WORLD TRADE
ORGANIZATIONWT/WGTCP/W/164
26 June 2001
(01-3199)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE UNITED STATES
The following is the final text of a pape r received from the Permanent Mission of the
United States which was circulated as an advance copy for the Working Group's meeting of
22-23 March 2001.
_______________
Administering a Competition Law and Policy:  The Mechanics of
Setting and Pursuing Policy Goals with finite resources
Introduction
Last year, under the discussion topic of "approaches to promoting cooperation and
communication among Members, including in the field of technical cooperation", the United States
presented a paper which was intended to stimulate the Working Group's consideration of ways in
which Members can create a "culture of competition".1  At that time, our delegation touched upon
some issues that new antitrust agencies face in framing and organizing their work in the context of
economic and legal environments where antitrust laws, and perhaps concerns about competitionpolicy generally, are new and untried concepts.
2  This submission develops and elaborates upon these
issues.  Although we draw largely upon the structure and experience of US antitrust agencies, we do
so in the hope that it will provoke thought about how similar sorts of questions might be taken up by
new antitrust agencies, as well.  As with most aspects of competition policy, specific enforcement
priorities necessarily change over time, as Members' citizens and governments gain experience withcompetition issues, and as economic circumstances change on a national and global basis.  We hope
to encourage at this meeting a productive exchange of views on some of the practical aspects of
prioritising antitrust enforcement and competition policy issues on an ongoing basis, all the while
ensuring consistency with the fundamental objectives and principles of a sound competition policy.
Antitrust agencies, like other government agencies, must prioritise their work in order to
maximize their impact within their particular frameworks of limited - sometimes very limited -
resources.  Roughly speaking, there are two quite different sets of considerations that antitrust
agencies must weigh.  First, the agency must decide how it will allocate its attention and resources
across several broad areas of activity.  Will it emphasize public education about competition issues,including its antitrust law?  Will it emphasize competition advocacy before other government
                                                     
1 WT/WGTCP/W/142 (9 June 2000).
2 Id. at 14-17.WT/WGTCP/W/164
Page 2
bodies? 3 Will it emphasize law enforcement, and, if so, what sort of enforcement ( e.g., cartels or
mergers, a few "big" cases or numerous smaller ones)?  Or - most pertinent of all - in what
proportions and within what limitations will it do all of these things?  Second, once an agency begins
to enforce its law, it may well encounter a wide variety of potentially anti-competitive behaviour.  It
thus must decide how best to use that portion of its resources that are dedicated to enforcement, inorder to choose wisely the cases it investigates and, where appropriate, prosecutes under its
administrative or judicial enforcement regime.
A few examples will suggest why setting and resetting priorities is both crucial and inevitable.
In 1999, Argentina's antitrust law was amended to give the Argentine antitrust agency both
pre-merger notification authority and merger review authority.  These legislative changes have
required the Argentine agency to devote significant resources to these important and complex newtasks; necessarily, though, the resources now being devoted to mergers have had to be diverted from
other agency tasks.  Similarly, in the Netherlands, the 1997 antitrust law brought an initial wave of
over 1,000 requests for exemptions, the processing of which has occupied a large portion of the new
Competition Authority's resources.  At the same time, the Dutch agency has had to focus on
organizing itself and training its personnel, while planning for the day - which is coming soon - whenit will have largely finished with the exemption requests and can turn to affirmative enforcement
efforts.
4  More generally, the growing recognition of the harm done by cartels, both domestic and
international, has led antitrust agencies from Swed en to Brazil to Ireland to make anti-cartel law
enforcement a top priority.5
Finally, the congruence of resource limitations with changing legal and economic
circumstances has prompted the European Commission to propose changing longstanding substantive
and procedural rules on vertical restraints and authorization of private business agreements.  As
Commissioner Mario Monti stated last year, the Co mmission's authorization system "facilitated the
development of a body of clear, structured rules and their coherent application throughout theCommunity";  but now "the environment in which competition policy finds itself has been
transformed:  the Community has become a market which is strongly integrated....".  However, the
EU "authorization regime which compels undertakings to notify their agreements to the Commission
has become a bureaucratic constraint which no longer facilitates the efficient protection of
competition.  Dealing with notifications prevents  the Commission from focusing on the most serious
restrictions ..., those infringements which are never notified and which are the most harmful for
European consumers and the European economy".
6
Naturally, an antitrust agency's priorities are not very useful, to itself or anyone else, if
knowledge and understanding thereof are not widely disseminated to the agency's own officials and
the public that is impacted by those priorities.  Moreover, public exposition of and debate over the
nature and direction of an agency's priorities helps to ensure that the agency's mission remains faithfulto the underlying tenets of a sound antitrust regime.  Accordingly, as we have discussed in previous
Working Group meetings, antitrust officials in the United States and elsewhere regularly explain - in
speeches, policy papers, annual reports, testimony before legislatures, and the like - what their
                                                     
3 The United States, Canada, and Korea submitted papers on this subject last year.  See
WT/WGTCP/W/153 (US); WT/WGTCP/W/146 (Canada); and WT/WGTCP/W/144 (Korea).
4 Netherlands Competition Authority, 1999 Annual Report at 5-7.  This Report noted that, as work on
exemption requests was expected to subside during 2000, the agency would have resources available for other
activities, which were expected to include the investigation of  "hidden cartels and abuses of dominant positions,particularly in relation to network access."  Id. at 6.
5 See Minister Mona Sahlin, "The New Swedish Proposal on Competition Policy" (12 September 2000)
at 6-8. As one document on the Irish Competition Authority's website explains, that agency "has identifiedpursuit of cartels as its top priority."  www.irlgov.ie/compauth/immunity.
6 European Commission, XXIXth Report on Competition Policy 1999 (2000) at 6.WT/WGTCP/W/164
Page 3
priorities are and why making changes in existing priorities might be appropriate.7 We will cite just
three examples among many.  First, US Federal Trade Commission Chairman Robert Pitofsky gave a
speech earlier this month explaining why "a major challenge of the next decade is to identify the
policies that will allow a market economy to thrive in the context of [the] intellectual property
revolution" underlying the "New Economy".8  Second, the EU's proposals, cited above, to change its
authorization regime have been accompanied by an extensive public consultation process.  And third,
the Canadian Competition Bureau published last year a "Conformity Continuum Information
Bulletin", which describes in 15 pages "the general approach of the [agency] to the administration and
enforcement" of the Canadian Competition Act.9  With these varied examples in mind of transparency
in setting antitrust priorities, we now turn to a more detailed discussion of what we know best - how
the US antitrust agencies identify and set their priorities to fit changing circumstances.
Setting Priorities at the US Antitrust Agencies
The United States' federal antitrust system distributes prosecutorial power more widely than
many other national antitrust regimes.10  US statutes and court decisions confer standing to enforce the
US national antitrust statutes on the two federal antitrust agencies, the Antitrust Division of theDepartment of Justice (DOJ) and the Federal Trade Commission (FTC or Commission), as well as on
state attorneys general and private parties, including injured consumers and businesses.  In this paper,
we will focus on how the two federal antitrust agencies set and implement enforcement priorities.
Legal Framework
The FTC has exclusive responsibility for enforcing the Federal Trade Commission Act ("FTC
Act") and has concurrent authority with the DOJ for Clayton Act enforcement.   The FTC's antitrust
authority derives from Section 5 (a) (1) of the FTC Act, which prohibits "[u]nfair methods of
competition in or affecting commerce".  Unfair methods of competition include all conduct thatviolates the Sherman or Clayton Acts, but also extend further to cover conduct that violates the spirit
of these Acts and that constitutes an "incipient" antitrust offence - conduct which, if left unchallenged,
might develop into a Sherman or Clayton Act violation.  The agency is the primary arbiter of what
constitutes an "unfair method of competition" and has broad discretion to interpret this mandate,
within the parameters set by the courts, on a case-by-case basis.
11
Under Section 5 (b) of the FTC Act, the FTC can bring a case only if it has "reason to
believe" that the law has been violated12 and if it determines that an enforcement action "would be of
                                                     
7 In some situations, antitrust agencies may seek advice from outside experts, as the Department of
Justice did in creating the International Competitio n Policy Advisory Committee (ICPAC) in 1997; ICPAC
issued a comprehensive report last year, www.usdoj.gov/atr/icpac/icpac.htm.
8 Robert Pitofsky, "Antitrust and Intellectual Property: Unresolved Issues at the Heart of the New
Economy" (2 March 2001), www.ftc.gov/speeches/pitofs ky/ipf301.htm.  Other recent examples of speeches
explaining new priorities in other contexts include John Vickers, UK Director General of Fair Trading,
"Competition Policy and Globalization" (16 January 2001), www.oft.gov.uk/html/rsearch/sp-arch/spe01-01.htm;
and A. Douglas Melamed, US Acting Assistant Attorney General, "Promoting Sound Antitrust Enforcement in
the Global Economy" (Oct. 19, 2000), www.usdoj.gov/atr/public/speeches/6785.htm.
9 Www.strategis.ic.gc.ca/SSG/ct01768e.html.
10 Most US states also have antitrust laws closely paralleling the federal antitrust laws.  The state laws
generally apply to violations that occur wholly in one st ate.  These state laws are enforced similarly to federal
laws through the offices of the state attorneys general.
11 See FTC v. Sperry & Hutchinson Co., 495 U.S. 233  (1972); FTC v. R.F. Keppel & Bros., Inc., 291
U.S. 304 (1934).
12 The US Supreme Court has held that the FTC's finding of a "reason to believe" that the law has been
violated is a discretionary act not subject to judicial review except in connection with review of a final FTC
cease and desist order.   See FTC v. Standard Oil Co., 449 U.S. 232, 239-43, 246 (1980).WT/WGTCP/W/164
Page 4
interest to the public".13  The statute lists no factors for making this "public interest" determination,
leaving it to the agency's discretion.  In each case, the FTC evaluates the short and long term effects
on the public interest of a decision to prosecute, considering, among other things, its significance to
the evolution of the law, precedential value, and the agency's resource constraints.  Before bringing a
case, the FTC must be convinced not only that there is a probable law violation but that there is likelyinjury to competition and consumers.  Exercising its prosecutorial decision entails weighing the
potential benefits of prohibiting the violation against the costs of bringing an enforcement proceeding
and monitoring compliance with an FTC order.  The FTC seeks to bring cases that yield the largest
tangible benefits to consumers while using the fewest resources and without unduly interfering with
the free operation of the marketplace.
14
The FTC was created as an independent agency to ensure that its enforcement is non-political.
Commissioners have staggered terms of seven years, thus overlapping presidential administrations,
and cannot be removed for making politically unpopular decisions; no more than three of the five
Commissioners can be of the same political party.  However, the President designates the Chairman,
who has substantial influence on the FTC's operation and direction.  The FTC tries its cases before
specialized administrative law judges, although it can seek interim relief in federal courts for time-sensitive matters such as mergers.  Administrative law judge decisions are subject to review by the
FTC, acting in an adjudicative rather than prosecutorial capacity, and ultimately are subject to review
by the federal courts.
15
The DOJ is a law enforcement agency.  As an Executive Branch Department, it enforces the
antitrust laws through criminal prosecutions and civil lawsuits in the federal courts.  The DOJ has sole
authority to prosecute federal criminal violations.  The Attorney General is an officer of the Executive
Branch, and under the United States Constitution, he or she is ultimately responsible to the President,
by whom he or she is appointed (with the advice and consent of the US Senate).  Within the DOJ,
which the Attorney General heads, responsibility for antitrust enforcement lies in the Antitrust
Division, headed by an Assistant Attorney General, who is also appointed by the President (with the
advice and consent of the Senate).
Setting Broad Enforcement Priorities  and Selecting Individual Cases
A. Federal Trade Commission
The FTC interprets and implements the FT C Act primarily through the prosecution and
adjudication of individual cases.  The FTC's Bureau of Competition, with assistance from its Bureau
of Economics, carries out the agency's antitrust mission by investigating alleged law violations and
recommending, when appropriate, that the FTC take  formal enforcement action.  In addition, the FTC
promotes the use by federal, state, and local government agencies of free market mechanisms ratherthan regulatory restraints by providing, upon request,  reports or comments to those agencies that seek
its views.  The FTC's Office of Policy Planning is responsible for the coordination of consumer and
                                                     
13 The FTC Rules of Practice and Procedure provide that  "[t]he Commission acts only in the public
interest and does not initiate an investigation or take other action when the alleged violation of laws is merely ofprivate controversy and does not tend to affect the public."  16 C.F.R.  § 2.3.
14 Section 6(c) of the FTC Act authorizes the FTC "u pon the direction of the President or either House
of Congress to investigate and report the facts relating to any alleged violations of the antitrust acts by any
corporation" but the FTC independently determines whether to undertake such investigations and whether toprosecute based on the evidence.
15 It bears noting that in any investigative syst em where broad discretion is conferred upon the
investigative agency to decide which cases are approp riate to pursue and when, judicial review (or some
analogous mechanism involving independent oversight) pl ays a critical role in ensuring that prosecutions are
based upon the intended principles of the law and within reasonable parameters.WT/WGTCP/W/164
Page 5
competition advocacy.  FTC staff also encourage voluntary compliance by issuing advisory opinions
to members of the public who request clarification of the FTC's enforcement policies.
The FTC also addresses its enforcement priorities through the budget process.  Each year, the
FTC prepares a budget request for its antitrust mission, which is subject to Congressional approval.The budget request sets out how appropriated funds will be allocated by enforcement program area,
e.g., pre-merger notification, merger and joint venture enforcement, and non-merger enforcement.
The requested allocations are based on recent experience as well as judgements about expected trends
in the economy ( e.g., in its structure or composition).
The principal practical limitation that the FTC confronts in setting its antitrust enforcement
priorities is the resource constraint imposed by its statutorily required merger review responsibilities.The pre-merger notification requirements and tight statutory deadlines for merger review imposed by
the Hart-Scott-Rodino Improvements Act of 1976 (HSR) require the FTC to allocate sufficient
resources to fulfill its responsibilities under this Act.  The merger wave of the 1990s tripled the FTC's
merger workload over a seven-year period and required diversion of resources from the non-merger
area.  Currently over two-thirds of the Bureau of Competition's resources are allocated to mergerenforcement.
16
The remaining third of the Bureau of Competition's resources is devoted to non-merger
enforcement, an area of growing concern particularly in dynamic areas of the economy that have a
serious impact on consumers, such as arrangements in the provision of health care services andexclusionary behaviour by dominant firms in high technology industries.  Resources for non-merger
matters are also devoted to non-litigation activities, such as analytical work in support of the FTC's
advocacy program, advisory opinions, and the handling of public correspondence and inquiries.
Advocacy also has an important role in the agency's work, as one of the FTC's goals is to
support sound regulatory reform.
17  FTC staff regularly file comments in federal and state proceedings
aimed at establishing sound rules for deregulating sectors such as electricity.  In addition, the FTC has
brought enforcement actions in formerly regulated ma rkets to ensure that the benefits of competition
are not thwarted by private restraints.  Thus, the FTC has challenged anti-competitive conduct in
deregulated or deregulating industries, such as natural gas, electricity, cable television, and
professional services.
While the FTC does not "target" specific sectors, it focuses its limited resources on segments
of the economy where consumer spending is high, such as health care, pharmaceuticals, other
professional services, food, energy and certain high -technology industries like computers and video
programming.  In the past few years, the Bureau of Competition has devoted an increasing amount of
its resources to enforcement in high-tech industries.  The FTC also has played a major role inpreserving competition in defense industries, where the "consumer" is essentially the US government.
                                                     
16 Late last year, Congress significantly changed the HSR Act's pre-merger reporting requirements,
generally increasing the thresholds for notifiable transactions; the new reporting requirements went into effecton February 1, 2001.  Pub. L. No. 106-553, 114 Stat. 2762.  Changes to the HSR Act that affect filingrequirements include:  increase in the size-of-transaction threshold to $50 million; elimination of the 15 percent
size-of-transaction threshold; transactions valued at greater than $200 m illion will be reportable without regard
to "size-of-person," and changes in the size-of-person dolla r thresholds will be adjusted each fiscal year (FY),
beginning with FY 2005, for changes in the gross national product during the previous year.
17 As we explained in our recent submission on competition advocacy, see supra  n. 3, "the FTC
estimates that [its] advocacy program currently consumes about one percent of its budget, down from two tofive percent in the late 1980s. ... This decline reflects not only resource constraints but the success of the
program in earlier years in identifying the most obvious and pervasive restraints on competition".  Id. at 8.WT/WGTCP/W/164
Page 6
Turning to the case selection process, the FTC relies upon a variety of sources for information
in determining where resources might best be dedicated.  These include complaints from customers,
suppliers, or competitors about practices alleged to be anti-competitive.  Bureau of Competition staff
review the complaints and, where a complaint falls within its jurisdiction, may initiate an inquiry.
Investigations are often triggered by the staff's monitoring of the general and trade press concerningmergers, distribution arrangements and other relevant conduct or agreements and can also arise out of
other Bureau cases, investigations and projects.  The pre-merger notification program is, of course,
the main source of merger investigations.  In general, deciding which cases to pursue depends, in part,
on how pursuit of a case would advance the FTC's policy goals.  These goals are informed by, among
other things, views and information gleaned from  following business and economic developments in
the literature, holding workshops, and participating in conferences.  A great deal of informal
interaction among colleagues helps, in turn, to disseminate such new learning throughout the agency.
The FTC has established procedures designed to ensure that its cases are legally and
economically sound, and are the most productive use of the agency's limited resources.  Non-merger
and merger investigations have similar but separate procedures for case initiation and review.  In non-
merger investigations, the head of the relevant division approves the opening of an initialinvestigation, generally on the basis of a staff attorney's request and a memorandum that briefly
explains the proposed investigation.  An economist is assigned to assist in the investigation.  If a
preliminary investigation produces evidence of a plausible law violation and injury to competition, the
staff will forward a summary of their findings, the legal theory and a request to the Bureau of
Competition's Evaluation Committee for conversion to a full investigation, which is a more searchingand detailed inquiry.  At this point, the staff may also seek authorization to issue subpoenas or civil
investigative demands, which place parties under a legal obligation to provide specific documents,
testimony, or information that the staff requests to further the investigation.  Before such steps
(otherwise known as "compulsory process") can be  taken, however, the Commission must authorize
the action.
The Evaluation Committee consists of the Directors of the Bureaux of Competition and
Economics and their principal deputies and is usually chaired by the Director of the Bureau of
Competition.  The Committee considers the separate analyses and, if there are different views,
separate recommendations of the Bureau of Competition's investigative staff, the Bureau of
Competition's Office of Policy and Evaluation and the Bureau of Economics.  The Bureau of
Economics provides economic analysis and advice on the economic merits and impact of alternativecourses of action.  The decision whether to commit additional resources to the investigation is made
by the Director of the Bureau of Competition.
Particularly because the Bureau of Competition's merger workload has soared, it must be
selective in deciding how to use its non-merger resources.  Bureau management monitors the progressof investigations and tries to decide early in the process whether the investigation is worth continuing
or whether its focus needs to be narrowed or shifted.  The determination of where to devote resources
is an important and refined part of the process of setting enforcement priorities.  The size of the
resource commitment differs from case to case as well as from one stage of the enforcement process
to another in the same case.  Some of the key factors that the Bureau considers before pursuing aninvestigation are: (i) the likelihood of finding a legal violation; (ii) the impact on consumers; (iii) the
deterrent and precedential value of the case; and (iv) how consumers will benefit.  But the FTC does
not bring just "big" cases; it brings cases, for exampl e, involving health care services, in relatively
small markets where the impact of the violation may be smaller in relative scale but still substantial
for the affected consumers or in deterrent value.  In recommending a complaint, the Bureau alsoweighs litigation risks, including the size of the resource commitment and the likelihood of success on
the merits.WT/WGTCP/W/164
Page 7
The FTC sometimes brings cases not only because of the immediate market impact, but also
because the case may help clarify the law.18  For example, the FTC has applied straightforward
concepts of joint venture law to new arrangements among health professionals and has provided
guidance in areas such as invitations to collude a nd standard setting, where there is relatively little
case law.19  In both types of cases, the value of the enforcement action goes beyond the specific case
by clarifying the law and in turn guiding the broader business community.
Where the source of the investigation is a complaint by a private party, the Bureau of
Competition also will consider whether the public interest in the matter is sufficient to warrant using
government resources, rather than leaving the private party to pursue the case, and whether the relief
that the private party could obtain would be sufficient to vindicate the FTC's interest in the case.
The case selection and review procedures for mergers are similar in most respects to those of
non-merger investigations but are streamlined because of the time constraints imposed by the HSR
Act.  Legal staff in the FTC Premerger Notification Office review HSR filings and prepare analytical
summaries that include recommendations to grant early termination for transactions that raise no
competition concerns (the large majority of cases) or recommendations for further investigation bystaff in the merger litigation divisions.  The proced ure for opening an initial phase investigation is the
same as that for non-mergers.  However, the decisi on to convert an initial phase investigation to full
phase, including authorization to issue second reque sts to the parties and to use compulsory process,
20
is made after consideration by the Bureau of Competition's Merger Screening Committee, which has
the same composition as the Evaluation Committee.  At the conclusion of the full phase investigation,the Bureau Director again consults with Bureau staff and the Bureau of Economics on any staff
recommendation for an enforcement action.  The Director also gives the parties to the transaction an
opportunity to present arguments in support of the merger.
The matter is then presented to the Commission, which makes the ultimate enforcement
decision on behalf of the agency.  At the Commission level, the matter is assigned to one of the five
Commissioners who is responsible for recommending  how the Commission should proceed.  The staff
and the parties typically meet with the Commissioners to explain their analyses and recommendations.
The Commission decides how to proceed by a majority vote of the five Commissioners.  If a
Commissioner disagrees with the majority's decision, he or she may issue a separate statement
explaining his or her position; the majority may similarly issue such an explanatory statement.
The factors that the Bureau of Competition considers in deciding whether to initiate a full
phase investigation or recommend an enforcement action are the same as for non-mergers.  The
standards for a legal violation are set out in the 1992 Horizontal Merger Guidelines jointly issued by
the FTC and DOJ.
In both the merger and non-merger areas, most competitive problems are resolved through
consent orders, as noted above.  In each, the Bureau of Competition's decision whether to recommend
a settlement or litigation is based on an assessment of what type of relief is necessary to prevent the
actual or potential injury to competition, as well as the risks and costs of litigation versus settlement.
An example from the merger area is Staples Inc./Office Depot Inc., in which the parties proposed a
divestiture that only addressed the geographic areas where the merger would leave only one office
                                                     
18 Even when a case is settled, the FTC publicly explains the facts and legal theory in its analysis to aid
public comment on a proposed consent order.
19 Urological Stone Surgeons and Parkside Kidney Stone Centers, Dkt. C-3791, 5 Trade Reg. Rep.
(CCH) ¶  24, 367; Mesa County Physicians Independent Practice Ass'n, Inc., Dkt. 9284, 5 Trade Reg. Rep.(CCH) ¶  24, 266;  Stone Container, Dkt. C- 3815, 5 Trade Reg. Rep. (CCH) ¶  24,390;  Dell Computer Corp.,Dkt. C-3658, 5 Trade Reg. Rep. (CCH) ¶  24, 054.
20 As with non-mergers, the Commission must approve the use of compulsory process.WT/WGTCP/W/164
Page 8
superstore but not those where the number of such competitors was reduced from three to two.  The
Bureau urged the Commission to reject the settlement as inadequate to fully restore the level of
competition that existed before the merger.  The Commission agreed and authorized staff to seek
injunctive relief, which the federal district court granted.
B. The Department of Justice
As a law enforcement agency, the DOJ possesses very broad discretion over the setting of
enforcement priorities and in determining which inves tigations to open, investigate, and prosecute.  A
DOJ decision not to investigate a complaint or prosecute a case cannot be challenged;21 actual
prosecutions, of course, are litigated in federal court.  (The concept of broad prosecutorial discretion
to bring, or not to bring, cases is a familiar one in common law countries.  In Canada, for example, theAttorney General of Canada (usually through Crown counsel) exercises a broad discretion in the
public interest in deciding which cases to prosecute; decisions whether to prosecute thus rest solely
with the Attorney General and his or her counsel.
22)  In FY2000, 45 per cent of the Antitrust
Division's total resources were devoted to merger enforcement, 23 per cent to civil non-merger
enforcement, and 32 per cent to criminal enforcement .
The mission of the Antitrust Division is "the promotion and maintenance of competition in
the American economy."23  The Division's primary functions and goals include:  (i) general criminal
and civil enforcement of the federal antitrust laws and other laws relating to the protection of
competition; (ii) intervention and participation be fore administrative agencies functioning wholly, or
partly, under the regulatory statutes in proceedings requiring consideration of the antitrust laws or
competition policies;24 and (iii) advocacy of pro-competitive policies before other branches of
government.25  Within these broad outlines, the DOJ has no formal priority-setting practice.  It is, of
course, subject to the oversight of Congress, which appropriates the funds to support its activities and
can request that the DOJ look into certain sectors or activities.
In recent years, the DOJ has set as broad priorities the investigation and prosecution of
international cartels, clarification of antitrust doctrine as applied to high-tech network industries,
ensuring effective competition as long-regulated industries move to a competitive model, and tackling
the challenges of antitrust enforcement in a globalized economy.  The DOJ has a responsibility to
contribute to the continual evolution of antitrust doctrine and to see that it proceeds coherently and in
a manner that is applicable to modern economic trends and industry practice.  Because antitrustdoctrine in the United States is primarily a matter for statutory construction by the courts, appropriate
case law development is a DOJ concern in considering whether to bring a case.  The same is true with
respect to decisions on whether to file amicus curiae  briefs in Supreme Court or other cases in which
the US federal government is not a party but where important legal issues may be raised.
                                                     
21 E.g., United States v. Armstrong, 517 U.S. 456, 464 (1996); United States Attorneys' Manual §9-
27.000 (1997), and cases cited therein.
22 This has also been the view long taken in the United Kingdom.  In 1925, the then-Attorney General
of England explained: "I understand the duty of the Attorn ey General to be this.  He should absolutely decline to
receive orders from the Prime Minister, or Cabinet or any body else that he shall prosecute.  His first duty is to
see that no one is prosecuted with all the majesty of the law unless the Attorney General ... is satisfied that the
case for prosecution lies against him.  He should receive orders from nobody."  J. Edwards, The Law Officers of
the Crown  215 (1964).
23 Antitrust Division Manual at I-14.
24 We discussed this aspect of the DOJ's and FTC's work in a prior submission to this Working Group.
"The Impact of Regulatory Practices, State Monopolies, and Exclusive Rights on Competition and InternationalTrade," WT/WGTCP/W/83 (27 July 1998).
25 Antitrust Division Manual at I-15.  See 28 C.F.R. §§ 0.40, 0.41.WT/WGTCP/W/164
Page 9
In addition to these precedential and doctrinal considerations, the DOJ considers the amount
of commerce affected and the number of consumers and businesses affected when deciding whether
to prosecute cases.  In the United States, each of the 50 state governments may sue to enforce federal
antitrust laws when an antitrust violation causes injury  to the state itself or to its citizens and, as noted
earlier, nearly all the states have their own antitrust laws which may be enforced through suits broughtby states in the state courts.  In addition, as also noted above, private rights of action are available for
parties to enforce their rights under the antitrust laws, so a decision by federal or state agencies not to
prosecute does not leave parties without recourse to a possible remedy.
26
Another important factor considered is the deterrent value against anti-competitive behaviour
of a particular prosecution within an industry or region.  There is no formal cost/benefit analysis
applied to the decision whether to investigate and prosecute a case, but internal procedures - set forthin the Antitrust Division Manual - ensure that at various decision points,
27 a written recommendation
memorandum prepared by staff, including careful review of whatever economic analysis will be
needed from the economic sections, is evaluated by senior DOJ officials.  Detailed explanations of
proposed staffing, information system support, workspace requirements, and other logistical
considerations are included in these memoranda, along with a detailed discovery plan identifyingspecific requests, individuals involved, relevant dates, and expected outcomes.
The DOJ enforces the antitrust laws through lawsuits brought in the federal courts.  A critical
factor in the decision whether to bring a case is the need to persuade a federal judge of general
jurisdiction (and ordinarily a jury in criminal cas es) that an offence has been committed; in criminal
cases, the DOJ must prove its case beyond a reasonable doubt, while in a civil case (merger or non-
merger), the DOJ must prove that it is more likely than not that an offence has been committed.  There
are special standards of proof for obtaining temporary or preliminary relief in merger and other civil
cases.
28  The quality of the evidence (including the credibility of witnesses) and complexity of the
case are obviously extremely important in this context.
Like the FTC, the DOJ also does not "target" particular sectors, although it may focus its
resources in response to economic developments - consolidation and other potentially
anti-competitive activity in recently deregulated sectors, for example.  Competition advocacy efforts
before other government agencies typically are undertaken after an informal cost/benefit analysis in
which the likelihood and importance of a successful outcome are estimated and compared to the cost
of the necessary undertaking.
The broad standards used by the DOJ in deciding whether to pursue criminal proceedings,
including investigative measures, are set out in the Principles of Federal Prosecution contained in the
US Attorneys' Manual, a public document.  The Principles of Federal Prosecution explain that the
DOJ possesses wide discretion regarding whether, when and how it will bring criminal charges,including in antitrust cases.  For example, Section 9-27.220 states that, where there is sufficient
admissible evidence of a federal offence, the government may nonetheless decline to prosecute
because:  (i) no substantial federal interest would be served by prosecution;
29  (ii) the person whose
                                                     
26 Nearly 3,400 antitrust cases were commenced in US  federal district courts  during the period 1996-
2000; the vast bulk of these cases were initiated by private persons.
27 Examples of such decision points would include the decision to issue compulsory process – such as a
civil investigative demand, second request in an HSR investigation, or grand jury subpoena – and the decision tofile a case, terminate an investigation, or enter a settlement.
28 These issues are discussed in detail in Chapter IV of the Antitrust Division Manual, which is
available on the Division's website.
29 In Section 9-27.230, "substantial federal interest" is defined to include, inter alia , "federal law
enforcement priorities" and "the nature and seriousness of the offence".WT/WGTCP/W/164
Page 10
prosecution is being considered is subject to effect ive prosecution in another jurisdiction; or (iii) there
exists an adequate non-criminal alternative to prosecution.30
In a matter where the suspected conduct appears to meet the DOJ's standard for a criminal
proceeding, the decision whether to open an investigation will depend on three questions.  The first ofthese is whether the allegations or suspicions of a criminal violation are sufficiently credible or
plausible to call for a criminal investigation.  This is a matter of prosecutorial discretion and is based
on the experience of the approving officials.  The second question is whether the matter is
"significant."  Determining which matters are "signifi cant" is a flexible, matter-by-matter analysis that
involves consideration of a number of factors, including:  volume of commerce affected; geographic
area impacted; the potential for expansion of the investigation or prosecution from a particular
geographic area and industry to an investigation or prosecution in other areas or industries; thedeterrent impact and visibility of the investigation and/or prosecution; the degree of culpability of
conspirators ( e.g., the duration of the conspiracy, the amount of overcharge, any acts of coercion or
discipline of cartel cheaters, and the like); and whether the scheme involved a fraud on the federal
government.  The third question -- what resources will be required to investigate and prosecute the
matter -- is asked for all matters, but affects decisions to prosecute only for matters that are assessedas having lesser significance.  The DOJ is committed to prosecuting all antitrust matters of major
significance.
Conclusion
Antitrust law enforcement agencies have finite resources that impose a practical limit on the
number of  investigations and proceedings that can be initiated and pursued.  In choosing where to
place scarce resources, the FTC and DOJ allocate the vast bulk of their personnel and financial
resources to merger, civil non-merger, and (in the DOJ's case) criminal matters.  As the US economy
evolves, US antitrust enforcement priorities are also likely to evolve, with changes clearly and
publicly signalled by our senior antitrust officials.  We have noted in previous meetings of this
Working Group that a Member's decision to enact an antitrust law is only the beginning of a
continuing process of resolving complex legal and economic issues, taking into account changes in
national, regional, and global markets.  While we understand that specific policy goals, enforcement
priorities and resource constraints may vary significantly among WTO Members, whether by choice
or by necessity, we hope that this paper will inform the Group's discussions and assist other Members
– particularly those that are just beginning to think about how to deal with antitrust issues.
__________
                                                     
30 As the Principles of Federal Prosecution caution (§9-27.001): "The manner in which Federal
prosecutors exercise their decision-making authority has far-reaching implications, both in terms of justice and
effectiveness in law enforcement and in terms of the consequences for individual citizens.  A determination toprosecute represents a policy judgment that the fundamenta l interests of society require the application of the
criminal laws to a particular set of circumstances - recognizing both that serious violations of Federal law mustbe prosecuted, and that prosecution entails profound consequences for the accused ... whether or not a
conviction ultimately results".