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May 18, 2010

Global Concerns Take Center Stage at Antitrust Spring Meeting

Keynote speaker Joel Klein, chancellor of the New York City school system, discussed the importance of antitrust basics in education. ABA President Carolyn Lamm (left) and Section Chair Ilene Knable Gotts also pictured.

Keynote speaker Joel Klein, chancellor of the New York City school system, discussed the importance of antitrust basics in education. ABA President Carolyn Lamm (left) and Section Chair Ilene Knable Gotts also pictured.

Economic turmoil around the world set the tone for the 58th Annual ABA Section of Antitrust Law Spring Meeting in the nation’s capital. With leadership changes at several major competition authorities, including several agencies in the United States as well as the European Commission, conversations about competition law and policy developments in jurisdictions around the globe took center stage.

While travel restrictions imposed by the Icelandic volcano kept an estimated 500 registrants from attending, more than 2,300 lawyers and economists participated in the conference sponsored by the ABA Section of Antitrust Law April 21-23.

“The spring meeting has become the center of major international discourse on competition issues,” noted Section Chair Ilene Knable Gotts , who titled her Chair’s Showcase “Nature vs. Nurture:  The Role of Culture in Competition Policy.”

How are Competition Laws Influenced by Culture?

A discussion of competition laws no longer just involves talking about the United States and the European Union, said Gotts at the start of her showcase. With more than 100 jurisdictions around the world with competition laws in effect, each with its own nuances, which ones have it right?

Gotts first explored the question as a young Federal Trade Commission staffer, right out of law school. She attended a Fordham conference on the European Union’s competition practices, and was troubled by the differences she learned between the United States and European laws. “Was everything I learned wrong?” she asked herself.

Over the next decades, Gotts learned that there is no right or wrong—just differences.

There are many factors that influence the competition laws of a nation, among them social and political history, geography and size.

During her Chair’s Showcase, Gotts identified “nature” and “nurture” to categorize the different influencing factors on a jurisdiction’s laws. She described “nature” as the differences due to the institutional structures and the historical objectives of a given area; and she said that “nurture” includes those differences that evolve over time, reactive to an area’s culture.

From country to country, competition laws may read similarly, but they are often enforced differently, depending on an area’s culture and norms.  As panelist Thomas Barnett, Covington & Burling LLP, explained it, a country can have statutes written down, but culture fills in the holes.

Eleanor M. Fox of New York University School of Law discussed how culture affects competition laws

Eleanor M. Fox of New York University School of Law discussed how culture affects competition laws

Eleanor Fox, New York University School of Law, emphasized that, while a country — especially an established one — can impact another nation, you “don’t impose culture overnight.”  It develops.  Panelists Barbara Rosenberg, Barbosa Mussnich & Aragao Advogados, Sao Paulo, and William E. Kovacic, commissioner, Federal Trade Commission, agreed that it’s hard to change mores just by changing laws.

The differences between jurisdictions demand cultural sensitivity and awareness when practitioners’ work crosses borders. Because of cultural and political nuances between areas, it is wise for lawyers to involve local counsel in a case, or at the very least, lawyers should read local case law very carefully, agreed the panelists.

“Nature vs. Nurture:  The Role of Culture in Competition Policy” was among several sessions with an international focus. Other programming included consumer protection sessions that examined recent advertising cases, privacy and information security. Litigation-related antitrust programming included a mock trial on the examination of economic experts.

Horizontal Merger Guidelines Among Roundtable Hot Topics

Another highlight of the three-day spring meeting was  a “Roundtable Conference of Enforcement Officials,” with chief enforcers from around the world answering questions about competition policy.

Among discussions, panelists heralded the newly released Federal Trade Commission horizontal merger guidelines and the preceding education process that helped to inform them.  Citing the five workshops that were held around the country for corporate lawyers, Jon Leibowitz, chair, U.S. Federal Trade Commission, touted the transparency involved in developing the new rules, “This has been the most open horizontal merger process ever.”

“This is not an expansion of power,” said Christine Varney, assistant attorney general, U.S. Department of Justice, Antitrust Division, about the guidelines. “I fundamentally believe people in Chicago, Miami, Dallas, Kansas, Los Angeles are as entitled [as people in Washington, D.C.]  to know what the agencies really do.”

In addition to domestic concerns, the panelists also focused on international issues. In addition to Leibowitz and Varney, other panelists included Melanie L. Aitken, commissioner of competition, Canadian Competition Bureau; James A. Donahue, III, chair, Multistate Antitrust Task Force, Pennsylvania Office of Attorney General; and Dr. Alexander Italianer, director general, European Commission, Belgium.

The Cloudy Issues of Privacy, Security and Internet Transactions

Besides concerns of specific interest to the antitrust community, the spring meeting also involved sessions of concern to the broader legal community. Among them was “Security and Privacy in the Cloud:  Developing the Right Framework for Service Providers, Business Customers and Consumers,” which focused on securing sensitive data transferred via the Internet.

Experts discussed cloud computing security (l-r): session chair Dana Rosenfeld and moderator Erin Egan with Tim Cranton of Microsoft, Justin Brookman of Center for Democracy and Technology, Jessica Rich of the Federal Trade Commission and Hilary M. Wandall of Merck & Co. Inc.

Experts discussed cloud computing security (l-r): session chair Dana Rosenfeld and moderator Erin Egan with Tim Cranton of Microsoft, Justin Brookman of Center for Democracy and Technology, Jessica Rich of the Federal Trade Commission and Hilary M. Wandall of Merck & Co. Inc.

Cloud computing is increasingly popular. It essentially moves software applications from desktops and hard drives to the Internet, making information more vulnerable to hackers and other security concerns

The panel, featuring experts from the business and government sectors as well as consumer advocates, described the confusion of ever-changing policies and regulations on privacy, both in the United States and abroad.

“It’s an impossible patchwork of conflicting obligations that we honestly cannot comply with,” said Tim Cranton, associate general counsel, Microsoft Corp., who noted the difficulty in complying with both international and domestic regulations. He said that when conflicts arise, Microsoft tries to apply a “global principled approach,” which attempts to address all the applicable laws.

Jessica Rich, deputy director, Bureau of Consumer Protection, Federal Trade Commission  said that while these “cross-border issues have been around for a while, cloud [computing] really puts them on steroids and makes it more urgent.”

Surprisingly, panelists acknowledged that the regulation in the United States has a long way to go. “A lot of places don’t want to send data to the U.S. because of the Patriot Act, because of the unclear Fourth Amendment,” said Justin Brookman, senior resident fellow, Center for Democracy and Technology, explaining the problem. “I’m less concerned about where [U.S. consumer] data is moving around the world because protections in most countries are a lot better than we have here,” he noted.

“Ongoing education and better privacy awareness is key,” said Hilary M. Wandall, global privacy leader, Merck & Co. Inc.  “We just need to find a better way to educate people about what they should be concerned about, what they should be watching for and what they can do to protect themselves.”