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 January 1997 to 31 December 1997)
Date: 1998-09-03
Institutions: European Commission
Subjects: United States, competition law, competition policy, cooperation agreement (EU), exchange of information

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 03.09.1998 
COM(1998) 510 final 

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 January 1997 to 31 December 1997 

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 Imvs 

1 January  1997 to 31 December  1997 

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  1991 Agreement"),  the  aim  of  which  is to  promote  cooperation 
between  the  competition  authorities.  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 signed by the Commission. 

On 8 October  1996 the Commission  adopted the first  report on the application  of 
the  Agreement  for  the  period  of  10  April  1995  to  30  June  19963.  The  second  report 
completes  the  1996  calendar  year,  covering  the  period  of  1 July  1996 to  31  December 
19964. The present report covers the calendar  year from  1 January  1997 to 31 December 
1997.  This  report  should  be  read  in  conjunction  with  the  first  report  which  sets  out  in 
detail the benefits, but also the limitations of this kind 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 
and 50) 

2 

See OJ L 95, 27.4.95, pp.45 and 46. 

3  Com(96) 479 final, see XXVIth Report on Competition Policy, pp. 299-311. 

4  Com(96) 346 final, see XXVIth Report on Competition Policy, pp. 312-318. 

2. 

MAIN AREAS OF COOPERATION UNDER THE 1991 AGREEMENT 

Case  specific  EC/US  cooperation  pursuant  to  the  provisions  of  the  1991 

Agreement is carried out in the following main areas: 

° 

notification  of  cases  handled by the competition  authorities  of  one  party,  when 
these  cases  concern  important  interests  of  the  other  Party  (Article  II),  and 
exchange of information on general matters relating to the implementation of the 
competition rules (Article III); 

The exchange  of basic  information  in the form  of  notification,  or in  less  formal 
ways,  is  the  clearest  obligation  stemming  from  the  agreement.  The  agreement 
provides for an alert system whereby each party notifies  its partner when it deals 
with  cases  which  may  affect  important  interests  of  the  latter.  Successive 
notifications  may occur in the same case: e.g.  in a merger case we  shall  notify at 
the outset of the case, then, when appropriate, when  the Commission  decides  to 
initiate proceedings and, eventually, " far enough in advance ...to enable the other 
Party's views to be taken into account", before a final decision is adopted. 

° 

coordination of the actions of both Parties' competition authorities (Article IV); 

Provisions  on  coordination  of enforcement  activities  are also very  important.  In 
all  cases  of  mutual  interest  it  has become  the  norm  to  establish  contacts  at the 
outset  in  order  to  exchange  views  and,  when  appropriate,  to  coordinate 
enforcement  activities.  The  respective  approaches  on  the  definition  of  relevant 
markets are very often  central to the discussions. The parties will often  exchange 
views  on  possible  remedies  in  order  to  ensure  that  they  do  not  conflict. 
Cooperation  may  also,  in  certain  cases,  help  to  clarify  a  point  of  foreign  law 
relevant to the interpretation of an agreement or to the effectiveness  of a remedy. 
Factual elements relevant to the case are also exchanged within the limits of legal 
constraints  on the protection of confidential  information.  Cooperation  under this 
heading  has recently  involved  a successful  synchronisation  of  investigations  and 
searches5.  This  is  designed  to  make  fact-finding  action  more  effective.  It  also 
helps  prevent  companies  suspected  of  cartel  activity  from  destroying  evidence 
located  in  the  territory  of  the  agency  investigating  the  same  conduct  after  its 
counterpart on the other side of the Atlantic has acted. 

° 

so-called  "traditional  comity"  provisions  by  virtue  of  which  each  Party 
undertakes to take into account the important interests of the other Party when it 
takes measures to enforce its competition rules (Article VI); 

The  parties  are,  for  instance,  within  the  realm  of  traditional  comity  when  they 
cooperate in a certain case to bring their respective positions and remedies  closer 
to  each  other  in  order to  avoid  creating  a  harmful  effect  to  the  market  of  the 
partner.  Each  party  may  draw the  attention  of  the  partner to  its  concerns  in  a 
certain case. This may open a new trail for the partner's investigation  and lead to 

The  case  is  still  pending  and  can  not,  at  this  stage,  be  included  in  this  report  for  reasons  of 
confidentiality.  Details of EC/US cooperation  on this case will be included  in the first annual report 
following the closure of the case. 

a  final  result  taking  the  other  party's  interests  into  consideration  in  a  more 
appropriate way. 

so-called  "positive  comity"  provisions  by  virtue of which  either party  can  invite 
the  other  Party  to  take,  on  the  basis  of  the  latter's  legislation,  appropriate 
measures  regarding  anti-competitive  behaviour  implemented  on  its  territory  and 
which affects  the important interests of the requesting Party (Article V). 

Activation of the positive comity  provision  was felt  appropriate  for  the  first  time 
in  a  recent  case.  The  US  authorities  requested  the  Commission  to  investigate 
specific  allegations  of  discrimination  regarding  the  operation  of  a  computerised 
reservation  system  (Amadeus)  set  up  by  Lufthansa,  Air  France  and  Iberia.  The 
Commission is currently  investigating the case in close cooperation with the DoJ. 

the  Agreement  makes  clear  that  none  of  its  provisions  may  be  interpreted  in  a 
manner which  is inconsistent with the legislation  in force  in the European  Union 
and the United  States of America (Article IX). 

3. 

RULES REGARDING THE PROTECTION  OF  CONFIDENTIALITY 

Currently  the  most  intensive  case  related6  cooperation  between  the  European 
Commission  and  competition  authorities  in  third  countries  is  carried  out  either  on  the 
(1991  EC/US  Competition  Cooperation 
basis  of  specific  bilateral  agreements 
Agreement7; and in the near future:  Proposed EC/US Positive Comity Agreement8,  Draft 
EC/Canadian  Competition  Cooperation  Agreement),  or  under 
the  1995  OECD 
Recommendation9. 

All these instruments  provide  explicitly10 under the heading  "Confidentiality  and 

Use of Information"  that: 

"...  neither  Party  is  required  to  disclose  information  to  the  other  Party  where  such 
disclosure is prohibited by the laws of the Party possessing the information  or would 
be incompatible with that Party's  important interests." 

The first and (up to now) most comprehensive clarification  regarding the scope of 
the  "Statement  on 

the  protection  of  confidential 

is  contained 

information 

in 

6 

It  is  mainly  the  cooperation  regarding  specific  pending  cases  which  can  give  rise  to  issues  of 
protection of confidential  information. 

7  Agreement between the Government of the United  States of America and the European Communities 
regarding the application of their competition laws (OJ L 95, 27.4.95, pp. 47-50 as corrected by OJ L 
131\38 of 15.6.95). 

8 
9 

10 

COM (97) 233. 

Revised  Recommendation  of  the  Council  concerning  Cooperation  between  Member  Countries  on 
Anticompetitive Practices affecting  International Trade, 27 and 28 July 1995 - C(95)130. 

i) Article VIII of the 1991 EC/US Agreement, ii) Article V of the Proposed EC/US Positive Comity 
Agreement, iii) Section  10 of the Draft  EC/Canadian Agreement, and iv) Section  10 of the Guiding 
Principles annexed to the 1995 OECD Recommendation. 

Confidentiality  of  Information"  made  by  the  Commission  to  the  Council  during  the 
adoption  on  10.04.1995  of  the  Joint  Council  and  Commission  Decision  regarding  the 
entry into force of the  1991 EC/US  Agreement. 

In this Statement the Commission distinguishes between two types of  information 

which may, under different  circumstances, be considered  confidential. 

First, information  acquired by the Commission and the authorities of the Member 
States in the course of an investigation  and which  is of the kind  covered by  professional 
secrecy  is subject  to Article 20 of Council  Regulation  17/62 and to similar provisions  in 
the equivalent implementing Regulations.  Essentially, this refers to information  which  is 
not  in  the  public  domain  and  which  may  be  discovered  during  the  course  of  an 
investigation  or which  may be voluntarily  notified  to the  Commission  under  Regulation 
17/62 or in reply to a request for information.  This information  also includes business or 
trade  secrets.  Such  information  is  not  be  disclosed  to  the  US  antitrust  authorities  save 
with the express agreement of the source concerned. 

Second,  there  is  information  which  relates  to  the  conduct  of  an  investigation  or 
the  possible  conduct  of  an  investigation  and  which  is  not  subject  to  Article  20  of 
Regulation  17/62  or  to  similar  provisions  in  the  equivalent  implementing  Regulations. 
Such information  includes the fact of the investigation taking place, the subject-matter  of 
the investigation (for example, an agreement on prices or sharing out of markets or abuse 
of a dominant  position,  such  as tied  selling or  discriminatory  prices), the identity  of the 
undertaking being investigated  and the steps which  it is proposed to take in the course of 
the investigation.  This information  is kept confidential  to  ensure the proper handling  of 
the  investigation.  However,  it may be  communicated  to  the US  competition  authorities 
as these are obliged to maintain  the confidentiality  of the  information  under the terms of 
Articles  VTII  and  IX  of  the  Agreement  and  by  the  exchange  of  letters  between  the 
parties. 

As  regards  the  notifications  carried  out  between  the  two  Parties  (under  Article 
11(4) of the 1991 Agreement), these notifications  do not include either the draft  statement 
of  objections,  or  any  other  confidential  element.  The  undertakings  concerned  are 
informed  of  the  existence  of  such  notifications,  at  the  latest  when  the  statement  of 
objections  is issued. 

In  general  it  must  be  noted  that,  where  it  is  appropriate  to  provide  confidential 
information  to  the  US  antitrust  authorities  in  order  to  keep  them  informed  of  a 
development  in  a  specific  case,  the  consent  of  the  source  of  that  information  must  be 
obtained by the means of a waiver. Community  law provides a high level of protection to 
confidential  information  provided  to the  Commission,  and  it will  be necessary  that  any 
consent  obtained  is  sufficient  to  discharge  the  Commission  from  its  obligation  of 
confidentiality  as provided by general principles of Community Law, the case law of the 
European Court of Justice and Article 20 of Regulation No.  17. 

The  envisaged  EC/US  Positive  Comity  Agreement,  makes 

that 
information  provided  under these instruments  may only be used for their  implementation 
unless  the competition  authority  that  provided  the  information  has  consented  to  another 
use. A further  safeguard  is provided  to those who have  consented  to certain  confidential 

it  clear 

information  being  disclosed,  in  that  such  information  may  not  be  used  for  any  other 
purpose unless the competition authority and the source of the information consent. 

4. 

RULES REGARDING  TRANSPARENCY 

Member States are kept informed  of cooperation  activities under the  1991 EC/US 
Agreement  in  accordance  to the  "Statement  on Transparency"  made by the  Commission 
to the Council  during the adoption  on  10.04.1995 of the  Joint  Council  and  Commission 
Decision regarding the entry into force of the  1991 EC/US Agreement. 

Pursuant  to  this  Statement  the  Commission  forwards  to  the  Member  State  or 
Member  States  whose  interests  are  affected  the  notification  sent  by  the  Commission  or 
received  from  the  US  competition  authorities  under  the  1991  EC/US  Agreement. 
Member  States  are  notified  as  soon  as  is  reasonably  possible  in  the  language  of  the 
exchange.  Where  the  Commission  sends  information  to  the  US  authorities,  Member 
States are notified  at the same time. 

The  Commission  also  notifies  the  Member  State  or  Member  States  whose 
interests  are  affected  of  any  cooperation  or  coordination  of  enforcement  activities,  as 
soon as is reasonably  possible. 

It  is  considered  that  the  interests  of  a  Member  State  are  affected  where  the 

enforcement  activities in question. 

° 

° 

° 

° 

° 

are relevant to the enforcement  activities of the Member State; 

involve anticompetitive  activities  (other than a merger or acquisition)  carried  out 
in the Member State's territory; 

involve  a  merger  or  acquisition  in  which  one  or  more  of  the  parties  to  the 
transaction,  or  a company  controlling one or more parties to the transaction,  is  a 
company  incorporated or organized under the laws of the Member State; 

involve  conduct  believed  to have been  required,  encouraged  or  approved  by  the 
Member State; 

involve remedies  that  would,  in significant  respects,  require, or prohibit  conduct 
in the Member  State's territory. 

In  addition,  at  least  twice  a  year  at  meetings  of  government  competition 
specialists, the Commission  will  inform  all the Member  States about the  implementation 
of  the  Agreement,  and  particularly  about  the  contacts  which  have  taken  place  with  the 
US  authorities  as  regards  the  forwarding  to the  Member  States  of  information  received 
by the Commission under the Agreement. 

5. 

CASE SPECIFIC COOPERATION WITHIN  1997 

The cases listed below are those which fall  directly under the EC/US  Agreement. 
Some cases in the aviation sector for example, are dealt with by another Agency, the US 
Department of Transportation  (the DoT). The DoT does not formally  cooperate with the 
Commission directly, but does do so indirectly, through the DoJ. There are therefore 

informal  contacts between the Commission  and the DoT. These cases are not discussed 
in this report. 

5.1 

Statistical  information 

a) 

Number of cases notified by the Commission and by the  US 

There were  the total  of  forty-two  notifications  made  by  the  Commission  during 
the period  between  1 January  1997  and  31  December  1997.  The  cases  are  divided  into 
merger and non-merger cases and are listed in the Annex 1. 

The  Commission  received  the  total  of  thirty-six  notifications  from  the  US 
authorities during the same period.  Twenty-four  were received  from  the US  Department 
of Justice ("the DoT')  and twelve from  the US Federal  Trade Commission  ("the  FTC"). 
A  list  of  these  cases  is  found  in  the  Annex  2,  again  broken  down  in  merger  and  non-
merger cases. 

Merger  cases  made up  the majority  of  all  notifications  in  both  directions.  There 
were  thirty-one  merger  notifications  by  the  Commission  and  twenty  by  the  US 
authorities. 

The  figures  given  represent  the  number  of  cases  in  which  one  (or  more) 
notifications  took  place  and  not  the  total  number  of  individual  notifications.  Under 
Article II of the Agreement, notifications  are made at certain stages of the procedure  and 
so  several  notifications  may  be  made  concerning  the  same  case.  For  instance,  in  the 
Boeing/McDonnell  Douglas  case  the  Commission  sent  seven  notifications  to  the  US 
authorities and received six notifications  from  the FTC on the same case. 

Table  J  sets  out  in  figures  the  number  of  cases  notified  under  the  1991  EC/US 
Agreement during the period of  1  January  1997 to 31 December  1997. Table 2 sets out in 
figures the number of cases notified  since 23 September  1991. 

Table J 

Year 

No. of EC 
notifications 

CASES NOTIFIED 

No. of US 
notifications 

FTC  DoJ 

No. of merger 
notifications 

1997 

42 

12 

24 

30 (EC)  20 (US) 

* ** 

Table 2 

Year 

No. of EC 
notifications 

1991 

1992 

1993 

1994 

1995 

1996 

1997 

5 

26 

44 

29 

42 

48 

42 

CASES NOTIFIED 

No. of US 
notifications 

FTC  DoJ 

No. of merger 
notifications 

10 

2 (=12) 

3 (EC)  +9 (US) 

20 

22 

16 

14 

20 (=40) 

11 (EC)+ 31 (US) 

18 (=40) 

20 (EC) + 20 (US) 

19 (=35) 

18 (EC)+ 20 (US) 

21 (=35) 

31 (EC)+ 18 (US) 

20 

18 (=38) 

35 (EC) + 27 (US) 

12 

24 (=36) 

30 (EC) + 20 (US) 

b) 

Notifications  by the Commission  to Member  States 

The text of the interpretative letter sent by the European Communities  to the US 
(as well as the Statement on Transparency made by the Commission to the Council on 10 
April  1995,  see  point  4  above)  provides  that  the  Commission,  after  notice  to  the  US 
Competition  authorities,  will  inform  the  Member  State  or  Member  States,  whose 
interests are affected,  of the notifications  sent to  it by the US  antitrust authorities. Thus, 
when notifications  are received from the US Authorities, they are forwarded immediately 
to the relevant units of DGIV and at the same time copies are sent to the Member States, 
if  any,  whose  interests  are  affected.  Equally,  at  the  same  time  that  DG  IV  makes 
notifications to the US authorities, copies are sent to the Member State(s) whose interests 
are affected. 

In  most  instances,  the  US  authorities  also  notify  the  Member  States  directly, 
under  the  OECD  Recommendation11.  During  the  period  under  review  24  cases  were 
notified to the United Kingdom, 21 to Germany,  10 to France, 9 to the Netherlands, 2 to 
Denmark, 2 to Finland, 2 to Italy and 1  to Portugal and Spain each. 

11  Revised recommendation of the OECD Council concerning cooperation between Member countries on 

anti-competitive practices affecting international trade, adopted 27/28 July 1995 

5.2 

Substantive aspects of case-specific cooperation12 

During the year  1997 cooperation  between  the Commission's  officials  and their 
counterparts in the United States continued to be productive. The 1991 Agreement offers 
a  framework  for  a  meaningful  and  useful  cooperation  regarding  competition  cases of 
mutual  interest  to  the  two  sides.  This  type  of  cooperation  and  coordination  of 
enforcement  activities has been beneficial to both competition authorities and companies 
involved. 

a) 

The Boeing/MDD merger13 

EC/US cooperation in the Boeing/MDD merger was particularly intensive. 

The US Department of Defense  and Department of Justice, on behalf of the US 
Government,  informed  the  European  Commission  of  concerns  that  (i)  a  decision 
prohibiting the proposed merger could harm important US defence  interests, (ii) despite 
any measures the Commission could  impose on a third  party purchaser, a divestiture of 
Douglas  Aircraft  Company  (DAC,  the  civil  aircraft  branch  of  McDonnell  Douglas) 
would be likely to be unsuccessful  in preserving DAC as a stand alone manufacturer of 
new aircraft,  resulting  in an inefficient  disposition  of  whatever  of DAC s new  aircraft 
manufacturing operations that potentially could be salvaged by Boeing, and in the loss of 
employment  in the United  States, and (iii) any divestiture of DAC to a third  party that 
would not operate DAC as a manufacturer  of new aircraft  would  be anticompetitive in 
that  it would  create  a firm with  the  incentive  and  means  to  raise  price  and  diminish 
service in respect of the provision of spare parts and service to DAC's fleet-in-service, a 
large portion of which is owned by US airlines. 

The  Commission  took  the  above  concerns  into  consideration  to  the  extent 
consistent  with  Community  law.  In  particular,  as  far  as  US  defence  interests  were 
concerned,  the Commission  has  limited  the  scope of  its  action  to the  civil  side of the 
operation.  The  Commission  has  not  pursued  further  the  concerns  it  expressed  in  its 
Statement of Objections  concerning the effect  of the concentration  on the international 
market  for  fighter  aircraft.  As  far  as  DAC  is  concerned,  the  Commission  has  not 
considered  a divestiture as a remedy to resolve the competition problems created by the 
concentration. 

Although this case had its own difficulties,  the authorisation under the conditions 
put  forward  by  the  Commission  at  the  end  of  its  investigation  ensured  that  effective 
competition was maintained on the market for large commercial  aircraft. 

12  This  report  concentrates  on  aspects  of  case  handling  related  to  the  EC/US  cooperation.  For  more 

information on a particular case see the XXVIIth Report on Competition Policy. 

13  For  more  details  on  this  case  see  among  other  sources:  A.Schaub,  "International  cooperation  in 
antitrust matters: making the point in the wake of the Boeing/MDD proceedings", Competition Policy 
Newsletter, nr. 1/1998 (February), pp. 2-6. 

10 

b) 

Cooperation  in other major cases 

i) Aspects related to the product market 

Discussions between the case handlers frequently  focus  on the product market to 
determine whether both sides have arrived at similar conclusions.  These  discussions are 
based  on  general  information  which  is  publicly  available.  Undoubtedly  these  kind  of 
exchanges have disclosed a high degree of similarity between the market analyses of the 
Commission and the US authorities. 

This  is  very  important,  given  the  need  to  have  meaningful  exchanges  while 
observing  the  rules  on  confidentiality.  If the  Commission  and the  US  authorities  took 
different  initial  views  on market definition,  it might not be possible to  explore  fully  the 
reasons  for the  different  approaches  without  discussing  confidential  information  which 
the  parties  had  provided.  Under  our  present  rules  this  could  only  be  done  with  the 
agreement of the parties. 

There were  frequent contacts between EC officials  and the Department of Justice 
in  the  course  of  the  investigation  of  the  then  proposed  BT/MCI  merger.  Meetings 
between  the  two  sides  were  held  in  both  Washington  and  Brussels.  Because  the  case 
required assessment of product markets related to the offering  of transatlantic telephony 
services,  and  in  particular  consideration  of  the  impact  of  the  merger  against  the 
background  of  international  accounting  rate arrangements, the  discussions  between  the 
two  sides  were  helpful  not  only  in  terms  of  refining  market  definitions,  but  also  in 
pooling knowledge about the regulatory background on each side of the Atlantic. 

Also  in  the  Guinness/Grand  Metropolitan  case  there  was  a  good  deal  of 
discussion between Commission officials  and their opposite numbers in the United States 
regarding the different relevant product markets which led to compatible remedies. 

In the  Santa Cruz/Microsoft case  there  were  no 
differences  of opinion on market definition.  Also in the Boeing/McDonnell Douglas  case 
both the FTC and the Commission reached the same product market definition  of  "large 
commercial  aircrafts".  After  exchanging  views  on how to define  markets  for  PET film 
and Titanium Dioxide in the DuPont/ICI case, certain potential  differences  were noticed 
both on demand side and on supply side substitutability in the US and in the EC. 

Although  the  EC  and  US  authorities  used  sometimes  different  product  market 
definitions  for  their  respective  assessments,  the  contacts  between  them  served  the 
purpose  of  allowing  each  to  understand  the  thinking  of  the  other,  and  to  refine  their 
analyses  accordingly.  Close  cooperation  allowed  the  two  sides  to  avoid  conflicting 
decisions. 

ii) Aspects related to the geographical market 

Discussion  of  the  geographical  market tends  to be  more  limited,  as  usually  the 
Commission  and the US  authorities  are concentrating  on the competitive  effects  of the 
behaviour  or transaction  on their own  markets,  even  in  cases  where  the  activity  under 
investigation is organized on a transatlantic or worldwide scale. 

11 

However,  in  the  Boeing/MDD  and  the  GE  Aircraft  Engines/Pratt  &  Whitney 
cases  the  same  geographical  market  definition  of  global  market  was  retained  by  both 
sides. In the case of DuPont/ICI there was an exchange of views on whether the US and 
EC markets for both products, PET and Titanium Dioxide, should be regarded as distinct 
or comprised within a world-wide dimension. 

iii) Aspects related to the anti-competitive  effects 

In  the  Santa  Cruz/Microsoft  case  general  discussion  established  that  the 
Commission  and  its  US  counterpart  at the  staff  level  had  largely  similar views  of  the 
facts.-The  Guinness/Grand Metropolitan  case  was  a  good  example  of  complementary 
analyses  of  anticompetitive  effects.  In that  case  agreement  on  market  definition  led  to 
agreement on competitive effects  and ultimately to a common remedy. 

Commission/FTC  consultations  led each side to take greater account of concerns 
raised  by the other concerning  the potential  anticompetitive  effects  of  the merger.  The 
FTC  took  a  more  critical  view  of  Boeing's  exclusive  agreements  as  its  investigation 
progressed. 

iv) Ascertaining law and fact in the other jurisdiction 

Jurisdiction to deal with a specific  case was not challenged from either the US or 
the  Commission's  side.  Exchanges  of  information  and  discussions  took  place  in  cases 
where jurisdiction for one authority or the other was not beyond doubt. 

Close  cooperation  in  the  Santa  Cruz/Microsoft case  made  evident  that  the  US 
"rule of  reason" approach  to  restrictions  in  contracts  would  make  it  more  difficult  to 
attack the behaviour at issue in the US  courts than under EC legal standards. Conversely 
as regards remedies, an Undertaking given to the Commission is not directly enforceable, 
in the way that the US consent decree is. 

v) Avoiding conflicting remedies 

In  the  Guinness/Grand  Metropolitan  case  the  parties  were  prepared,  once 
negotiations had reached a certain point, to  allow  discussions to take place between the 
antitrust authorities on the proposed remedies. This was valuable in ensuring an element 
of  coordination  which  might  not otherwise  have  been  possible.  In particular it ensured 
that the remedies  finally  agreed  upon  in  each of  the jurisdictions  were  consistent  with 
one another. 

Although the FTC was not concerned about remedies in the Boeing/MDD case, as 
they  would  eventually  clear  the  merger,  the  Commission,  which  was  looking  very 
closely  at  some  form  of  divestiture  of  DAC,  informed  the  FTC  of  such  a possibility. 
However,  as the FTC expressed  reservations  on the feasibility  of  such  a remedy,  , and 
given that the Commission's  enquiry showed that there was no potential buyer for DAC, 
the  Commission  informed  the  FTC  that  it  would  take  into  account  its  concerns  and 
would therefore abandon the idea of DAC's divestiture. 

12 

vi) Traditional comity 

The Commission  notified  to the US  authorities  on  26  June  1997  its preliminary 
conclusions and concerns in the Boeing/MDD case and asked the FTC to take account of 
the European Union's  important  interests  in safeguarding  competition  in the market for 
large civil aircraft. The FTC responded the same day indicating that the FTC would take 
into  account  the  expressed  interests  of  the  European  Communities  when  reaching  its 
decision. On 1  July  1997, the Federal Trade Commission reached a majority decision not 
to oppose the merger. 

vii) Participation of US antitrust authorities in the Commission's hearings 

Following requests put forward by the Federal Trade Commission, officials  from 
the US authority were authorised by the Hearing Officer  to take part as observers in the 
public  hearings  held  pursuant  to  the  EC  Merger  Regulation  in  the  framework  of  the 
examination of the Guinness/Grand Metropolitan  merger. Further the Us Department of 
Justice  requested  and  was  granted  attendance  (as  observer)  at  the  hearing  in  the 
Boeing/MDD merger. 

6. 

CONCLUSIONS 

The  services  of  the  two  antitrust  authorities  on  both  sides  perceive  frequent 
contacts and discussions as particularly useful. They help clarify the understanding of the 
issues  involved.  It was  considered  efficient  and useful  to  have  an  idea of  how  the  US 
enforcement  agencies  intended  to  respond  to  certain  events  in  a  competition  case. 
Despite  the  limited  amount  of  information  that  we  are able  to  exchange,  except  when 
waivers are obtained, the Commission and the two US  antitrust authorities benefit  from 
being  able  to  behave  in  a  consistent  manner,  to  avoid  conflicting  decisions  and 
incoherent remedies, and to obtain quicker decisions. 

13 

ANNEX 1 

NOTIFICATIONS BY THE EUROPEAN COMMISSION TO THE US 
AUTHORITIES  01.01.1997-31.12.1997 

Merger cases14: 

01 
02 
03 
04 
05 
06 
07 
08 
09 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 

Case IV/M.882 - Archer-Daniels-Midland / Grace Cocoa Associates 
Case IV/M.890 - BlokkerAToys "R" Us 
Case IV/M.867 - Wagons-Lits/Carlson 
Case IV/M.846 - Philips/Hewlett-Packard 
Case IV/M.877 - Boeing/McDonnell Douglas 
Case IV/M.856 - BT/MCI (H) 
Case IV/M.905 - Schweizer Ruck/S.A.F.R. 
Case IV/M.833 - The Coca-Cola company/Carlsberg A/S 
Case IV/M.902 - Warner Bros./Lusomundo/Sogecable 
Case IV/M.920 - Samsung/AST 
Case IV/M.915 - Tyco/ADT 
Case IV/M.906 - Mannesmann /Vallourec 
Case IV/M.917 - Valinox/Timet 
Case IV/M.938 - Guinness/Grand Metropolitan 
Case IV/M.933 - ICI/Unilever 
Case IV/M.936 - SIEBE PLC/APV PLC 
Case IV/M.885 - MERCK/RHÔNE-POULENC/MERIAL 
Case IV/M.951 - CABLE AND WHŒLESS/MAERSK DATA-NAUTEC 
CaseIV/M937-LEAR/KEIPER 
Case IV/M.932 - SEHB/VIAG/PE-BEWAG 
Case IV/M.942 - VEBA/DEGUSSA 
Case IV/M.941 - ADM/ACATOS & HUTCHESON/SOYA MAINZ 
Case IV/M.963 - COMPAQ/TANDEM 
Case IV/M.723 - ALCOA/ELKEM 
Case IV/M.966 - Philips/Lucent Technologies 
Case IV/M.954 - BAIN/HOECHST - DADE BEHRING 
Case IV/M.977 - Fujitsu/Amdahl 
Case IV/M.984 - DUPONT/ICI 
Case IV/M.950 - Hoffmann-La  Roche/Boehringer Mannheim 
Case IV/M. 1016 - Price Waterhouse/Coopers & Lybrand 

14  Due to the confidentiality requirements, this list includes only those investigations or cases which have 

been made public 

14 

ANNEX  1 (continued) 

NOTIFICATIONS BY THE EUROPEAN COMMISSION TO THE US 

AUTHORITIES 

01.01.1997-31.12.1997 

Non-merger cases15: 

01 
02 
03 
04 
05 
06 
07 
08 
09 

Case IV/36.365 - NEC/PB/CMB 
Case IV/36.213/F - GEAE / P&W 
Case IV/E-3/36.204 - GENUSA 
Case IV/36.420 - Microsoft Explorer Licensing 
Case IV/36.365 - NEC/PB/CMB 
Case IV/36.382 - Santa Cruz  Operation/Microsoft 
CaseIV/36.474-IBM/STET 
Case IV/35.969 - Canal+ - GDI - TINTA 
Case IV/36610/ - Sanofi Pharma Bristol - Myers 

15  Due to the confidentiality requirements, this list includes only those investigations or cases which have 

been made public 

15 

ANNEX2 

NOTIFICATIONS BY US AUTHORITIES TO THE EUROPEAN COMMISSION 
01.01.1997-31.12.1997 

Merger cases16 

The Boeing Comp./McDonnell Douglas Corp. 

01 
02  Metal Levé S. AYMahle GmbH 
03 
04 
05 
06 

Cargill Inc/Akzo Nobel N. V. 
Guinness/Grand Metropolitan 
British Telecommunications/MCI Communications Corp. 
Corange Ltd./Dr.H.C. Paul Sacher 

16  Due to the confidentiality requirements, (his list includes only those investigations or cases which have 

been made public 

16 

ANNEX 2 (continued) 

Non-merger cases17 

01 
02 
03 
04 
05 
06 
07 

Hoffinann-La Roche, Jungbunzlauer International AG 
Sodium gluconate investigation 
International Association of Conference Interpreters 
SKW Metals & Alloys 
AIG Trading Corp./BP Exploration & Oil Inc/Cargill International SA 
HeereMac Offshore Construction Group Inc/HeereMac 
Graphite electrodes investigation 

17  Due to the confidentiality requirements, this list includes only those investigations or cases which have 

been made public 

17 

ISSN 0254-1475 

COM(98) 510  final 

DOCUMENTS 

EN 

08  11  10  17 

Catalogue  number  :  CB-CO-98-517-EN-C 

ISBN  92-78-38881-5 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg 

î