Scoring a common goal: co-operation between agencies | White & Case LLP International Law Firm, Global Law Practice

Scoring a common goal: co-operation between agencies

03: Global investigations: reading the signals

Antitrust agencies are waking up to the idea that fighting bribery is essential to the maintenance of competitive markets.

by David Vascott
Editor, Global Investigations Review

 

It might seem obvious that corruption hurts competition. Yet historically, anticorruption and antitrust agencies in most countries rarely work together. That may be about to change.

Discussions at the Organisation for Economic Co-operation and Development (OECD) 2014 Forum on Competition suggest that antitrust agencies increasingly recognize that they need to play their part in eradicating corruption. Several speakers called for greater cooperation with their anticorruption counterparts — emphasizing, for example, that it is impossible to maintain competitive markets unless bribery laws are enforced.

Obiageli Ezekwesili, co-founder of Transparency International, an anticorruption organization, summed up the emerging consensus: "Everything that corruption likes, competition dislikes," she said. "Corruption wants to do things in a clandestine environment, but…the more transparency, the greater the competition. Corruption does not care for value for money, but competition is about value for money. Corruption does not care about the interests of the greater majority, but competition cares about the interests of the greater majority."

The root of the problem is the fact that agencies often do not share information, even when doing so would enable them to achieve common objectives.

The Forum, which is held every year at the OECD's Paris headquarters, convenes national representatives from competition agencies around the world. As such, the event is a bellwether for developments in the field.

The root of the problem is the fact that agencies often do not share information, even when doing so would enable them to achieve common objectives. Most antitrust agencies carry out dawn raids to investigate antitrust violations. Information discovered during their investigations could often be evidence of corruption, but antitrust investigators may not be trained to recognize it as such. In addition, it may be difficult to share findings across agencies for both institutional reasons and other factors such as different standards of evidence gathering.

It is unlikely that we will see mergers between antitrust and anticorruption agencies due to the institutional and legal obstacles that would need to be overcome. However, the recent signing of a memorandum of understanding between the UK's Serious Fraud Office and the Competition Markets Authority detailing mutual cooperation in criminal cartel proceedings may be a sign of things to come.  Greater cooperation — from gathering evidence and sharing information to extending cartel leniency agreements to cover corruption issues — may be both desirable and achievable for authorities.

This could have significant implications for business. If competition enforcers carrying out a dawn raid are also on the lookout for potential corruption issues in the target company, that company's counsel may find they have an entirely new front to defend — one that potentially ramifies far beyond the immediate antitrust issue. With the extraterritorial reach of the US Foreign Corrupt Practices Act, the UK Bribery Act and other far-reaching national bribery laws, an investigation launched on the back of a domestic antitrust issue could quite foreseeably open up a Pandora's box of cross-border, anticorruption probes. 

 

To download the full report please click here.

To read other articles in this report, please click here.

 

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2014 White & Case LLP