COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.07.1997 
COM(97) 346 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
AND THE EUROPEAN PARLIAMENT 
ON THE APPLICATION OF THE 
Agreement between 
the European Communities and 
the Government of the United States of America 
regarding the application of their competition laws 
1 July 1996 to 31 December 1996 

REPORT ON THE APPLICATION OF THE EC/US AGREEMENT PAGE I 
COMMISSION REPORT TO 
THE COUNCIL AND THE EUROPEAN PARLIAMENT 
ON THE APPLICATION OF THE 
Agreement between 
the European Communities and 
the Government of the United States of America 
regarding the application of their competition laws 
1 July 1996 to 31 December 1996 
1. INTRODUCTION 
On 23 September 1991 the Commission concluded an Agreement with the Government of 
the United States of America regarding the application of their competition laws1 ("the 
Agreement"). By a joint decision of the Council and the Commission of 10 April 19952 the 
Agreement was approved and declared applicable from the date it was first signed by the 
Commission. 
On 8 October 1996 the Commission adopted the first report on the application of the 
Agreement for the period 10 April 1995 to 30 June 19963. This present report completes the 1996 
calendar year, covering the period of 1 July 1996 to 31 December 1996 and is intended to 
supplement the first report. It was decided to report on this relatively short period of six months so 
that in subsequent years it will be possible to report on the same calendar year as the Annual Report 
on Competition Policy. 
This report should be read in conjunction with the first report which sets out in detail the 
main provisions of the Agreement and the advantages and limitations of cooperation. 
1 Agreement between the Government of the United States of America and the Commission 
of the European Communities regarding the application of their competition laws (OJ L 95, 
27.4.95, pp.47 - 50). 
2 See OJ L 95, 27.4.95, pp.45 and 46. 
3 Com (96)479final. 
REPORT ON THE APPLICATION OF TÎ m EC/US AGREEMENT PAGE ?. 
2. COOPERATION UNDER THE AGREEMENT 
2.1 Notifications 
2.1.1 Number of cases notified. 
Notifications were made by the Commission to the US authorities in twenty-seven cases 
during the period between 1 July 1996 and 31 December 1996 These cases, divided into merger 
and non-merger cases, are listed in Annex 1. Of the twenty-seven cases notified by the Commission 
eighteen were merger cases. 
During the same period, the Commission received notifications from the US authorities in 
twenty-one cases, ten from the Antitrust Division of the US Department of Justice ("the BoJ") and 
eleven from the Federal Trade Commission ("the FTC"). These cases, in so fer as they have been 
made public by the US authorities, are listed in Annex 2 and again are divided into merger and non-
merger cases. Of the twenty-one cases notified by the US agencies to the Commission seventeen 
were merger cases. 
The figures given represent the number of cases in which a first notification took place 
during the period under review and not the total number of notifications. Under Article II of the 
Agreement, notifications are made at a number of specified stages and so several notifications may 
be made concerning the same case. 
Table 1 sets out in figures the notifications made under the Agreement and the OECD 
Recommendation during the six month period of 1 July 1996 to 31 December 1996. Table 2 sets 
out in figures the notifications made under the Agreement and the OECD Recommendation since 
23 September 1991. 
NOTIFICATIONS 
Table 1 
Year No. of EC No. of US No. of Merger 
notifications notifications notifications 
FTC DoJ 
1/7/%- 27 11 10 (=21) 18(EC) + 17(US) 
31/12/96 
4 A distinction has not been made between notifications made under the 1991 
Agreement and those made under the Revised OECD Recommendation of 27 & 28 July 1995 
due to the partly overlapping nature of these two instruments. 
REPORT ON THE APPLICATION OF THE EC7US AGREEMENT PAGE 3 
Table 2 
Year No. of EC 
notifications No. of US 
notifications 
FTC DoJ No. of Merger 
notifications 
1991 
1992 
1993 
1994 
1995 
1996 5 
26 
44 
29 
42 
48 10 
20 
22 
16 
14 
20 2 (=12) 
20 (=40) 
18 (=40) 
19 (=35) 
21(=35) 
18 (=38) 3(EC) + 9(US) 
11(EC) + 31(US) 
20(EC) + 20(US) 
18(EC) + 20(US) 
31(EC)+18(US) 
35(EC) + 27(US) 
2.1.2 Notifications to the Member States. 
To ensure that Member States are kept duly informed the Commission has continued to 
send copies of notifications received from the US authorities and notifications sent by the 
Commission to any Member State whose interests are affected. The Commission also informs 
interested Member States of any cooperation that has occurred in an individual case and the nature 
of that cooperation. 
2.2 Cooperation 
Cooperation between the Commission and its counterparts in the United States has 
continued to be very positive and has contributed greatly to the effective resolution of a number of 
cases. 
Due to the short period of time under review many of the cases involving cooperation 
under the Agreement are still ongoing and so cannot be discussed in detail or mentioned by name in 
this report. 
2.2.1 Timing 
Contacts between the Commission and the US agencies are often established at a very early 
stage where a common interest has been identified. It is not unusual for contacts to be established 
even before official procedures have been activated or a case opened. Case handlers have found it 
helpful to be aware of the other authority's intended approach to an individual case right from the 
beginning. The authorities have also continued to inform each other on the timing of their 
respective investigations and procedures. The advantages of this approach were outlined in the first 
report on cooperation (paragraph 4.1). 
REPORT ON THE APPLICATION OF THE EC/US AGREEMENT PAGE 4 
2.2.2 Supply of non-confidential background information 
Non-confidential information supplied by both parties has been particularly helpful in 
drawing attention to possible anticompetitive behaviour. The Commission has opened an ex-officio 
investigation under Article 85 in a high technology industry following the supply of non-confidential 
background information by the DoJ. This information included US media reports which were not 
readily available in Europe. 
For the first time under the Agreement the competition authorities have commenced 
cooperation in a cartel investigation. The US have supplied background non-confidential 
information on a cartel which they have already successfully prosecuted. Cooperation between the 
authorities is still ongoing. This is an important development in particular due to the high pricrity 
given by both the Commission and the US agencies to the elimination of cartels. However, where 
the US authorities have obtained a judgment on the basis of a plea bargain only a severely limited 
amount of information will have been made publicly available. This restriction on the availability of 
information may limit the extent of cooperation. 
2.2.3 Mergers notified to both the Commission and the US authorities 
Proposed mergers which were notified to both the Commission and the US agencies 
provided ample scope for cooperation and the exchange of opinions. Two merger investigations 
which were closed in the period under review and which provided scope for cooperation are 
Sandoz/Ciba-Geigy and Baxter/lmmuno. Cooperation occurred despite difficulties encountered 
due to the different time scales in place in the US and in the EU and the existence, in some cases, of 
objectively different market conditions which have often justified different, but compatible, 
solutions. 
Cooperation in the Sandoz/Ciba-Geigy merger involved detailed discussions on the various 
product markets in the areas of pharmaceuticals, animai health, crop protection and seeds, as well 
as on how each party defined the geographical markets. Discussions also concerned to a large 
extent the terms on which the merger could be approved. The parties granted a waiver for the 
exchange of confidential information in certain sectors. Contacts were regular and the discussions 
on settlement were of great importance in attempting to ensure that both the Commission and the 
FTC sought undertakings from the parties that were compatible. Difficulties arose due to the 
different time scales applicable in the EC and the US. The Commission was obliged under the 
Merger Regulation to come to a decision in July 1996 while the FTC did not conclude its 
investigation until 3 January 1997 when it entered into a consent decree with the parties. In the 
circumstances the agencies cooperated as best they could and in the final analysis the undertakings 
sought separately by both the Commission and the FTC are not contradictory. 
2.2.4 Allowing one authority to take the lead 
The investigation into the practices of AC Nielsen Company ("Nielsen"), a provider of retail 
tracking services, provides a clear example of successful cooperation between the Commission and 
the US Department of Justice and anticipates a new pattern of cooperation. Both the Commission 
REPORT ON TI IE APIM.H 'ATION OK THE KCA is AGREEMENT I'AHI; ;> 
and the DoJ received a complaint from IRI that Nielsen was abusing its dominant position in 
Europe and thus prevented IRI from establishing a competitive presence there. During the 
investigation the case handlers from both authorities were in close contact, exchanging documents 
as well as points of view on different aspects of the case. The ability of the authorities to cooperate 
was greatly enhanced by the waivers which were obtained from both IRI and Nielsen permitting the 
exchange of confidential information. 
As the complaint was primarily addressed to contractual practices implemented in Europe 
and had its greatest impact within Europe, the DoJ let the Commission take the lead once it was 
confident that it had a firm intention to act. The Commission conducted negotiations with Nielsen 
to arrive at an acceptable solution ensuring that competition was not distorted. At every stage 
during negotiations the DoJ was informed of progress and given an opportunity to comment on the 
undertakings it was proposed to seek from Nielsen. Once the Commission had secured the 
necessary undertakings from Nielsen, the DoJ was able to conclude that the practices it had been 
investigating would not continue, and thus it closed its investigation. 
Although the US did not request the Commission to take action in the IRI/Nielsen case, the 
approach taken by the US of standing back and awaiting the results of the Commission's 
investigation may provide an example of how positive comity may operate in the future. 
3. NEW DEVELOPMENTS 
In light of the 1996 communication from the Commission to the Council entitled "Towards 
an International Framework of Competition Rules"5 the Commission has continued to seek to 
strengthen cooperation between competition authorities around the world by both building a 
network of bilateral agreements and promoting common competition rules at the multilateral level 
in the WTO and OECD. 
On the 25th of October 1996 the Commission was granted a mandate by the Council to 
enter into negotiations with the United States in order to reach an agreement which would 
strengthen the positive comity provisions of the 1991 bilateral Agreement on cooperation in the 
application of competition laws. 
Negotiations have been extremely productive and a draft Agreement, provisionally 
approved by the US authorities, has been submitted to the EC Member States, industry and other 
interested parties to obtain their views. It is expected that the Council, having received the opinion 
of the European Parliament, will approve the Agreement in the course of 1997. 
The draft Agreement provides that a competition authority will normally defer or suspend 
its own enforcement activities in respect of certain anti-competitive activities which occur 
principally in and are directed principally towards the other Party's territory, where that other Party 
is prepared to deal with the matter. 
Com(96) 284 final 
REPORT ON THE APPLICATION OK THE KC/US AGREEMENT PAGE 6 
4. BILATERAL MEETING 
There was a high level meeting in Washington on the 16th of October 1996 between 
officials from the Commission, the FTC and the DoJ. 
A number of wide ranging issues were dealt with during the bilateral meeting, including, 
cooperation and notification issues, the draft Positive Comity Agreement, proposed amendments to 
policy and legislation, cartels, air transport, télécoms and media, the EU proposal in the WTO on 
competition policy and the New Transatlantic Agenda and Transatlantic Business Dialogue 
proposals on competition. 
5. CONCLUSIONS 
The Agreement continues to provide a framework for meaningful and useful cooperation 
between the Commission and the United States. The cooperation that was described in the first 
report to the Council and the European Parliament has continued to bring benefits on both sides of 
the Atlantic. Benefits, not only to the competition authorities but also to the companies involved. 
It is everyone's interest that compatible solutions be found. This has been particularly true in 
merger cases, where parties have been willing to grant waivers allowing the exchange of 
confidential information. 
In the IRI/Nielsen case it was clearly in the complainant's interest to facilitate cooperation 
between the Commission and the DoJ to ensure that a remedy was put in place as quickly and 
effectively as possible. It is interesting to note that it was also in the defendant company's interest 
to avoid lengthy investigations and the risk of incompatible remedies being imposed by both the 
Commission and the DoJ. In this instance both the complainant and the company under 
investigation granted waivers permitting the exchange of confidential information. 
However, while a good deal of cooperation can take place without the exchange of 
confidential information, in cases where a waiver cannot be obtained, the effectiveness of 
cooperation may be curtailed. For example, difficulties may arise in explaining the suitability of a 
particular remedy if the confidential information justifying that decision cannot be discussed. At 
present it is not possible for the Commission and the US authorities to exchange confidential 
information due to the existence of confidentiality rules in domestic legislation. Before measures 
can be taken to remove these legal obstacles to the exchange of information, it is necessary to 
address the real concerns expressed by Member States and the business community on the 
safeguards which could be provided to information exchanged under a future cooperation 
agreement. The Commission is at present studying the safeguards which can be provided under US 
law and the possibility of overcoming the existing obstacles to the exchange of confidential 
information. The exchange of confidential information would be particularly useful in the 
investigation of international cartels, where the companies involved are unlikely to grant waivers for 
the exchange of confidential information and problems may be encountered in the collection of 
incriminating evidence. 
REPORT ON THE APPLICATION OF THE EC/US AGREEMENT PAGE 7 
ANNEX 1 
NOTIFICATIONS BY THE EUROPEAN COMMISSION TO THE US AUTHORITIES 
01.07.96 - 31.12.966 
Merger Cases: 
1. IV/M.747 - Chevron Corp/British Gas/NOVA Corp./NGC Corp. 
2. IV/M.734 - Melitta /Dow - Newco 
3. IV/M.727 - BP/Mobil 
4. IV/M.774 - Saint Gobain / Wacker Chemie / NOM 
5. IV/M.800 - Siemens/Sommer Allibert Industrie 
6. IV/M.706 - GEC Alsthom/AEG 
7. IV/M.823 - John Deere Capital Corp/Lombard North Central pic 
8. IV/M. 829 - Thyssen / Bôhler Uddeholm 
9. IV/M. 821 - Baxter / Immuno 
10. IV/M.779 - Bertelsmann / CLT 
11. IV/M.836 - Gillette / Duracell 
12. IV/M. 826 - ESPN/STAR 
13. IV/M. 794 - Coca-Cola/Amalgamated Beverages 
14. IV/M. 841 - Lagardere / Thomson-CSF 
15. IV/M.865 - Cable & Wireless/Nynex/Bell Canada 
16. IV/36.213 - GEAE / Pratt & Whitney 
17. IV/M.773 - Westinghouse / Equipos Nucleares 
18. IV/M.862 - Textron / Kautex 
6 Due to confidentiality requirements, this list includes only those investigations or cases 
which have been made public. 
UI-PORTONTin-APPLICATION oi'Tiiii I'.C/US AtiRHHMHNT PAOH H 
ANNEX 1 (continued) 
NOTIFICATIONS BY THE EUROPEAN COMMISSION TO THE US AUTHORITIES 
01.07.96 - 31.12.96 
Non-merger cases: 
1. Air Transport agreements 
2. IV/35.134 - trans-Atlantic Conference Agreement 
3. IV/35.962 - De Agostini - Rand McNally 
4. IV/4722, 33690 - Caterpillar 
5. IV/36.183/F-3 - Coca-Cola Enterprises Inc/Amalgamated Beverages Great Britain Ltd 
6. IV/D-5/35.935 - Murex/Chiron + 4 
7. IV/36.194 - Digital Video Discs 
8. IV/36.089 - British Airways / American Airlines 
9. IV730.373R-P&I Clubs 
RliPORT ON THK APPLICATION OF TMi KC/US AGIUiliMENT PAUK 9 
ANNEX 2 
NOTIFICATIONS BY US AUTHORITIES TO THE EUROPEAN COMMISSION 
01.07.96 - 31.12.967 
Merger cases: 
1. Lucas Industries pic / Variety Corp. 
2. Tilcon Inc. / Oldcastle Northeast Inc. 
3. National Medical Care Inc / Fresenius AG 
4. Metal Levé S.A. / Mahle GmbH 
5. KoJbenschmidt AG / T&N pic 
6. Soivay SA / American Home Products Corp. 
7. Immuno International AG / Baxter International Inc. 
8. General Electric Company / Pratt & Whitney / United Technologies Corp. 
9. Sandoz / Ciba-Geigy 
7 Due to confidentiality requirements, this list includes only those US investigations or 
cases which have been made public by the US authorities. 
RKPORT ON THE APPLICATION OF THIi KCAJS AGREEMENT PAGE 10 
ANNEX 2 (continued) 
NOTIFICATIONS BY US AUTHORITIES TO THE EUROPEAN COMMISSION 
01.07.96 - 31.12.968 
Non-merger cases: 
1. International Association of Conference Interpreters 
2. Lykes Bros. Steamship Co Inc / Universal Shippers Association 
3. A&L Mayer Associates Inc 
B Due to confidentiality requirements, this list includes only those US investigations or 
cases which have been made public by the US authorities 

ISSN 0254-1475 
COM(97) 346 final 
DOCUMENTS 
EN 11 08 10 
Catalogue number : CB-CO-97-339-EN-C 
ISBN 92-78-21982-7 
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