Klein Advocates a Global Competition Initiative

(September 16, 2000) U.S. antitrust chief Joel Klein gave a speech in Brussels in which he stated that "we should move in the direction of a Global Competition Initiative."

Joel Klein, Assistant Attorney General for the Antitrust Division at the U.S. Department of Justice, spoke in Brussels, Belgium, on September 14. The title of his speech was "Time for a Global Competitive Initiative?" He advocated in vague terms a "global competitive initiative," and predicted that "in the end I think such a development is almost inevitable."

He referenced, and relied upon, a lengthy report prepared earlier this year by the Justice Department's International Competition Policy Advisory Committee (ICPAC).

"The rate of economic internationalization will increase in the years ahead and increase dramatically -- beyond what most people are predicting and beyond what many people will be comfortable with," said Klein. "This in turn will mean several things relevant to antitrust enforcement."

Joel Klein

He continued that "the burdens on international cooperation and coordination among various national antitrust authorities will likewise increase. It follows as the night the day: as markets become more global, the number of countries having a legitimate enforcement interest in a particular merger will increase as well. This creates a whole host of problems -- substantively and procedurally -- about simultaneous review and the implications of one competition authority's actions for the actions of other authorities."

Klein said that US and EU antitrust authorities have cooperated on multinational merger reviews. However, "bilateral efforts, while absolutely essential, are not a complete answer."

He stated that he supports a "global competitive initiative," but did not define what he meant.

He did say that "for global cooperation and coordination to work, we need to develop a common language even if we can't achieve pure convergence." He also referenced the WTO with favor.

He concluded: "As a proposed first step, it seems to me that interested jurisdictions along with the international bodies already thinking about these issues ­ e.g., the OECD, WTO, UNCTAD, World Bank, and others ­ might establish a joint working group -- first for exchanging information and views (e.g., about ongoing and planned activities, common challenges, approaches each are taking to support sound enforcement practices, areas that are most vexing, greatest opportunities for cooperation, etc.) and then for fully exploring a Global Competition Initiative along the lines laid out in the ICPAC report."

While most of his speech was devoted to international cooperation, he also addressed the problems posed by multiple antitrust authorities within a nation.

Klein stated that "I think it is clear that the trend away from sectoral regulation in favor of generalized antitrust enforcement will grow and that, in the not-very-distant-future, we will see very little of the former -- telecommunications, airlines, energy and other industries are all in regulatory decline."

This prediction is contrary to the current trend in the U.S., where the Federal Communications Commission only recently began to conduct merger reviews for companies operating in the telephone, television, radio, cable, and Internet industries that duplicate the merger reviews of the antitrust authorities.

The ICPAC report concluded that "Concurrent jurisdiction among multiple domestic agencies has the potential to generate inconsistent policy approaches within a single jurisdiction. As a result, it can make global harmonization efforts and cross-border cooperation more difficult."

The ICPAC report continuted "that the federal antitrust authorities are better positioned to conduct antitrust merger review than federal sectoral regulators. The majority of Advisory Committee members recommend removing the competition policy oversight duty from the sectoral regulators and vesting such power exclusively in the federal antitrust agencies."

However, Klein did not reference the FCC.

Klein made a few other noteworthy statements. He predicted that Asian companies will become involved in multinational mergers. "The number of transnational mergers and acquisitions, in short, will accelerate rapidly, with major Asian companies soon beginning to conclude -- as many American and European powerhouse companies already seem to believe -- that, in many industries they need a global footprint to compete in the global market."

Klein also said that U.S. antitrust regulators act with "independence and credibility", a characterization might be disputed by Bill Gates and Bernie Ebbers.