WORLD TRADE
ORGANIZATIONWT/WGTCP/W/199
26 July 2002
(02-4156)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM AUSTRALIA
The following is the final text of a paper received from the Permanent Mission of Australia
which was circulated as an advance copy for the Working Group's meeting of 1-2 July 2002.
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Modalities for Voluntary Cooperation
This paper discusses the possible benefits from voluntary cooperation between competition
authorities in the context of increasing globalisation.  The paper illustrates some of these benefits in a
short case study on cooperation between the Au stralian Competition and Consumer Commission
(ACCC), Australia’s competition author ity, and its overseas counterparts.
A. WHY COOPERATE ?
1. With the increasing globalization of business, competition regulators are now faced with
competition and enforcement issues that are truly borderless.  As a result, the ACCC is liaising to a
greater extent with its international counterparts to facilitate and encourage the sharing of experience
and information.
2. This information sharing is most valuable in  relation to evidence gathered by foreign
regulators on international cartels which also operate in the domestic market.
3. Enforcement cooperation among agencies enable authorities to share experiences, potentially
uncovering new matters and more often reducing the time required to investigate and resolve cartel
matters - thereby maximizing the effectiveness of domestic competition regimes.
4. There are a number of compelling reasons why cooperation among competition agencies is
both necessary and desirable:
• With increasing globalization, it is more po ssible than ever for anti-competitive conduct
to transcend national boundaries and have an adverse effect on domestic markets.  Some
prime examples are international cartels, anti-competitive mergers and abuse of dominantposition in an international market.  Some obvi ous examples occur in industries that are
international by nature, such as air and sea transport.  Competition authorities have aprime interest in cooperating to solve these problems to enhance the effective
enforcement of domestic competition rules.
• Effective domestic enforcement of competition rules is also based on having adequate and
correct information to determine whether unlawful conduct took place or whether the
effects of an acquisition were anti-competitive,  for example.  In the global economy, the
necessary information may need to be sought  from sources located in other countries.  InWT/WGTCP/W/199
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these circumstances, it is possible that another enforcement agency may be able to
provide the information required.  This has th e potential to enhance the efficiency of the
evidence-gathering process and reduce the time involved in resolving allegations of cartel
conduct.
• Firms which operate in several countries may be subject to differing national competition
rules.  Procedures, time limits and the criteria for assessing the competitive impact may
vary considerably.  These differences can increase the costs faced by firms and createuncertainties which can distort trade flows and international investment.  This situation isparticularly relevant in re lation to mergers where a proposal may need approval from a
number of countries' competition agencies, w ith each country likely to have different
merger laws and filing procedures.  Convergen ce of laws and proce dures and cooperation
between agencies in this context has the potential to simplify processes, reduce timedelays and therefore lower the costs of  compliance for the companies involved.
• One final argument in support of cooperation is  that in some countries, actions against
anti-competitive practices can be less rigorous than in others.  This may create trade and
investment distortions if car tel operators, for example, c hoose to establish operations in
those countries that do not have  adequate competition regimes.
B. AUSTRALIA ’S COOPERATION ARRANGEMENTS
5. In order to further enhance cooperative relations and seek better solutions to the challenges
raised by transnational anti-competitive conduct, the ACCC has entered into formal cooperation
arrangements with a number of its counterparts and will continue to seek similar arrangements with
other competition authorities in the future.
6. Perhaps Australia’s most significant formal agreement is the Treaty between the Government
of Australia and the Government of the United States of America on Mutual Antitrust EnforcementAssistance.  Under the Treaty, Australia and the United States may exchange evidence for use in
competition law enforcement and assist each other in obtaining confidential and public information
located in the other country.
7. The assistance available under the Treaty includes:
- disclosing, providing, exchanging, or discussing antitrust evidence;
- obtaining antitrust evidence on behalf of the other agency (including taking witness
statements); obtaining records, documents and other evidence; locating or identifying
persons or things; and executing searches and seizures; and
- providing copies of publicly available records to the other agency including
documents or information in the hands of other domestic government departments or
agencies.
8. The ACCC also has a tripartite cooperation arrangement with the New Zealand Commerce
Commission and the Canadian Competition Bureau to  promote cooperation and coordination in the
application of each agency’s competition and consumer laws.  In addition, it has bilateral
arrangements with the Chinese Taipei Fair Trade Commission, the Consumer Affairs Council of
Papua New Guinea and the Fiji Commerce Commissi on, all covering both competition and consumer
protection regulation.WT/WGTCP/W/199
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9. It is important to note that the level of cooperation and information-sharing between
competition authorities is not just a matter of having the necessary legal frameworks in place.  A key
factor in building an effective relationship between agencies is the establishment of strong personal
relationships, which will provide a key grounding of understanding, familiarity and most importantly,
trust.  It is essential that agencies understand the processes and procedures of the agency to whichthey provide information, and that they be confident that information released will be used as advised
and appropriately protected.
10. As noted in paragraph 13 of the Secretariat paper (WT/WGTCP/W/191), "international cartels
are unlikely to respect the neatly defined territories covered by existing bilateral agreements.  Rather,
they tend naturally to act strategically and to seek out the cracks that exist between relevant regional
and bilateral agreements".  It is therefore essential that agencies develop strong links with their
international counterparts. A multilateral framework is likely to be the most effective mechanism for
achieving this.
C. C
OOPERATION AND EXCHANGE OF INFORMATION
11. The ACCC most commonly uses its informal networks in order to exchange information and
provide enforcement assistance to its international counterparts.  Informal cooperation is generally
administratively easier and produces faster results.
12. Informal contact is made via telephone, e-mail, video-conference and in person.  Discussions
largely involve details about investigations, the exchange of non-confidential (but not necessarily
public) information, requests to make initial contact with potential witnesses, the existence and
sourcing of relevant information, and more general information, relating for example to the
effectiveness of other agency’s leniency policies on detecting hard-core cartels. Informal discussionsalso take place at various international events and fora.
13. The ACCC relies on its formal cooperation agreements where it is more appropriate to do so -
for example, in particularly sensitive or high-profile matters, or in the provision of confidential
information.  The ACCC has only made one form al request seeking non-confidential information
about cartel conduct, corporate structures and market dynamics. The information provided in thatmatter was highly useful.
D. E
XCHANGE OF CONFIDENTIAL INFORMATION
14. Generally speaking, cooperation may be hampered by legal constraints in some countries on
the exchange of confidential information.  Howe ver, while the ability to share confidential
information is a goal for most, the difficult task of establishing the necessary frameworks to ensure
that confidential information is protected, makes this a long-term target.
15. As mentioned above, the ACCC is able to exchange confidential information with the US by
virtue of the Antitrust Treaty.
Case Study – Vitamins
16. On 1 March 2001, the Federal Court of Australia imposed record penalties totalling A$26
million against three animal vitamin suppliers: Roche Vitamins Pty Ltd (A$15 million), BASFAustralia Ltd (A$7.5 million), and Aventis Animal Nutrition Pty Ltd (A$3.5 million).  The companies
admitted they had engaged in price fixing and market sharing.
17. The parties approached the ACCC voluntarily after the US and Canadian vitamin proceedings
became public in mid-1999 and fully cooperated with the ACCC during its investigation.WT/WGTCP/W/199
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18. The parties promptly provided the ACCC with a comprehensive report containing critical
information about their overseas and Australian collusive arrangements, including frank and detailed
admissions.
19. Through solicitors, the parties willingly participated in a series of discussions with the ACCC
and reached an agreed penalty that was put to the Court.  The parties also assisted in the preparationof the relevant settlement documents.
20. The investigation progressed without the ACCC or foreign agencies invoking formal
cooperation arrangements.  However, informal contact was made with US, EU, Canada, New Zealand
and Brazilian competition agencies, with varying levels of success.  While in some instances,
limitations on the exchange of confidential information impeded the extent of cooperation possible,
the outcome achieved in this case highlights the importance and utility of informal contacts between
competition agencies.
E. C
ONCLUSION
21. It is increasingly recognized that strong and effective competition regimes are necessary in
order to protect economies from global anti-competitive practices.  Voluntary cooperation
arrangements, both formal and informal, have the potential to greatly assist in enhancing the
effectiveness of competition law regimes and are therefore likely to become more prevalent in future.
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