U.S. GOVERNMENT PUBLISHING OFFICE

29–794 WASHINGTON : 2018

RECENT TRENDS IN INTERNATIONAL ANTITRUST 

ENFORCEMENT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JUNE 29, 2017 

Serial No. 115–26 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 


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COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

RON DESANTIS, Florida 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

MARTHA ROBY, Alabama 

MATT GAETZ, Florida 

MIKE JOHNSON, Louisiana 

ANDY BIGGS, Arizona 

JOHN CONYERS, JR., Michigan, 

Ranking Member 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

THEODORE E. DEUTCH, Florida 

LUIS V. GUTIE ́ RREZ, Illinois 

KAREN BASS, California 

CEDRIC L. RICHMOND, Louisiana 

HAKEEM S. JEFFRIES, New York 

DAVID CICILLINE, Rhode Island 

ERIC SWALWELL, California 

TED LIEU, California 

JAMIE RASKIN, Maryland 

PRAMILA JAYAPAL, Washington 

BRAD SCHNEIDER, Illinois 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

TOM MARINO, Pennsylvania, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

DOUG COLLINS, Georgia 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

MATT GAETZ, Florida 

DAVID CICILLINE, Rhode Island 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

ERIC SWALWELL, California 

PRAMILA JAYAPAL, Washington 

BRAD SCHNEIDER, Illinois 


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C O N T E N T S 

JUNE 29, 2017 

OPENING STATEMENTS 

Page 

The Honorable Tom Marino, Pennsylvania, Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary ......................................................................................................................... 1 

The Honorable David Cicilline, Rhode Island, Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary ........................................................................................ 2 

The Honorable Bob Goodlatte, Virginia, Chairman, Committee on the Judiciary ......................................................................................................................... 4 

The Honorable John Conyers, Jr., Michigan, Ranking Member, Committee 

on the Judiciary ................................................................................................... 5 

WITNESSES 

Ms. Deborah A. Garza, Esq., Partner and Co-chair, Antitrust and Competition 

Law Practice Group, Covington & Burling LLP 

Oral Statement ................................................................................................. 8 

Prof. Koren W. Wong-Ervin, Esq., Director of the Global Antitrust Institute 

(GAI), Adjunct Professor of Law at Antonin Scalia Law School, George 

Mason University 

Oral Statement ................................................................................................. 10 

Mr. Alden Abbott, Esq., Deputy Director and the John, Barbara, and Victoria 

Rumpel Senior Legal Fellow Edwin Meese III Center for Legal and Judicial 

Studies, The Heritage Foundation 

Oral Statement ................................................................................................. 11 

Prof. Eleanor M. Fox, Esq. , Walter J. Derenberg Professor of Trade Regulation, New York University School of Law 

Oral Statement ................................................................................................. 13 

Mr. Randy M. Stutz, Esq., Associate General Counsel, American Antitrust 

Institute 

Oral Statement ................................................................................................. 14 

OFFICIAL HEARING RECORD 

Responses to Questions for the Record from Deborah A. Garza, Esq., Partner 

and Co-chair, Antitrust and Competition Law Practice Group, Covington 

& Burling LLP ...................................................................................................... 32 

Responses to Questions for the Record from Prof. Koren W. Wong-Ervin, 

Esq., Director of the Global Antitrust Institute (GAI), Adjunct Professor 

of Law at Antonin Scalia Law School, George Mason University .................... 35 

Responses to Questions for the Record Mr. Alden Abbott, Esq., Deputy Director and the John, Barbara, and Victoria Rumpel Senior Legal Fellow, 

Edwin Meese III Center for Legal and Judicial Studies, The Heritage 

Foundation ............................................................................................................ 43 

Responses to Questions for the Record from Prof. Eleanor M. Fox, Esq., 

Walter J. Derenberg Professor of Trade Regulation, New York University 

School of Law ........................................................................................................ 46 

Responses to Questions for the Record from Mr. Randy M. Stutz, Esq., Associate General Counsel American Antitrust Institute ........................................ 48 


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ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Statement for the Record from Greg S. Slater Vice President & Director of Antitrust, Standards and IP Policy Intel Corporation submitted by the Honorable Tom 

Marino, Pennsylvania, Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Committee on the Judiciary. This material is available 

at the Committee and can be accessed on the Committee Repository at: 

http://docs.house.gov/meetings/JU/JU05/20170629/105986/HHRG-115- 

JU05-20170629-SD010.pdf 

Hills & Company Letter submitted by the Honorable Tom Marino, Pennsylvania, 

Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law, 

Committee on the Judiciary. This material is available at the Committee and can 

be accessed on the Committee Repository at: 

http://docs.house.gov/meetings/JU/JU05/20170629/105986/HHRG-115- 

JU05-20170629-SD011.pdf 

ACT/The App Association Letter submitted by the Honorable Tom Marino, Pennsylvania, Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust 

Law, Committee on the Judiciary. This material is available at the Committee 

and can be accessed on the Committee Repository at: 

http://docs.house.gov/meetings/JU/JU05/20170629/105986/HHRG-115- 

JU05-20170629-SD012.pdf 

International Competition Policy Expert Group Report submitted by the Honorable 

Tom Marino, Pennsylvania, Chairman, Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law, Committee on the Judiciary. This material is 

available at the Committee and can be accessed on the Committee Repository at: 

http://docs.house.gov/meetings/JU/JU05/20170629/105986/HHRG-115- 

JU05-Wstate-GarzaD-20170629-SD001.pdf 


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RECENT TRENDS IN INTERNATIONAL 

ANTITRUST ENFORCEMENT 

THURSDAY, JUNE 29, 2017 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND

ANTITRUST LAW

COMMITTEE ON THE JUDICIARY

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2141, Rayburn House Office Building, Hon. Tom Marino [Chairman 

of the Subcommittee] presiding. 

Present: Representatives Marino, Goodlatte, Collins, Buck, 

Ratcliffe, Cicilline, Conyers, Johnson of Georgia, and Schneider. 

Staff Present: Ryan Dattilo, Counsel; Andrea Woodard (Lindsey), 

Clerk; Slade Bond, Minority Counsel; Joe Ehrenkrantz, Minority 

Professional Staff Member; and Perry Apelbaum, Minority Chief 

Counsel and Staff Director. 

Mr. MARINO. Good morning. The Subcommittee on Regulatory 

Reform, Commercial and Antitrust Law will come to order. On behalf of Mr. Cicilline and myself, I apologize for the two, three, or 

four times that this hearing has been postponed and rescheduled, 

but it is not like we were not doing anything. We had a lot of 

things going on and still do, but please accept our apologies. 

Without objection, the Chair is authorized to declare recesses of 

the committee at any time. Welcome, everyone, to today’s hearing 

on recent trends in international antitrust enforcement. And I now 

recognize myself for an opening statement. 

Antitrust and competition laws have existed in the United States 

since the late 1800s. It was not until the last 30 years, however, 

that the adoption of such laws began to spread globally. Today, 

nearly every Nation in the world has some form of antitrust or 

competition law. As a result of this global expansion, there have 

been efforts to enhance consistency and advance best practices 

through the establishment of several international organizations. 

These organizations include the International Competition Network, the Organization for Economic Cooperation and Development 

Competition Committee, and the United Nations Conference on 

Trade and Development. 

U.S. antitrust agencies have been active participants in these 

international organizations, with the goal of promoting consumer 

welfare and economic efficiency as the top priorities of competition 


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policy. Despite their efforts, consumer welfare and economic efficiency are only one aspect of a multitude of goals in the global antitrust regulatory environment. 

These goals frequently include several other unrelated factors. 

For example, competition rules in several foreign jurisdictions include inherently subjective concepts, such as protecting fair competition and social public interest, and even promoting the healthy 

development of the socialist market economy. 

These subjective factors often result in legal treatment of business conduct that differs profoundly on a case-by-case basis, as it 

is driven by political considerations. These differences have begun 

to have considerable impact on U.S. companies and citizens. In particular, there have been recent concerns relating to due process in 

foreign jurisdictions, the treatment of intellectual property rights, 

the imposition of extraterritorial remedies, and nonaction against 

state-owned enterprises and national champions. 

The recent report, issued by the International Competition Policy 

Expert Group and commissioned by the Chamber of Commerce, 

found that certain of our major trading partners appear to have 

used their laws to actually harm competition by U.S. companies, 

protecting their own markets from foreign competition, promoting 

national champions, forcing technology transfers, and, in some 

cases, denying U.S. companies fundamental due process. 

We convene today’s hearing to examine the enforcement of competition laws across the globe, with a focus on this report and recommendations to address these prevalent issues. It is essential we 

ensure that U.S. companies are treated fairly, consistently, and objectively by international jurisdictions. Today’s hearings will help 

us inform the committee regarding several recent trends in international competition law enforcement. 

Additionally, the hearing will provide us insight in how the administration and the executive agencies can coordinate with each 

other on the treatment of U.S. companies and citizens abroad. We 

have an excellent set of witnesses before us today, who will help 

us to evaluate these issues more fully and consider the next steps 

in addressing them. I look forward to our witnesses’ testimony. 

Mr. MARINO. The Chair now recognizes the Ranking Member of 

the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, Mr. Cicilline, former mayor in the State of Rhode Island, my friend, for his opening statement. 

Mr. CICILLINE. Thank you, Mr. Chairman, and welcome to our 

witnesses, and I too apologize for the inconvenience in scheduling, 

but really grateful that you are here. 

Today’s hearing will focus on a recently-issued report by the 

International Competition Policy Expert Group, concerning the 

need for fair, transparent, and impartial enforcement of competition laws internationally. The U.S. Chamber of Commerce commissioned this report for the purposes of developing recommendations 

for a potentially more effective and better-integrated international 

trade and competition law strategy. According to the report, there 

is increasing concern among American businesses that some major 

trading partners are, in some cases, denying foreign companies fundamental due process and, in other cases, applying their competiVerDate Sep 11 2014 01:17 Apr 26, 2018 Jkt 029794 PO 00000 Frm 00006 Fmt 6633 Sfmt 6602 E:\HR\OC\A794.XXX A794

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tion laws to protect their home markets from foreign competition, 

promote national champions, and/or force technology transfers. 

Although this report did not engage in fact finding or study of 

specific cases involving procedural unfairness, it made a series of 

recommendations to address this overarching concern. These recommendations include the establishment of a White House working 

group to study and address these concerns through targeted sanctions. While I agree that resolving procedural divergence in international antitrust enforcement is a laudable goal, I am concerned 

that the use of extraordinary trade remedies to resolve minor disputes may undermine our national interests. This is particularly 

true given that nations may not apply their own laws in a discriminatory manner against American companies under current law. 

For example, the dispute settlement body at the World Trade Organization has provided the U.S. with an avenue to pursue or defend trade disagreements. As of 2015, the United States was a direct party to 232 cases either as a complainant or as a respondent. 

The U.S. has won or settled without litigation a majority of these 

active cases. The United States has more than a century of experience in developing and expanding the antitrust laws. 

Over the past several decades, the United States antitrust agencies have relied on this experience to engage their international 

counterparts in ongoing, thoughtful dialogue to build consensus on 

advancing competition and reduce cross-border inconsistencies. 

These relationships are built on a foundation of trust and mutual 

respect. Whether it is a memorandum of understanding, a joint investigation, or just a phone call, international cooperation in criminal and civil enforcement depends on effective communication of 

shared goals to protect and promote competition. Bilateral cooperation may not work in every case, but it does preserve and strengthen the relationships that will be so crucial to successfully working 

together in the future, as former Assistant Attorney General 

Renata Hess observed last year. 

In contrast, using trade remedies to resolve the procedural concerns of American businesses in international proceedings could 

backfire. Abusive sanctions could have serious, unforeseen consequences and should be reserved, in my judgement, for egregious 

misconduct. I would also note that working toward substantive and 

procedural consistency should not be confused with seeking identical outcomes among the more than 130 international competition 

authorities. 

Earlier this year, together with Ranking Member Conyers and 

leaders of the Congressional Progressive Caucus, I sent a letter 

urging additional congressional appropriations for the purpose of 

reducing corporate concentration through the vigorous enforcement 

of the antitrust laws. As I noted then, there is mounting evidence 

of overall decline of antitrust enforcement in the United States 

over the past several decades, and the alarming result of this decline is increased costs and less choice for consumers, wage stagnation and depression for workers, diminished private investment, innovation and small business ownership, particularly among minorities, and reduced political freedom due to the outsized political influence of large corporations. 


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American companies should receive fair treatment abroad, but 

antitrust scrutiny is not in and of itself unfair or discriminatory. 

As Professor Fox will testify today, ‘‘Since standards of misuse of 

power differ, and the U.S. has one of the least interventionist monopoly laws in the world, these American firms may understandably feel that they are unfairly targeted by our sister trading partners.’’ Just like Congress may establish enforcement priorities 

through appropriations or antitrust exemptions, international systems may adjust their own enforcement priorities to align with national policy goals. 

I look forward to exploring these issues in today’s hearings. I 

thank our panel of expert witnesses for their testimony and input 

on this topic. I thank the Chairman for holding today’s hearing, 

and I yield back the balance of my time. 

Mr. MARINO. The Chair now recognizes the Chairman of the full 

Judiciary Committee, Mr. Goodlatte of Virginia, for his opening 

statement. 

Chairman GOODLATTE. Thank you, Mr. Chairman, I appreciate 

your holding this hearing. 

The Judiciary Committee routinely exercises its oversight authority to ensure that our Nation’s antitrust laws are applied in a 

manner that is transparent, fair, predictable, and reasonably stable 

over time. A natural extension of this oversight is ensuring that 

our Nation’s companies and citizens receive comparable treatment 

in foreign jurisdictions. As commerce becomes an increasingly global enterprise, the manner in which antitrust and competition laws 

are applied to companies and citizens located or engaged in business outside of the United States also grows in importance. 

Over the past several years, reports have surfaced that certain 

jurisdictions are deploying their antitrust and competition laws in 

manners that strain the boundaries of due process, focus on advancing domestic industrial policies, or seek to extract valuable 

American innovations without fair compensation. I would like to 

thank Chairman Marino for holding today’s hearing to delve into 

these potentially serious abuses and address potential solutions. 

Today’s testimony will help the committee gain a better understanding of the seriousness of these issues, and how they might be 

addressed. Furthermore, it will provide a record regarding how the 

administration and our executive agencies, including our antitrust 

enforcement agencies, can coordinate among each other and engage 

with foreign countries on international competition law enforcement. 

This hearing also serves as a reminder that the United States 

should be a leader in fair and reasonable antitrust enforcement. To 

that end, enacting important antitrust reforms, such as the 

SMARTER Act, will help to ensure that the U.S. continues to be 

an example to international competition law authorities. 

I look forward to hearing from today’s excellent panel of expert 

witnesses on these important issues, and I yield back. Thank you, 

Mr. Chairman. 

Mr. MARINO. Thank you. The Chair now recognizes the Ranking 

Member of the full Judiciary Committee, Mr. Conyers of Michigan, 

for his opening statement. 


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Mr. CONYERS. Thank you, Mr. Chairman. Top of the morning to 

the witnesses. We have got a full slate here, and it is appropriate, 

because international antitrust enforcement is a subject that we 

have not really neglected; we just have not got around to yet. And 

this is a good first step toward the inquiry and reexamination of 

a very complex subject. 

Now, given the increasingly interconnected economic relationships among nations, American firms depend on the fair enforcement of antitrust and competition laws by other countries as a critical factor with respect to their ability to do business abroad. Yet 

some American firms believe, in my view, that certain countries do 

not consistently apply their competition laws in a sound and nondiscriminatory manner. They allege a lack of due process and 

transparency, when these firms have become the target of antitrust 

investigations by competition authorities in those countries. Accordingly, we should keep the following points in mind as we discuss foreign antitrust enforcement practices. 

My greatest concern is whether and to what degree these problematic foreign antitrust enforcement practices impact American 

jobs. To the extent that foreign antitrust enforcement actions unfairly disadvantage American firms, and to the extent this results 

in American companies going out of business and American workers losing their jobs, I, of course, am deeply concerned, since jobs, 

justice, and peace is one of my rallying presentations across the 

years. 

The witnesses should provide us guidance on just how real and 

extensive this problem is. That being said, however, there are and 

should be limits to what we can insist on from other countries. 

When it comes to antitrust and competition policy, divergences in 

outlook and philosophy are not always rooted in a desire to protect 

national champions, or to discriminate against American firms. 

Various countries may be at different stages of development, with 

laws shaped by culture and historical circumstances that, of course, 

differ from ours. Where complaints about other countries’ laws simply reflect such differences, rather than concerns about discrimination, due process, or transparency, we should be careful about overstating our criticism and reaction. 

And finally, we must be careful not to provoke retaliation against 

American businesses with any effort to penalize or pressure any 

countries to change their enforcement practices. Many helpful recommendations have been made regarding how to address the concerns of American businesses about foreign antitrust enforcement 

practices. The best ones emphasize dialogue, multicultural standards, and agreements on best practices, and the promotion of cooperation among international antitrust enforcement agencies. 

An excessively punitive approach, however, may ultimately prove 

counterproductive and be harmful to American interests in the long 

run. So, I thank you for your presence here, and look forward with 

anticipation to this discussion. Thank you, Mr. Chairman. 

Mr. MARINO. Thank you. Without objection, other members’ 

opening statements will be made part of the record. 

Mr. MARINO. I will begin today’s hearing by swearing in our witnesses before I introduce you. If you would all please stand and 

raise your right hand. 


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Do you swear that the testimony that you are about to give before this committee is the truth, the whole truth, and nothing but 

the truth, so help you God? 

Please let the record reflect that all the witnesses have responded in the affirmative. Please be seated. Thank you. And if I 

mispronounce anyone’s name, please do not hesitate to tell me. 

Ms. GARZA. Thank you, Chairman. 

Mr. MARINO. Ms. Garza, I am going to introduce each of you 

first, and then ask you to make your statements. Ms. Garza is a 

partner at Covington & Burling, and the co-chair of the firm’s antitrust and competition law practice group. Ms. Garza has been involved in some of the largest antitrust matters, including the merger of Exxon and Mobil, and the U.S. Government’s suit against 

Microsoft, the USFL suit against the NFL, and many other litigation and regulatory matters on behalf of Fortune 500 companies. 

Before working at Covington, Ms. Garza served as Acting Assistant Attorney General in charge of the Antitrust Division at the Department of Justice, and also as Deputy Assistant Attorney General for Regulatory Affairs overseeing the matters in the telecommunications, transportation, energy, health care, agricultural, 

insurance, broadcast radio, real estate, and other industries. 

During two prior tours of service, Ms. Garza served as a special 

assistant, and as Chief of Staff and counselor to the Assistant Attorney General in charge of the Antitrust Division. Ms. Garza was 

also appointed by President George W. Bush to chair the Antitrust 

Modernization Commission, a bipartisan, blue-ribbon panel created 

by Congress to study and report to the President and Congress on 

the state of antitrust enforcement in the United States. Ms. Garza 

received her B.S. from Northern Illinois University and her J.D. 

from the University of Chicago. Welcome this morning. 

Professor Wong-Ervin is the Director of the Global Antitrust Institute and an adjunct professor of law at the Antonin Scalia Law 

School at George Mason University. Prior to joining GAI, Professor 

Wong-Ervin served as counsel for intellectual property and international antitrust in the Office of International Affairs at the Federal Trade Commission. She also served as an attorney advisor to 

Federal Trade Commissioner Joshua D. Wright. 

Prior to working at the Commission, Professor Wong-Ervin spent 

almost a decade in private practice, focusing on antitrust litigation 

and government investigations. She currently serves on the International Antitrust Task Force, the Antitrust Due Process Task 

Force of the ABA, and was previously co-chair of the ABA’s 2016 

Antitrust in Asia Conference. 

Professor Wong-Ervin is also coeditor of Competition Policy 

International’s North American column, and also serves as co-chair 

of the Federalist Society Antitrust and Consumer Protection Working Group for the Law and Innovation Project. Professor WongErvin received her bachelor’s degree from Santa Clara University 

and graduated second in her class from the University of California, Hastings College of Law, where she was associate editor of 

the Hastings Law Review. Welcome. 

Mr. Alden Abbott is the Rumpel Senior Legal Fellow and deputy 

director of the Meese Center for Legal and Judicial Studies at the 

Heritage Foundation. Prior to joining the Heritage Foundation, he 


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served as director of patent and antitrust strategy for Blackberry 

and in a variety of senior government positions, including director 

of antitrust policy for the Federal Trade Commission, acting general counsel of the Commerce Department, chief counsel for the 

National Telecommunications and Information Administration, and 

senior counsel in the Justice Department. 

Mr. Abbott is an adjunct professor at the Antonin Scalia Law 

School at George Mason University and was a Visiting Fellow at 

All Souls College, Oxford University, and a Wasserstein Fellow at 

Harvard Law School. He is also a member of the leadership of the 

American Bar Association Antitrust Section, and a nongovernmental advisor to the International Competition Network. Mr. Abbott received his bachelor’s degree from the University of Virginia, 

his master’s degree in economics from Georgetown University, and 

his J.D. from Harvard Law School. Nice to have you with us. 

Ms. Eleanor Fox is the Walter J. Derenberg Professor of Trade 

Regulation at the New York University School of Law. Before joining NYU Law, Professor Fox was a partner at the New York law 

firm Simpson Thacher & Bartlett. She has advised numerous 

younger antitrust jurisdictions, including South Africa, Egypt, Tanzania, Gambia, Indonesia, Russia, Poland, and Hungary, and the 

Common Market for Eastern and Southern Africa. 

Professor Fox was awarded an Inaugural Lifetime Achievement 

Award in 2011 by the Global Competition Review for substantial 

lasting and transformational impact on competition policy and or 

practice. She has served as a member of the International Competition Policy Advisory Committee for the Attorney General of the 

United States, Department of Justice, and as a Commissioner on 

President Carter’s National Commission for the Review of Antitrust Laws and Procedures. 

Professor Fox received her bachelor’s degree from Vassar College, 

her law degree from the New York University School of Law, and 

an honorary doctorate from the University of Paris and, here it 

goes, Dauphine. I did not take French. Welcome. 

Randy M. Stutz is the associate general counsel of the American 

Antitrust Institute, or AAI. Mr. Stutz has broad responsibilities 

across all of AAI’s research, education and advocacy programs. He 

has published numerous white papers, amicus briefs, and journal 

articles on important competition issues. He has also served as the 

coeditor of two handbooks, including the International Handbook 

on Private Enforcement of Competition Law. 

Prior to joining AAI, Mr. Stutz practiced antitrust law in the 

Washington, D.C., Office of Skadden, Arps, Slate, Meagher, & Flom 

LLP, where he consulted on merger and cartel investigations and 

multidistrict class actions. Mr. Stutz earned his bachelor’s degree 

in English from Washington University in St. Louis, and his J.D. 

with honors from the Catholic University Columbus School of Law. 

Welcome, sir. 

Each of our witnesses’ statements will be entered into the record 

in its entirety, but I ask each of you to summarize your statements 

in 5 minutes or less. And to help you, you see the lights in front 

of you; that will keep time. The light will switch from green to yellow, indicating that you have 1 minute to conclude your testimony, 

and when the light turns red, it indicates that your 5 minutes have 


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expired. And I know you are going to be concentrating on your comments, so when we start to get over the 5-minute mark, I will very 

diplomatically and politely raise the end of the gavel and give a little tap to give you an indication to please wrap up. 

Ms. Garza, please. 

STATEMENTS OF DEBORAH GARZA, ESQ., PARTNER AND CO– 

CHAIR, ANTITRUST AND COMPETITION LAW PRACTICE 

GROUP, COVINGTON & BURLING LLP; KOREN WONG–ERVIN, 

ESQ., DIRECTOR, GLOBAL ANTITRUST INSTITUTE (GAI), ADJUNCT PROFESSOR OF LAW, ANTONIN SCALIA LAW SCHOOL, 

GEORGE MASON UNIVERSITY; ALDEN ABBOTT, ESQ., DEPUTY DIRECTOR, EDWIN MEESE III CENTER FOR LEGAL AND 

JUDICIAL STUDIES, JOHN, BARBARA, AND VICTORIA 

RUMPEL SENIOR LEGAL FELLOW, THE HERITAGE FOUNDATION; RANDY STUTZ, ESQ., ASSOCIATE GENERAL COUNSEL, 

AMERICAN ANTITRUST INSTITUTE; AND ELEANOR FOX, WALTER J. DERENBERG PROFESSOR OF TRADE REGULATION, 

NEW YORK UNIVERSITY SCHOOL OF LAW 

STATEMENT OF DEBORAH GARZA 

Ms. GARZA. Thank you, Chairman Marino, Chairman Goodlatte, 

Ranking Member Cicilline, Ranking Member Conyers, and members of the Subcommittee. Thank you for inviting me to appear 

here today. I have had the pleasure of appearing before the Subcommittee in the past to testify on recommendations of the Antitrust Modernization Commission and in support of the SMARTER 

Act, and it is always an honor to be invited to address the Subcommittee and to witness the good, thoughtful work of its members 

and its staff. 

I am here today in my capacity as the antitrust co-chair of the 

International Competition Policy Expert Group, so named so that 

we could abbreviate it as ICPEG. ICPEG was a bipartisan volunteer group of 13 competition and international trade policy experts 

that was convened by the U.S. Chamber of Commerce in August 

of 2016 for this purpose: to consider how the U.S. can most effectively address the perceived misuse of competition law by some foreign jurisdictions that distorts international trade and harms U.S.- 

based companies. 

ICPEG’s members included distinguished academics and thinkers, like Professor Eleanor Fox, who is here today, who have studied and participated in the development of international competition and trade policy for decades, and former enforcers and policymakers from every prior Republican and Democratic administration in the past 36 years. And I would like to pause here to recognize Jim Rill, who was a member of ICPEG, that is here with us 

today. 

The chamber asked this diverse group to leverage our collective 

experience to develop practical and actionable steps forward that 

will serve to advance sound trade and competition policy. And that 

is what we did, with a remarkable degree of consensus. A copy of 

ICPEG’s resulting report and recommendations in our transmittal 

letter to the President and to the 115th Congress is attached to my 

statement. 


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My testimony today is limited to ICPEG’s report and recommendations. I am not speaking today on behalf of any specific 

client interest, and I am not prepared to talk about any particular 

investigation or enforcement matter. My testimony will be brief, because the ICPEG report and recommendations speak for themselves, and are consistent with my personal views. 

Simply put, there is a concern that certain of our major trading 

partners have, in some cases, denied foreign companies fundamental due process and, in other cases, applied their competition 

laws to protect their home markets from foreign competition to promote national champions, and/or to force the transfer of technology 

at royalty rates that favor local technology implementers. Such conduct has a significant unfair adverse impact on the ability of U.S. 

firms to compete at home and in global markets. Koren WongErvin, who is here testifying today, and Alden Abbott, have provided examples of some of these things in their testimony. 

Prior administrations have devoted substantial resources of the 

very highest political levels to address the problem, with some success. But it has been a difficult nut to crack, and requires persistent efforts and a multifaceted approach that engages both the 

competition and the trade law levels. Even for those who are wary 

of the use of trade rules recognize the need for a careful, integrated 

competition and trade law approach. As Professor Fox put it in her 

testimony, ‘‘It is time that officials from trade and competition sat 

down at the table and discussed strategies for the good of the country. We need to work toward a coherent trade and competition policy that, among other things, tackles unjustified State restraints 

and the distorting competition of privileged and cronyistic SOEs,’’ 

and I say, ‘‘Hear, Hear,’’ Eleanor. 

I will not go into any great length in describing the recommendations that ICPEG made. But I will say that the first six recommendations focused on the coordination of competition and 

international trade policy within the U.S. Government. We suggested that it be through a White House working group. Among 

other things, the working group would determine which international agreements should include competition chapters, including 

through amendment of existing agreements, what provisions 

should be included, and how those provisions should be enforced. 

The working group would also focus on how to most effectively ensure that other countries apply their competition laws in a manner 

that is consistent with accepted standards of process to ensure 

transparent, accurate, and impartial enforcement decisions. 

I recognize the concerns of some of the members of the Subcommittee about the effects of using trade sanctions and the effects 

of overreacting to issues. I will note that our report suggested 

many things that fall far short of imposing sanctions, and an example would be to have these competition chapters in these trade 

agreements that will create a framework for discussion and a less 

explosive way to deal with these problems as they arise. 

I thank you for your attention and look forward to answering 

your questions. 

Ms. Garza’s written statement is available at the Committee or 

on the Committee Repository at: http://docs.house.gov/meetings/ 


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JU/JU05/20170629/105986/HHRG-115-JU05-Wstate-GarzaD20170629.pdf 

Mr. MARINO. Thank you. Professor Wong-Ervin. 

STATEMENT OF KOREN WONG-ERVIN 

Ms. WONG-ERVIN. Thank you, Chairman Marino, Chairman 

Goodlatte, Ranking Member Cicilline, Ranking Member Conyers, 

and members of the Subcommittee. Thank you for the honor of appearing before you today. My testimony will begin with the discussion of the problem as framed by the chamber’s expert report, and 

then I will move on to possible solutions. 

To begin, I agree with the report that certain foreign governments appear to be using their competition laws in ways that unfairly harm U.S. companies and inappropriately reduce incentives 

to innovate. These include, first, denying U.S. companies fundamental due process. Second, in the case of intellectual property 

rights, using competition laws to reduce royalty payments by U.S. 

companies to unduly favor domestic manufacturers. And third, imposing unwarranted extra-jurisdictional remedies, namely global, 

portfolio-wide remedies on foreign conduct involving foreign patents. 

Examples of denials of due process include failure to notify the 

parties of the legal and the factual basis of an investigation, lack 

of an independent tribunal to review decisions, and the ability to 

stay remedies pending appeal. Refusal to allow parties to cross-examine witnesses at hearings, and failure to protect confidential information, and recognize attorney-client privilege and other important legal privileges. One case example from earlier this year is the 

Korea Fair Trade Commission’s decision against Qualcomm, in 

which the agency allegedly refused to allow the company to fully 

cross-examine witnesses at hearings, and sought to act as the 

world’s competition police by imposing global, worldwide remedies, 

including on U.S. patents. 

Moving on to possible solutions. Based on my experience at the 

U.S. Federal Trade Commission, it is my belief that public exposure, including expressions of concerns at the highest levels of our 

government, is one effective means to achieve the desired change. 

To that end, I favor the report’s recommendation to consider creating a listing mechanism for competition enforcement, akin to the 

USTR’s annual Special 301 listing of foreign nations that have inadequate IP protections. 

In my experience, the good news is that most foreign jurisdictions seem to want to be considered part of the international mainstream and respond to public statements of concerns. For example, 

the egregious alleged violations in China against U.S. companies, 

for example, reportedly locking them in rooms and ordering them 

to confess their sins under threat of refusing to return their passports, were remedied through a multipronged approach, which included a letter from the then-Secretary of the Treasury Department, followed by statements by President Obama to China’s President Xi. These public statements were followed by reportedly better 

process in China and also China abandoning its previously stated 

intention to impose extra-jurisdictional remedies. 


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Lastly, I agree with the report about the dangers of using vague 

and subjective standards such as fairness in other noncompetition 

goals, such as employment, or the healthy development of an economy. And I agree that the U.S. should continue to advocate for a 

consumer welfare standard as set forth by our Supreme Court. 

Consumer welfare is a broad concept that values what consumers 

are willing to pay for. It is also an important standard because it 

connects competition to the methodological commitments of economics in terms of giving theories that can be tested and rejected. 

Yet, as has been mentioned here today, many foreign jurisdictions 

currently explicitly provide for the consideration of noncompetition 

factors. I believe that an effective interim measure is to require 

transparency from these governments as to what factors they consider and how they are weighed and balanced. 

I have often found myself, when I am reading foreign competition 

decisions, as if there is missing pages. The analysis may start off 

sounding like mainstream competition analysis, but then the conclusions often lack any evidentiary support and leave me puzzling 

as to what industrial policy concerns or noncompetition factors may 

have influenced, or perhaps dictated, the outcome. I believe that requiring transparency and decision-making will go a long way to requiring accountability by foreign jurisdictions and providing some 

measure of predictability for our companies. Thank you. 

Ms. Wong-Ervin’s written statement is available at the Committee or on the Committee Repository at: http://docs.house.gov/ 

meetings/JU/JU05/20170629/105986/HHRG-115-JU05-WstateWong-ErvinK-20170629.pdf 

Mr. MARINO. Thank you. Mr. Abbott. 

STATEMENT OF ALDEN ABBOTT 

Mr. ABBOTT. Well, thank you. Chairman Marino, Chairman 

Goodlatte, Ranking Member Cicilline, Ranking Member Conyers, 

distinguished members of the Subcommittee, I am delighted to be 

asked to participate here today, and I applaud you for holding this 

hearing on a very important topic. I am here because I was asked 

to serve as rapporteur, or principal drafter, of the ICPEG report, 

which has already been discussed, which represented a consensus 

opinion of all the ICPEGs members, not anybody’s personal opinion. And by the way, again, I want to stress the views expressed 

today are my own and not necessarily those of the Heritage Foundation. 

As already emphasized, this was a bipartisan effort, and because 

it represented the views of trade experts as well as antitrust experts, it is not too surprising to find some report recommendations 

touching on the possible role of trade law as a remedy for harmful 

foreign misapplication of competition law. 

Now, as already mentioned, a key aspect of the report is its extensive discussion of consensus U.S. understanding of consumer 

welfare as the heart of antitrust law. This is reflected in the report’s first recommendation, which calls for the Trump administration to expressly confirm that, as an organizing principle, competition law and policy should focus on eliminating artificial impediments to competition, both private and governmental, as a way of 

promoting economic growth, innovation and consumer welfare. 


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And let me underscore the fact, the report strongly supports the 

ongoing excellent work, domestic and international work, of the two 

Federal antitrust agencies, the Federal Trade Commission and the 

Justice Department’s Antitrust Division. In calling for a White 

House working group, it does not call for the involvement of nonantitrust agencies or the White House in carrying out American 

antitrust agency investigations, or in the antitrust agencies making 

any policy determinations, in the antitrust agencies’ regular cooperation with foreign counterparts, or in any of the antitrust 

agencies’ periodic consultations involving competition authorities 

from around the world. 

Simply put, the report contains no language that would support 

curbing the independence of the Federal antitrust agencies in carrying out their statutory roles, which encompass antitrust-related 

law enforcement and policy functions. Basically, what the report 

calls for is better coordination of work on situations where a foreign nation’s alleged misuse of its competition law seriously impedes international trade and investment by posing an unreasonable, unjustified, or discriminatory burdens or restrictions on U.S. 

commerce. And it does this through a working group, the idea not 

being that the working group is going to seize authority, but that 

it is going to come up with sort of a measured, thoughtful way of 

looking at allegations, whether or not there is a working group. 

If a major U.S. company is concerned it is being treated unfairly 

overseas, people in Congress and in the administration from different agencies will be hearing about it. The notion of the working 

group is to create a structure by which the orderly views of the different departments around the executive branch and the independent agencies can be heard. And again, the notion of the working group is not to get in the way of what the U.S. antitrust agencies are doing in trying to improve things with their counterparts. 

The report also calls for additional work by multilateral institutions in which the U.S. is already heavily involved, including the 

Organization for Economic Cooperation Development, the World 

Bank, the International Competition Network, and the World 

Trade Organization. In particular, as already mentioned, the concern about shaming and naming, it calls for more peer-review studies, open analysis of the application of competition law, because I 

think it is safe to say there is sort of a general consensus view 

among international economists worldwide that consumer welfare 

is of central importance, so this is perhaps a way to point out to 

other agencies their need to keep that in mind. 

Already, reference has been made to intellectual property. I will 

just briefly mention, put in a plug for, the current Acting Chairman 

of the FTC, who has done a recent article in the Harvard Journal 

of Law and Technology on the problem of intellectual property and 

competition; well worth reading. 

That closes my statement. I would be pleased to take any questions you might have. Thank you so much. 

Mr. Abbott’s written statement is available at the Committee or 

on the Committee Repository at: http://docs.house.gov/meetings/ 

JU/JU05/20170629/105986/HHRG-115-JU05-Wstate-AbbottA20170629.pdf 

Mr. MARINO. Thank you. Professor Fox. 


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STATEMENT OF ELEANOR FOX 

Ms. FOX. Thank you very much. Chairman Marino, Chairman 

Goodlatte, Ranking Member Cicilline, Ranking Member Conyers, 

and distinguished members of the Subcommittee, thank you very 

much for the invitation to appear before you today. I was honored 

to be a member of the committee of experts that was organized by 

the U.S. Chamber of Commerce on which Deborah Garza and Andrew Shoyer were co-chairs, and Alden Abbott was reporter, and I 

want to thank them for the excellent work that they have done on 

the problem that we have before us. 

So, the problem that we have before us has, let us say, three 

parts. One is definition: what is the problem? Second is, how big 

is the problem? What kind of response does it call for? And third 

is what to do about it. So, I want to say a word about each. 

How big is the problem of U.S. trading partners using their competition laws in ways that are illegitimate and that hurt American 

business? I would like to enlarge the picture. The problem is that 

nations may use antitrust laws illegitimately outside of the bounds 

of proper antitrust, hurting other countries and their citizens. I 

want to include the U.S. in that paradigm. I think we are in a position today where we have to watch that our own country does not 

use antitrust politically. It has not yet, but one has to be alert, and 

the problem is on all sides. 

What exactly is the problem, and how big? First, there is a question of substantive law; our trading partners’, using substantive 

law, antitrust law, in an inappropriate way. Second, one could ask 

about industrial policy. Third, one could ask about nation-state restraints, like Chinese SOEs, or any country’s national government 

use of policy that is creating competition. And lastly, a word about 

discrimination or putting it to U.S. trading partners; is there discrimination against us? As to substantive law, my view is slightly 

different from the rest of my committee in terms of, should there 

be one particular focus, such as consumer welfare, for antitrust 

law? In my view, the problem is a bit larger in that almost every 

nation agrees that they are trying to make markets work better by 

their competition law that is just a little more elastic, giving countries and jurisdictions, even our own jurisdiction, a little more 

elbow room in defining what is hurting competition. 

Because I have a broader view of what is legitimately called 

‘‘harming competition’’, I also have a view that the problem before 

us may be a little narrower than many of my colleagues think. I 

think that we must respect how our trading partners formulate 

their competition laws, and it is not always how the U.S. formulates it. We must have respect for formulations that are, in general, 

within the confines of a good competition policy. 

Industrial policy: I think we should have respect for other nations’ choices except where nations are using their antitrust laws 

specifically to target us, and to hurt us. State restraints I will pass 

on now because of time. Discrimination, I think, is very hard to 

prove, that our trading partners are applying different rules to us 

than they are to their own companies, and, therefore, the problem 

as I see it is smaller. 

But there is a problem, and the problem, as my colleagues and 

panel members have said, includes lack of due process. There is 


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definitely a problem of illegitimate antitrust and antitrust without 

due process. What to do about it? In my view, the first best attack 

is to keep talking. Our competition agency heads in the United 

States have been very clear and very persuasive to other countries. 

Talking about good standards has worked; at least it has worked 

sometimes. I think that is definitely the first line of defense. 

I do not believe that trade remedies ought to be used as sanctions. I do not think they will work. They may lead to a race to 

the bottom. So, I do think there should be a working group. It 

might or might not be called a White House working group. There 

is a benefit to taking it out of a possibility of thinking of it politically. But there must be better integration between trade and competition. 

I want to recognize Jim Rill, who is here. When Jim Rill was 

head of the Antitrust Division and Carla Hills was the United 

States’ Trade Representative we saw perhaps the high point in the 

integration of trade and competition used at that time to open the 

Japanese market, among other things. 

Lastly, I want to say: I think the main thing that we have to do 

in antitrust is keep our eye on the fact competition does not know 

borders, and should not. We all gain when competition is free and 

open without borders, and not politicized. We all lose if we become 

sucked into a circle of tit-for-tat; you do this to us, we will do it 

to you. I trust our heads of competition, Department of Justice and 

Federal Trade Commission, who believe strongly in that principle. 

I trust them very much to carry on the conversation to call out illegitimate antitrust and to press on with what we have always had: 

a cosmopolitan antitrust. Thank you. 

Ms. Fox’s written statement is available at the Committee or on 

the Committee Repository at: http://docs.house.gov/meetings/JU/ 

JU05/20170629/105986/HHRG-115-JU05-Wstate-FoxE20170629.pdf 

Mr. MARINO. Thank you. Mr. Stutz. 

STATEMENT OF RANDY STUTZ 

Mr. STUTZ. Thank you. Chairman Marino, Chairman Goodlatte, 

Ranking Member Cicilline, Ranking Member Conyers, and members of the committee, I appreciate the opportunity to appear today 

on behalf of the American Antitrust Institute. 

The expert report commissioned by the Chamber of Commerce 

recognizes that U.S. businesses operating internationally face difficult challenges posed by the enforcement of foreign competition 

law. The report addresses allegations involving due process violations, foreign enforcement under subjective legal standards, and 

problematic extraterritorial remedies. But as I explain in more detail in my written testimony, there is a good-faith species and a 

bad-faith species of each of these allegations. It is important to distinguish between a foreign authority’s bad-faith denial of basic 

rights in pursuit of protectionism and its good-faith disagreements 

over appropriate legal standards, and how to assess market facts. 

With this in mind, there are four key points I wish to leave you 

with today. First, bad-faith conduct by foreign competition enforcers likely does require better coordination between U.S. trade and 

competition agencies. The AAI agrees that trade law, including posVerDate Sep 11 2014 01:17 Apr 26, 2018 Jkt 029794 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A794.XXX A794

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sibly the threat of trade sanctions, could be a valuable tool in addressing the bad-faith denial of fundamental rights like due process 

and equal protection in competition proceedings. Trade agencies 

have a strong claim to authority in these circumstances, because, 

in many respects, these are competition issues in name only. The 

behavior is equally problematic regardless of the antitrust standard 

that is being applied and regardless of whether a U.S. company has 

actually committed an antitrust violation. 

Second, the good-faith conduct of foreign enforcers requires a different policy response, even if some may think a foreign enforcer’s 

standards or remedies are very misguided. The most effective way 

to deal with good-faith divergences from U.S. standards is to empower the U.S. antitrust agencies to cooperate effectively with their 

foreign counterparts. I want to stress that this is not just a theory. 

The U.S. antitrust agencies know this from decades of experience, 

and they have the benefit of hindsight. 

Cooperative relationships with foreign enforcers going back to 

the 1970s have also helped preempt such divergences in the first 

place. Through cooperation, U.S. competition experts have been invited to participate directly in foreign policymaking. They have 

helped draft foreign competition laws, jointly develop best practices, and even train foreign judges and agency staff, and much 

more. Progress is sometimes slow and incremental, but I think everyone on this panel would agree it has been enormously successful 

in the long run. 

Third, creating a working group to improve coordination between 

U.S. trade and competition agencies is a good idea, in principle, but 

it has its limits. Generally speaking, the concept of a working 

group sounds mostly benign. But if we were to put a working group 

in the White House and give it government wide power to set international competition policy, we would create a massive lobbying 

target and risk politicizing competition law enforcement internationally. We would also send the wrong message to the rest of 

the world. 

In our words, we would be telling our trading partners to use an 

apolitical consumer welfare antitrust standard that protects competition, not competitors. But in our actions, we would be putting 

a political body in charge of international competition policy. And 

implicitly, we would be putting the threat of trade sanctions on the 

table at the behest of U.S. competitors. 

Our actions would speak louder than our words. We can expect 

our counterparts to respond in kind. We would risk losing our antitrust leadership status in the world, and worst of all we would imperil the U.S. antitrust agencies’ international cooperation efforts 

which have been most effective. Alternative approaches to a politicized working group, such as an interagency working group that 

has an advisory role, are worth exploring. 

Fourth and finally, it is important to remember that U.S. businesses operating internationally are sometimes mistreated in their 

capacity as buyers, not only in their capacity as sellers. Many U.S. 

manufacturers, for example, are dependent on global supply chains 

and have to do business with foreign cartels. When they do, foreign 

governments sometimes harm competition and U.S. competitors by 

refusing to enforce their antitrust laws. 


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To be fully effective, international competition policy reform 

should ensure that U.S. business victims are empowered to seek 

appropriate relief in U.S. court in these circumstances. Reform of 

this kind can help deter the proliferation of international cartels 

that are targeting American businesses and consumers. Finally, 

these reforms would complement many of the reforms discussed in 

the ICPEG report. 

I thank you for your time, and look forward to your questions. 

Mr. Stutz’s written statement is available at the Committee or 

on the Committee Repository at: http://docs.house.gov/meetings/ 

JU/JU05/20170629/105986/HHRG-115-JU05-Wstate-StutzR20170629.pdf. 

Mr. MARINO. Thank you very much. Now, it is time for Congress 

members to ask their 5 minutes of questioning. And we will begin 

with the Chairman of the full committee, Congressman Goodlatte. 

Chairman GOODLATTE. Thank you very much, Mr. Chairman. 

Mr. Abbott, I will start with you on this question, but I will ask 

all the panelists to chime in on this as well. 

So, we have been hearing a lot in this hearing about the problem 

of overly aggressive antitrust enforcement in some countries. But 

is it not true that weak or nonexistent antitrust enforcement can 

also be an international issue? For example, in May of 2015, 20 

members of this committee wrote a letter urging that the U.S. take 

action to remedy unfair competition from the three major Gulf Air 

carriers, Qatar, Emirates, and Etihad. In this instance, the three 

airlines are completely exempted from their countries’ competition 

laws, and as a result, they are able to control aspects of the airline 

industry in ways making it impossible for others to compete. 

So, are there not two sides to this problem? Is there precedent 

for antitrust enforcement against state-sponsored or state-owned 

enterprises? 

Mr. ABBOTT. Thanks for that question, Mr. Chairman. I think in 

principle, there should be. I will start with a quick analogy. The 

U.S. Foreign Sovereign Immunities Act does not apply to the commercial activities, say, of instrumentalities of a foreign sovereign. 

And it seems to me that if there is a direct, substantial, reasonably 

foreseeable effect on U.S. commerce from the activities of such instrumentalities, in principle there is a strong argument for applying jurisdiction. 

I will not get into it, there are some questions about doctrines 

such as foreign sovereign compulsion or the Act of State Doctrine, 

which are limitations, they are not really international law rules. 

They are really rules of abstention, in which courts, U.S. courts, 

agree not to interfere in foreign policy decisions committed to the 

executive branch. But it seems to me that there is no constitutional 

reason why we could not, if we chose, take jurisdiction when jurisdictional harm and appropriate contacts could be made out. 

Chairman GOODLATTE. Mr. Stutz. 

Mr. STUTZ. Thank you. This is, I think, a really important question. Non-enforcement is problematic in a variety of different ways. 

One of the issues that arises is an incentive problem. When, for example, a foreign cartel is injuring a U.S. business, oftentimes the 

host country of foreign cartel has no incentive to prosecute it. It is 

actually benefitting from the wealth transfer that is occurring from 


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a U.S. business to the host country. And so, that is why we have 

the effects test. It is a doctrine created in the 1940s by Judge 

Learned Hand. 

Chairman GOODLATTE. I have only got 2 minutes left, and I want 

three more people to chime in, so. 

Mr. STUTZ. Just to sum up, it is incredibly important that U.S. 

victims and the U.S. government have the ability to bring cases 

internationally. 

Chairman GOODLATTE. Thank you. Ms. Garza. 

Ms. GARZA. Not to repeat what has already been said, but to say 

something new: this is an example, I think, of where you can use 

the trade function of our U.S. government to help solve a problem. 

For example, in trade agreements it is not uncommon in the competition chapter or another jurisdiction to commit to the enforcement of antitrust laws to allow for a non-distortive free competition, including by SOE. So, I agree with you that in some cases, 

trade can be distorted by the fact that you do not have sound antitrust enforcement within another jurisdiction. That is something 

that we should continue to work on, both from the antitrust enforcement and from the trade perspective. 

Chairman GOODLATTE. Thank you. Professor Wong-Ervin. 

Ms. WONG-ERVIN. Thank you for the question. So, I agree with 

the report that addresses this, that calls for the Trump administration to support the establishment of an ICN working group on this 

serious issue of anticompetitive harm caused by state-owned enterprises. The OECD in a 2010 study reported that SOEs are often 

the recipients of State aids, and, in many countries, the largest 

share of these subsidies is devoted to preserving lossmaking SOEs. 

Chairman GOODLATTE. Thank you. And Professor Fox. 

Ms. FOX. Thank you. I agree there is a problem of under-enforcement, and this is a particular problem in cases where there are 

State measures, or SOEs, state-owned enterprises, to which the 

antitrust laws are sometimes not applied. Our laws should be applied against state-owned enterprises when they are acting in a 

commercial interest. 

In addition, I agree with Deborah Garza. There is much room for 

an integrated trade and competition committee to focus on exactly 

the problem of State restraints, which is usually foreign restraints 

that hurt us, it could be vice versa. And I would cite in particular, 

the Vitamin C case in which, so far in the litigation, China has 

been allowed essentially to immunize an export cartel into the 

United States, hurting Americans directly. 

Chairman GOODLATTE. Thank you. Mr. Chairman, my time has 

expired, but I do think that it is well worth exploring the underlying issue here, which is allowing state-owned enterprises to do 

business in the United States. We shy strongly away from, not that 

we have never done it, but we have very little in the way of Staterun enterprises in the United States domestically. But they have 

to compete with foreign competition, and that has all the benefits 

of that State subsidy, and sovereignty that goes with it. Thank you, 

Mr. Chairman. 

Mr. MARINO. Mr. Cicilline has graciously deferred to the Ranking 

Member, but Mr. Collins has to the Rules hearing meeting, and 


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Mr. Conyers has graciously agreed to allow Mr. Collins to ask his 

questions for 5 minutes. So, thank you, both of you. 

Mr. COLLINS. Thank you all for the courtesy of both sides, and 

I appreciate it, Mr. Chairman. And again, I think, just focusing on 

the issue here of developing, you know, what is happening in the 

international realm, and how they are antitrust, and keeping this 

very open as far as how do we address this and how do we not. 

I think, you know, it is really also something we need to understand. Antitrust laws were enacted for the protection of competition, not competitors. And I think that is something as we look at, 

and this is, you know, Supreme Court actually saying that as well, 

so. And the concern is foreign countries are not doing that. They 

are using it basically to harm, in many ways, the markets, or 

shake the markets, if you would. 

And Ms. Garza, in your testimony, there was a recommendation 

from the White House working group that was meant to produce 

a form in which sound and coherent trade and competition policies 

could be forged, not create an antitrust czar to direct antitrust enforcement decisions. Can you elaborate on that, please? 

Ms. GARZA. Sure. I was really addressing the concern that was 

raised by Randy and Eleanor and that I have heard in the past. 

That is not what we are calling for, an antitrust czar in the White 

House to direct antitrust policy. That is definitely not what our recommendation is. Our concern is, basically, as has been said here 

today, to address this question of the misuse, potential misuse, of 

antitrust law and lack of process that we have experienced in other 

jurisdictions, and to make sure that the administration, through all 

of its resources, including on the trade side as well as on the antitrust enforcement side, are marshaled to focus on this issue. 

So, the focus of our group was not domestic antitrust enforcement. It was a question of how do we help to further our efforts 

to ensure that the 130 other nations that have antitrust laws are 

not misusing them in a way that distorts trade and harms U.S. 

companies. 

Mr. COLLINS. Okay, and keeping with that, I think you brought 

up a good point. And I think when you are looking at our situation, 

Mr. Abbott, how can we, as the U.S., better situate ourselves to 

deal with this emerging issue as it is continued here, you know, to 

counter preventing proper foreign enforcement actions? Then, we 

will go to Ms. Fox, we will just sort of catch her on the line here. 

Mr. ABBOTT. Sure, that is a good question, Congressman. I think, 

you know, part of the recommendation was that we act a lot more 

vigorously to get the international bodies we are already involved 

in to highlight, to do peer review studies, and to emphasize those 

issues. And perhaps, you know, a working group could not just in 

the bilateral antitrust discussions, but in perhaps higher-level government discussions, raise these issues directly. I think it was already mentioned that President Obama raised an issue with the 

Chinese government about lack of due process, about locking people 

up in rooms. There needs to be, perhaps, more of that, and perhaps 

more public attention, and public statements about that, you know, 

in context of international meetings, bilateral. Not to tell governments what to do, but to raise the concerns at a much higher level. 


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Mr. COLLINS. Ms. Fox, I am going to elaborate further. The question here is, are we dealing, then, more with an emphasis from the 

administration, from Congress? Is this a fix that we need to do in 

more a diplomatic sense, or is this something that there is a legislative fix, or is there a policy fix? Take Mr. Abbott, and take that, 

that is a great answer, I was just curious. Let us follow that logical 

step. What do you think? Push the button. There you go. 

Ms. FOX. One should first understand what one means by misuse. It is used in at least two different senses. One sense it is used 

is: our trading partners are not following, for example, U.S. principles of monopolization law. Some people call that misuse, and I 

do not. If that is the question and some nations are applying their 

law in a way, for example, that privileges contestability of markets, 

I think that the answer is talk, between the competition agencies 

to try to get accepted their point of view. If they do not get it accepted in the international marketplace, maybe it is not right, or 

maybe it is just not the way most people do it, and we have to live 

with that if it is within the area of protecting robust markets. 

If it is, the kind of atrocities that Alden Abbott just mentioned, 

that is a serious problem that probably does need a higher level 

and a higher push. Starting with an integrated committee of trade 

and competition is a good idea. 

Mr. COLLINS. Well, you have definitely found the city for talk and 

integrated committees. So, we can definitely look at that. Ms. 

Wong-Ervin, I know I am running out of time. I think the biggest 

thing what we need to focus on is those examples that are always 

out there, but I think the focus of this hearing is a proper one, and 

saying, ‘‘What is our response, what is the U.S.’s response, how are 

we dealing with it internationally, how are we dealing with it, you 

know, internally’’. But also say, ‘‘Is there ways that we can also, 

as we already are, with the leaders, especially in many of these 

areas where they are being challenged?’’ I guess is the best way to 

put that. 

So, I think, we are the leaders there, let us continue to do so, 

and I appreciate the opportunity to ask these questions. And I appreciate again the kindness of the Chair and the Ranking Member 

and others. Thank you. I yield back. 

Mr. MARINO. The Chair now recognizes the Ranking Member of 

the full committee, Congressman Conyers. 

Mr. CONYERS. Thank you very much. I think today’s hearing is 

the beginning of an examination and, for some people a reexamination, of antitrust laws, American antitrust laws. I want to ask generally for any of you or all of you that want to respond, how is our 

country doing in terms of developing a fair antitrust policy in comparison to other countries? In other words, how does this thing 

rank globally? And any of you may start it off, and continue it. 

Ms. WONG-ERVIN. Thank you for the question. I think that the 

U.S. is a leader in this field. We saw a revolution in our courts in 

the ’60s and ’70s, aligning antitrust with economics, with consumer 

welfare, which is a broad concept, which really values what consumers are willing to pay for. And I think that that linking it to 

an economic concept, and getting away from vague and subjective 

standards that can be misused and abused by agencies, really gave 

a credibility to the U.S., and really helped to, you know, promote 


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what competition is about, which is about consumers and lower 

prices and better products. 

Mr. CONYERS. Yeah, but how do we stack up with other countries? Are they looking to us for leadership? Or do they think, as 

the leading capitalist Nation in the world, I mean, we may come 

off in a poor light. I mean, after all, everybody is not into capitalism. And you know, I am reading between editions of review articles that we are failing in some respects, and that we are doing 

great in others, and I have never had five people with your backgrounds to give me a little free advice. Which direction are we 

going in, and what more should we be doing on this subject? And 

I will look at Professor Fox to start us off, and let everybody who 

wants to chime in. And if you do not want to answer it, that is 

okay, too. 

Ms. FOX. Thank you, Congressman, for that very interesting 

question. How is the U.S. doing in its fair competition policy compared with others in the world? In cartels, such as price-fixing 

agreements, we are up there; gold standard; number one. In monopolization, abuse of dominance, I think, unfortunately, the U.S. 

has lost leadership by becoming very conservative, and not finding 

very much that a dominant firm does is illegal. The European 

Union standard has gotten more prominence in the world. It focuses more on access to markets by those who have been excluded. 

I think that is, in the world, perceived as more fair. 

What we should be doing, though, is a very difficult question, because this is law formation, it goes through our courts, it goes up 

to the Supreme Court. Our Supreme Court has handed down decisions that fit with the narrow view of what should be illegal as monopolization. 

Mr. CONYERS. Well, that is a good start. Where do you come in, 

Attorney Stutz? 

Mr. STUTZ. Thank you for the question. I think it is possible to 

admire the coherence and principled nature of the U.S. Approach 

to antitrust law, and at the same time feel concerned about some 

of the results it has wrought. We have a large concentration problem in this country. Competition is declining in a lot of sectors. It 

is understandable, perhaps, that other countries would look to the 

United States and seek to experiment. And there has been a lot of 

interest in finding ways to more aggressively enforce the antitrust 

laws in a principled way, and I support that. 

Mr. ABBOTT. Very briefly, Congressman, I think with all due respect, I do not believe that competition has diminished. I think that 

some recent economic research, I know that claims have been made 

in the last year, too. I just do not think the best recent economic 

research supports that. And more generally, I think there needs to 

be a real concern that overemphasis on, and it is true, lots of countries emulate Europe, they have an administrative system, but 

overemphasis on analyzing actions that do not harm consumers directly or do not deny access, and there has been some of that, could 

dis-incentivize innovation, and then harm our leading competitors. 

Mr. CONYERS. Anybody else? We have 193 countries, and we 

have 130 standards. The little countries, they look at a discussion 

like the one we are having this morning, and say, ‘‘We cannot even 

get in the door.’’ I mean, there is such a disparity between the big 


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nations and the little nations. And I feel a little bit uncomfortable, 

because the little nations, I mean, people say, well, who cares, and 

who asked you to get in here, anyway? This is my last try at trying 

to put this into some perspective. 

Ms. GARZA. May I take a shot? 

Mr. CONYERS. Please. 

Ms. GARZA. So, two things. One is, just to be clear, I do not think 

it is the smaller economies that are the problem here. It is actually 

some of the larger economies that are throwing their weight 

around. 

But the other thing I would say is that competition law has actually been very good for some of these younger and smaller economies. I have had the honor of being able to participate through the 

years in the International Competition Network and other international fora, and have met and talked to, as have other people 

here, Eleanor, Koren, Alden, Jim Rill, a lot of those enforcers in 

countries in Africa, in South America, in Asia. And they recognize 

that a sound competition law is actually good for them, because it 

frees up the ability of their economy to grow. It removes artificial 

barriers to competition. It allows the spread of better distribution 

of wealth. It allows for innovation. 

So, competition law, we really feel, is good for not just the big 

developed economies, but is good for the smaller economies. Not 

having distortion of international trade, that benefits them. So, I 

have actually seen that there is a fair amount of consensus that 

has developed in all of these international fora about the value of 

antitrust competition for even those economies. For especially those 

economies. 

Mr. CONYERS. Mr. Chairman, I am troubled by the fact that 

there is such an extreme difference between the big nations and 

the little nations. And I resist the notion that the little ones are 

going to be very grateful to us for being so thorough and fair and 

concerned. Look, capitalism does not work like that, I mean, in my 

political perspective. Everybody has got to turn in some profit, or 

you are going to be hitting the door. And this sounds like a very 

mild discussion we are having, and for some reason I feel that 

there is some huge considerations about the differences laying 

around out here that we have got to get into, and we probably will. 

What can five members of Congress do with five expert witnesses 

in a couple hours? So, what can you tell me that will make me feel 

more satisfied than I am at the present moment? 

Ms. FOX. Congressman, thank you again. I think there is a huge 

problem that you have put your finger on—that little countries 

have needs that are not recognized, and not recognized by the U.S. 

model of competition. This does not mean the U.S. model is wrong 

for the U.S. There are some problems of jurisdiction, there are 

some problems of simply inability of the small countries to, for example, enforce their law against cartels coming from the developed 

countries. The developed countries ought to have a rule that they 

cannot have cartels even they do not hurt Americans. If they hurt 

only Africans, if they are clear, illegal cartels in the U.S., it should 

be illegal in the U.S.; that should be stopped where the action is. 

Right now, it is very hard for small countries to defend themselves, 


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and there are many actions that are targeted against small developing countries. 

Second, if you look at monopolization. As you pointed out, there 

are many small countries that have very different circumstances on 

the ground of what are the barriers to competition. They have 

many more barriers, they have excluded many, many people for a 

long time; they need laws that are more inclusive; that focus more 

on exclusionary behavior. There are laws, formulations, that can be 

against exclusionary behavior, and helping competition, not protecting inefficient competitors. 

So, I think the first line is that we, as a country, ought to recognize that, and we ought to recognize that some countries need different standards than the way the U.S. has applied them. Thank 

you. 

Mr. CONYERS. Mr. Chairman, you have been very good to me, 

and I appreciate it. I want the witnesses to know that there is 

going to be trouble with some people getting their full amount of 

sleep tonight as a result of what has gone on here in the House 

Judiciary Committee this morning, and I thank you very, very 

much for your presence. 

Mr. MARINO. The Chair now recognizes the gentleman from Colorado, Congressman Buck. 

Mr. BUCK. Thank you, Mr. Chairman. And I want to thank the 

witnesses for being here. Professor Wong-Ervin, I listened to your 

testimony, and you mentioned the Korean sanctions against 

Qualcomm, and I read your testimony, and you also not only mentioned the Korean sanctions against Qualcomm, but also the Chinese sanctions against Qualcomm. I did not read in there a dispute 

that Qualcomm had, in fact, engaged in anticompetitive behavior, 

but rather an analysis of the sanctions against them as being over 

broad. And I should note, I believe that Taiwan is investigating 

Qualcomm’s anticompetitive behavior. The European Union as well 

as the United States FTC are all doing that. 

You are not suggesting, are you, that the fact that a foreign government has found a United States corporation to have engaged in 

anticompetitive behavior, that that in and of itself is somehow 

wrong or unfair? 

Ms. WONG-ERVIN. Thank you for the question. No, I am not. So, 

many of the examples I gave, some were against Qualcomm, some 

were involved with Microsoft, Nokia, there are several others involving Merck, A.Z., Ericsson. They all have in common the lack of 

an effects-based approach; the lack of evidence of any actual harm 

to the competitive process or consumers. So, for example, the Chinese decision against Qualcomm was based on excessive pricing, 

something that we do not do in the United States. We do not regulate price, particularly with IP, because we do not want to harm 

incentives to innovate, and because high prices alone do not harm 

competition. In fact, they can signal to a market that this market 

is profitable, and you should enter and increase entry. 

Mr. BUCK. And I do not mean to cut you off, but I only have a 

limited amount of time, and I am not sure that I will receive the 

same treatment from the Chair if I do go over, so I want to make 

sure that I ask a few more questions. But Apple is also suing 


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Qualcomm, are they not, for a dispute concerning competitive behavior with their licenses? Is that right? 

Ms. WONG-ERVIN. Yes, I believe that. 

Mr. BUCK. Okay. Do you know of any investigation of 

Qualcomm’s anticompetitive behavior by the EU, Taiwan, the 

United States, that has been fully investigated, and where a country has come to the conclusion that Qualcomm has not engaged in 

anticompetitive behavior? 

Ms. WONG-ERVIN. Where an investigation has been dismissed? 

Mr. BUCK. After a full investigation? 

Ms. WONG-ERVIN. After a full investigation, I do not. And many 

of the ones you mentioned, like you said, are just in the beginning 

stages. The one in the U.S. is just, you know, the government just 

pled its case; they still have to prove its case. 

Mr. BUCK. But there is some threshold to even begin an investigation. There has to be some evidence that would lead a government agency to direct resources to do that, would there not? 

Ms. WONG-ERVIN. Not in other countries. So, in China and elsewhere, they are obliged to investigate when there are complainants. So, remember, China is largely an implementer of technology, 

not an innovator, and they have a lot of manufacturers that complain and say, ‘‘I want lower royalties.’’ And so, they are obligated; 

they do not have to have a good-faith basis that they have to investigate. 

Mr. BUCK. Mr. Stutz, I want to ask you a quick question. What 

are the ramifications to the United States in terms of retaliation 

if the United States acts, either through a trade policy or otherwise, with a foreign country to benefit a particular United States 

corporation? 

Mr. STUTZ. Thank you for the question, Congressman. I think the 

obvious, immediate risk is retaliation. And just the adoption of a 

political stance toward competition policy, rather than a law enforcement orientation. 

Mr. BUCK. Now, would that retaliation involve just one United 

States company, or would it involve many United States companies 

and affect our economy in terms of workers, employment, and our 

ability to trade with that foreign country? 

Mr. STUTZ. Thank you for the question. I think it should be seen 

as a risk, that there would be a policy response, rather than an individual response to a particular matter. I do think it bears mentioning, with respect to disputes involving multiple authorities investigating, you know, a single entity like Qualcomm, it is important to remember that oftentimes there are not disputes in antitrust standards between countries. Oftentimes, they agree. In the 

area of standard essential patent abuse, there is a widespread consensus among enforcers, at least, that this is problematic and that 

competition law should address it. 

So, oftentimes, when there is extraterritorial remedies, lots of 

countries investigating a single defendant, you can have a lot of efficiencies with a single remedy that can resolve universal concerns. 

So, it cuts both ways. 

Mr. BUCK. Thank you for your answer, and Mr. Chairman, I 

yield back. 


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Mr. MARINO. The Chair now recognizes the Ranking Member of 

the Subcommittee, Congressman Cicilline. 

Mr. CICILLINE. Thank you, and thank you again to the witnesses. 

I would like to begin, Professor Fox, you mentioned that the United 

States might well be on its way to using antitrust laws to achieve 

nationalistic ends, and sort of warned us about that. Could you 

speak a little more to that, of what concerns you are referring to? 

Ms. FOX. Yes, I mentioned I have this concern, and I also mentioned I have not seen it happen yet. It is a general concern that 

simply comes out of, for example, meetings of the highest executive 

with merger parties, who agreed to invest in America. I have the 

uneasy feeling that at some point that might be taken into account 

in letting a merger through lightly. So, I am only saying, be on 

alert. 

Mr. CICILLINE. I know. I understand. 

Ms. FOX. I think the head, the acting Chair of our FTC, in my 

view, clearly would not cave in lightly. The nominee for Justice Department Antitrust would not cave in lightly. But I just say, be on 

alert, because if that should happen, rule of law unravels and titfor-tat could happen. 

Mr. CICILLINE. Yeah, absolutely. And I think that is what makes 

the suggestion that we do everything that we can, and I think everyone has suggested, to depoliticize this work as much as we can. 

And so, Mr. Stutz, you mentioned maybe the idea of an integrated 

kind of interagency advisory role might be the best way to preserve 

the integrity of the work, but also reduce the likelihood that it becomes politicized in a way which would undermine the arguments 

we are trying to make to our trading partners around the world. 

Mr. STUTZ. That is right, thank you for the question. And I want 

to stress, I very much agree and admire the expert report’s approach to thinking about the need for coordination and to conduct 

an examination into how competition and trade policies fit together, and how these agencies can more effectively function by cooperating with one another. 

I think there is a devil in the details in how you do the working 

group. There is a way to approach achieving those coordination 

benefits without putting the risk of politicizing on the table. And 

so, you know, I think an important point to remember is that not 

all decisions in competition and trade policy are necessarily susceptible to group decisionmaking. Sometimes, it is more effective to 

empower a single expert, or, in this case, an expert agency, to lead. 

And in my view, when you are dealing with good-faith disagreements over technical questions like antitrust standards and antitrust remedies, the U.S. agencies need to be empowered to set policy. 

Mr. CICILLINE. Yeah, and I think the thing that strikes me from 

the testimony of all the witnesses is that we have really four categories of cases in sort of our disagreements that would arise. One 

would be for countries that share our antitrust laws and the framework that we have, and enforce it evenly against U.S. companies, 

and everyone else, which is of no concern to us. That is sort of the 

best kind of trading partner. The second group is people who share 

our standards, and have a framework which is similar to the 

United States, but apply it unfairly against the U.S. company as 


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compared to their own companies, which is bad-faith, and, I think, 

obviously of concern. The third is a country that does not share our 

standards, has a different set of standards than we might use, but 

applies it evenly to everyone, which is complicated. And then, the 

fourth area is maybe the worst, they do not share our standards 

and they apply it worse against the U.S. 

But it seems to me we have to have the ability to understand 

those differences and shape remedies that reflect that. And what 

I wonder if, Professor Wong-Ervin, you mentioned, and I think Professor Fox, the notion of trying to create at least some transparency 

in the way that we have seen success with the TIP Report, obviously, in a different area, trafficking in persons. Where at least 

there is a kind of standard that has developed, and some information about how the country meets a standard in terms of seriously 

responding to the issue of human trafficking. This would be a lot 

more complicated, because you have to acknowledge what is the 

standard? Is due process available? Are there anticompetitive policies? Are they being applied evenly even if they are bad policies? 

But it would seem like if we could agree on the creation of that 

report, it might be a good way to, at least, educate kind of the 

international community and American consumers and businesses 

what the landscape is. And then, you know, encourage people to 

kind of think about wanting to improve where they stand on that 

report. And I would be curious to know what the panel thinks 

about that kind of approach as part of what we might do. Maybe 

start with Professor Fox. 

Ms. FOX. Thank you, Congressman. Yes, transparency would go 

a very long way. Transparency is a part of due process. If standards are transparent, that is the first step. And a second step is 

simply transparent but different. Lots of conversation to argue one 

way or the other that there is a better standard, and taking into 

account when countries cannot agree. 

Ms. WONG-ERVIN. I agree, thank you for the question, that it 

would be an effective interim measure to require this transparency. 

But in the long run, I think it is important for trading partners to 

understand the tradeoffs, right, the tradeoffs of considering noncompetition factors, are the difficulties of weighing and balancing 

various factors across different markets, it can actually undermine 

consumer welfare, and undermine clear and predictable antitrust. 

So, I think we should to continue to advocate for a consumer welfare standard, but in the interim require transparency. 

Mr. CICILLINE. Thank you very much, and I yield back, Mr. 

Chairman. 

Mr. MARINO. The Chair now recognizes the gentleman from 

Texas, Congressman Ratcliffe. 

Mr. RATCLIFFE. Thank you, Mr. Chairman, I thank the witnesses 

for being here. Ms. Garza, as you stated in your written testimony, 

one of the concerns here is the misapplication of foreign antitrust 

laws by some of our trading partners to protect their home markets 

from competition, to protect their national champions, and to force 

the transfer of technology at royalty rates that favor local technology implementers. One of the solutions that the ICPEG report 

talks about is for the U.S. to consider recommending that the 

OECD and other multilateral bodies adopt minimum due process 


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guarantees. And you in your testimony suggested that the administration should continue and strengthen both bilateral and multilateral efforts to establish standards, and ensure that other countries 

abide by them. 

So, in the context of trade law, I think we have seen that this 

administration is emphasizing the need to shift away from broader 

multilateral trade agreements towards more narrow, bilateral 

trade agreements as a way to protect America’s interests. I want 

your perspective on how significant a role bilateral agreements 

play compared to the multilateral approaches in the context of antitrust law, and what would be the impact of a shift that the administration is proposing. 

Ms. GARZA. Well, that may be a little bit above my ability to respond. But I think what we recommended in the ICPEG report was 

a combined approach. Basically, working within multinational entities on multicountry agreements, but also on a bilateral basis. 

If the trend was to go to bilateral agreements, we could achieve 

our ends through those bilateral agreements through competition 

chapters. You know, having an understanding with the other country that the agreement is with about standards. And they could be 

if you had an effort to develop an international consensus on certain minimum standards, that could be a reference point. So, the 

multinational activities should continue to take place, and they 

really create the context and reference for the bilateral agreements. 

I do not know if that answers your question. 

Mr. RATCLIFFE. It does. Let me move it from theoretical into 

practice. So, one of the report recommendations is the evaluation 

of trade agreements and the further assessment of the inclusion of 

competition chapters, as you mentioned. And right now, NAFTA is 

currently being renegotiated, so what is your view on including a 

competition chapter in NAFTA? 

Ms. GARZA. So, the view of ICPEG was that it would be very 

helpful. I think there may be a competition chapter in NAFTA, too. 

But what has happened with these competition chapters, as I understand it, is progressively they have gotten better and better. 

And so, I think, one of the things that we had suggested was that 

this working group take a look at what should be in, ideally, these 

competition chapters. And to the extent that the administration is 

about to renegotiate or reopen any of these agreements, it would 

be good to have in mind what could be put in these chapters. 

And so, the nice thing about having these chapters is that you 

have a built-in framework for discussion, when you think that 

there have been violations and potential solutions, how do we resolve disputes. We do not necessarily have that right now, so you 

can have a problem, but the antitrust enforcement agencies are 

really ill-suited to do anything to really address it. And you could 

address it on an ad hoc basis, but that has difficulties, too. 

So, the notion is, step back, look at what we would ideally want, 

put it into these bilateral or multilateral agreements, and increase 

your ability when things come up to address them early, and to address them effectively to have a meeting of the minds as to how 

you are going to address them. 

So, we think that that could actually be very helpful in resolving 

the issues going forward. 


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Mr. RATCLIFFE. Thanks very much. Professor Wong-Ervin, Professor Fox, as I understand her testimony, it is that she does not 

think that the United States has the one right mold for antitrust 

rules and standards, or the balance between antitrust laws and intellectual property rights. Do you agree with that assessment? 

Ms. WONG-ERVIN. I do not. I think that the U.S. is a leader in 

innovation, and a lot of that is because of our incentives to innovate. I also think the Supreme Court correctly recognized the errors of the concerns about false positives, or type one errors, and 

the idea that it is more dangerous to intervene when it is unwarranted, than to not intervene, because the market can more readily 

correct, than when courts or agencies intervene inappropriately. 

Mr. RATCLIFFE. Thanks very much. I will yield back. 

Mr. MARINO. Thank you. The Chair recognizes the Congressman 

from Georgia, Mr. Hank Johnson. 

Mr. JOHNSON of Georgia. Thank you, Mr. Chairman, and I thank 

you all for your testimony today. I think we can agree that there 

should be more integration between global trade and antitrust policies; laws and agreements between nations. I take it from what you 

all have said that you all would agree with that statement. And 

also, that we must respect how foreign trading partners formulate 

and apply their antitrust laws. We must respect that, but if they 

fall short, then there should be name and shame applied from the 

highest levels of our government. In other words, public disclosure 

of abusive practices and applications by foreign governments of 

their own laws. I think we can all agree on that. 

What I want to ask the panel is, to what extent do the Trump 

policies and pronouncements of ‘‘America First,’’ the rhetoric and 

the policies that ensue from that, the policies to withdraw from negotiations for the TPP, the threats surrounding NAFTA made by 

the President; to what extent do the rhetoric and practices of this 

administration have on foreign governments and their mindset in 

terms of applying their own antitrust laws? Professor Fox? 

Ms. FOX. Thank you. I think the announcement of ‘‘my country 

first’’ is not fortunate, and it is not limited to the United States. 

We are in a world today where many countries across the world 

have a ‘‘my country first’’ policy. 

Mr. JOHNSON of Georgia. The U.S. being the leading trade partner, and the preeminent antitrust enforcement regimen, what does 

it say when we stoop to the level of ‘‘America First?’’ 

Ms. FOX. If it means that we will uphold conduct by our companies and apply a different standard to the rest of the world, it is 

a very negative message. It can mean other things. I am hopeful 

maybe it would mean other things. But if it does mean nationalism 

and parochialism, and this applies to the trade agreements you 

mentioned, it is bad for America. America gains from these trade 

agreements; America would have gained from the Trans-Pacific 

Partnership. 

I want to add here that the competition chapter and the SOE 

chapter in the Trans-Pacific Partnership are very well done and 

very important, and can be models for whenever we are ready 

again to have multilateral agreements. 


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Mr. JOHNSON of Georgia. Okay, thank you. I hate to cut you off, 

Professor Fox, but I wanted to get Professor Wong-Ervin’s view on 

that. 

Ms. WONG-ERVIN. Sure, thank you for the question. So as part 

of my job, what I do is I train foreign enforcers and judges around 

the world. My institute trained over 300 last year, primarily in 

China. And I get this question a lot, and my answer is that I am 

optimistic that antitrust has remained largely nonpolitical, across 

administrations. 

Mr. JOHNSON of Georgia. But it seems that we are headed in the 

opposite direction under this current administration. Would you 

agree? 

Ms. WONG-ERVIN. I am hopeful that the appointees for the Department of Justice Antitrust and the Acting Chair, particularly I 

know the Acting Chair of the FTC, that they are—— 

Mr. JOHNSON of Georgia. I must interrupt you. Let me move to 

Ms. Garza, and let me get a straight answer from Ms. Garza. 

Ms. GARZA. A straight answer, okay. All right, what I will say 

is, I recognize the concern, but I do not think we have seen any 

evidence yet of a problem. 

Mr. JOHNSON of Georgia. Okay, thank you, thank you, Ms. 

Garza. Mr. Abbott, I am trying to do this within my five minutes. 

Mr. ABBOTT. Congressman, I think I will second Ms. Garza. I 

know there is some discussion, but I agree. 

Mr. JOHNSON of Georgia. Okay, thank you, Mr. Abbott. And last 

but not least, Mr. Stutz, who appeared to be very intense in his desire to respond. 

Mr. STUTZ. Well, thank you, Congressman. Time being what it 

is, I will just say that the merits of nationalistic policies are more 

debatable in other contexts, but it is important to remember that 

antitrust is law enforcement, and it needs to be driven by facts and 

law. And that is critically important, and it becomes dangerous to 

apply policy in a law-enforcement context. 

Mr. JOHNSON of Georgia. Thank you. I yield back, Mr. Chairman. 

Mr. MARINO. Thank you. I recognize myself for questioning. I am 

not a supporter of NAFTA. I have seen what it has done to my district, significantly, and people on both sides of the party, people not 

involved in politics, how much they have been out of work. And I 

think it is about time we have a President that stands up and says, 

‘‘U.S. First.’’ We have tremendous trade deficits with other countries, that we have not even approached over the last 8 years. 

So, each of you can respond if you would like to this question, 

or the statement that I am going to make. How do you deal with 

countries, whether they are democracies or whether they are dictatorships, to follow the rules? Do you actually think that China is 

going to sit down, and we throw this word ‘‘transparency’’ around 

like it is the panacea; do you actually think China is going to be 

transparent with us? Do you actually think other countries are 

going to be transparent? This is about profit. This is about making 

sure that whoever, such as China, as they did with Qualcomm; this 

is about profit. I wonder if China is going to reduce its prices based 

on how they force or are forcing U.S. companies to lower their 

prices. You do not see that. 


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So, let us get down to where the rubber meets the road, and give 

me just one example, other than penalizing countries, whether it 

is through sanctions, whether it is through trade, on how to play 

on a level playing field. Ms. Garza. 

Ms. GARZA. The issue that you have identified is really part of 

the impetus for our report, which is to say that there are some 

things that you can deal with through talk, and through the antitrust enforcement agencies, and there are other things, other instances, where you cannot. So, with respect to China, China has an 

antitrust enforcement agency that the U.S. and Europe have 

worked with, but a lot of their decisions are not being driven by 

the conclusions of their competition law enforcement agency, they 

are being driven by different conclusions. And so, part of what the 

group felt was that when you have decisions being taken at that 

level by another jurisdiction, you have to meet them at that level. 

You know, it is, like, I cannot take a knife to a gun fight, right? 

So, with their dealing with it at that level, we have to deal with 

it at that level. 

And during the Obama administration, that happened, in fact. 

And part of what we are saying is, to the new Congress and to the 

new administration, let us talk about what we have seen over the 

last 8 years, let us try to get this right. We realize that there are 

a lot of issues competing for your attention and resources, we think 

that this is a good issue. You are focused on trade, you are focused 

on ‘‘America First,’’ this is a component of that, and why we recommended that there be a focused look at that, integrate competition, and also trade, and think about how to deal with the issue 

that you have raised, in a smart way, and in an effective way. 

Mr. MARINO. Professor. 

Ms. WONG-ERVIN. Thank you for the excellent question. So, I 

serve as a scholar in a prominent Chinese university, and there is 

a member who is of the expert advisory committee. And I was told 

by him by many other people that China was horrified when President Obama and when others made these public statements of concern, that they want to be considered as part of the mainstream, 

they are worried about their credibility, and that it did make a big 

difference. I agree, though, that it is about profit and about lower 

prices for them, and I think this needs a multipronged solution. 

Mr. MARINO. Mr. Abbott. 

Mr. ABBOTT. Mr. Chairman, I sort of echo what Ms. Garza said. 

If you really believe that something has been driven purely politically, and it is doing real harm, certainly the U.S. has some statutory authority. It is not saying when you should use them, but 

there are things like Section 301 of the Trade Act, which allows for 

some retaliation. Not saying in any case, but it is out there, and 

in the appropriate times might be weighed. 

Also, there are cases, for instance the merger of two state-owned 

Chinese enterprises we think will harm competition in the U.S., 

you could take antitrust action against that. There is also ways of 

blocking imports under Section 337 of the Tariff Act if they violate 

U.S. patent rights and impair competition. We have not raised 

that, but there are a number of tools out there that at least merit 

consideration. 

Mr. MARINO. Professor. 


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Ms. FOX. Thank you. I think this is exactly the question that an 

integrated working group would try to deal with. It is very hard 

to deal with. I want to echo remarks that Professor Wong-Ervin 

made about Chinese enforcers who really want to abide by international standards, and the people on the ground cannot always 

get their way. But they have made progress. The more they really 

want to abide by international standards, including holding SOEs 

to account, the more we gain somewhat in a level playing field. 

How to deal with the fact that the highest ministries of China are 

pushing for unlevel nationalistic policy is a very big, high-level 

question. 

Mr. MARINO. Mr. Stutz. 

Mr. STUTZ. Thank you, Mr. Chairman. I want to read a short 

quote from the Deputy Assistant Attorney General Debbie Platt 

Majoras after a high-profile divergence in a high-profile merger 

case between the United States and EU. They reached different 

conclusions on the same merger. She said, ‘‘We recognize that we 

and the EU will not always agree, and that our way is not always 

best. We have no power to change EU law other than by persuasion, and vice versa.’’ 

That is a really important point. Even when we are talking about 

sanctions and more aggressive tactics, ultimately we have no power 

other than to persuade. And so, I think it is extremely important 

that we think about what is most effective, and how we can persuade. And it is my view that when there are aggressive bad-faith 

acts by our trading partners, we may want to consider aggressive 

responses, but the past has shown that when we are dealing with 

good-faith differences, cooperation is more effective. Thank you. 

Mr. MARINO. I think the U.S. on its own would have a tremendous impact on this, but we cannot change the minds of the leaders 

in China. What that is going to take is a unified effort of most of 

the countries around the world, to let China know that we will 

come together and move as one, if China wants to continue to 

abuse these antitrade issues. In numbers, there is strength. 

So, with that, this concludes today’s hearing. I want to thank all 

of you for attending. It has been very enlightening; we could probably spend the next 6 hours here talking about these issues. But 

I think we have started something here today that we can take 

that ball and run with it. 

So, without objection, all members will have 5 legislative days to 

submit additional written questions for the witnesses, or additional 

materials for the record. This hearing is adjourned. Thank you. 

[Whereupon, at 11:49 a.m., the Subcommittee was adjourned.] 


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