extraterritorial enforcement  Risks of information disclosures  Burdens of multi-jurisdictional merger reviews  Opportunities presented by positive comity