U.S./Canada Agreement Regarding the Application of Their Competition and Deceptive Marketing Practices Laws
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The Government of the United States of America and the government of Canada
(hereinafter referred to as "Parties");
Having regard to their close economic relations and cooperation within the
framework of the North American Free Trade Agreement ("NAFTA");
Noting that the sound and effective enforcement of their competition laws
is a matter of importance to the efficient operation of markets within the
free trade area and to the economic welfare of the Parties' citizens;
Having regard to their commitment in Chapter 15 of NAFTA to the importance
of cooperation and coordination among their competition authorities to further
effective competition law enforcement in the free trade area;
Recognizing that coordination of enforcement activities may, in appropriate
cases, result in a more effective resolution of the Parties' respective concerns
than would be attained through independent action;
Having regard to the fact that the effective enforcement of their laws relating
to deceptive marketing practices is also a matter of importance to the efficient
operation of markets within the free trade area, and having regard to the potential
benefits of increased cooperation between the Parties in the enforcement of
those laws;
Noting that from time to time differences may arise between the Parties concerning
the application of their competition laws to conduct or transactions that implicate
the important interests of both Parties;
Noting further their commitment to give careful consideration to each other's
important interests in the application of their competition laws; and
Having regard to the long history of cooperation between the parties in matters
relating to competition law, including the bilateral Understandings of 1959,
1969 and 1984, as well as the1986 Recommendation of the Council of the OECD
Concerning cooperation Between Member Countries on Restrictive Business practices
Affecting International Trade;
Have agreed as follows:
Article I
Purpose and Definitions
1. The purpose of this Agreement is to promote cooperation and coordination
between the competition authorities of the parties, to avoid conflicts arising
from the application of the parties' competition laws and to minimize the impact
of differences on their respective important interests, and, in addition, to
establish a framework for cooperation and coordination with respect to enforcement
of deceptive marketing practices laws.
2. For the purposes of this Agreement, the following terms shall have the
following definitions:
(a) "Anticompetitive activity(ies)" means any conduct or transaction that
may be subject to penalties or other relief under the competition laws of a
Party;
(b) "Competition authority(ies)" means
(i) for Canada, the Director of Investigation and research;
(ii) for the United States of America, the United states Department of Justice
and the Federal Trade Commission;
(c) "Competition law(s)" means
(i) for Canada, the Competition Act, R.S.C. 1985, C.C-34, except sections
52 through 60 of that Act;
(ii) for the United States of America, the Sherman Act(15 U.S.C. ' 1-7),
the Clayton Act (15 U.S.C. ' 12-27), the Wilson Tariff Act (15 U.S.C.' 8-11)
and the Federal Trade commission Act (15 U.S.C. ' 41-58), to the extent that
it applies to unfair methods of competition, as well as any amendments thereto,
and such other laws or regulations as the parties may from time to time agree
in writing to be a"competition law" for the purposes of this Agreement; and
(d) "Enforcement activity(ies)" means any investigation or proceeding conducted
by a Party in relation to its competition laws.
3. Any reference in this Agreement to a specific provision in either Party's
competition law shall be interpreted as referring to that provision as amended
from time to time and to any successor provision thereof. Each Party shall
promptly notify the other of any amendments to its competition laws.
Article II
Notification
1. Each Party shall, subject to Article X(1), notify tether Party in the manner
provided by this Article and Article XII with respect to its enforcement activities
that may affect important interests of the other Party.
2. Enforcement activities that may affect the important interests of the other
Party and therefore ordinarily require notification include those that:
(a) are relevant to enforcement activities of the other party;
(b) involve anticompetitive activities, other than mergers or acquisitions,
carried out in whole or in part in the territory of the other Party, except
where the activities occurring in the territory of the other Party are insubstantial;
(c) involve mergers or acquisitions in which
- one or more of the parties to the transaction, or
- a company controlling one or more of the parties to the transaction, is
a company incorporated or organized under the laws of the other Party or of
one of its provinces or states;
(d) involve conduct believed to have been required, encouraged or approved
by the other Party;
(e) involve remedies that expressly require or prohibit conduct in the territory
of the other Party or are otherwise directed at conduct in the territory of
the other Party; or
(f) involve the seeking of information located in the territory of the other
Party, whether by personal visit by officials of a Party to the territory of
the other Party or otherwise.
3. Notification pursuant to this Article shall ordinarily be given as soon
as a Party's competition authorities become aware that notifiable circumstances
are present, and in any event in accordance with paragraphs 4 through 7 of
this article.
4. Where notifiable circumstances are present with respect to mergers or acquisitions,
notification shall be given not later than (a) in the case of the United States
of America, the time its competition authorities seek information or documentary
material concerning the proposed transaction pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (15U.S.C. 18a(e)), the Federal Trade Commission
Act (15 U.S.C. 49,57b-1) or the Antitrust Civil Process Act (15 U.S.C. 1312);
and
(b) in the case of Canada, the time its competition authorities issue a written
request for information under oath or affirmation, or obtain an order under
section 11 of the Competition Act, with respect to the transaction.
5. When the competition authorities of a Party request that a person provide
information, documents or other records located in the territory of the other
Party, or request oral testimony in a proceeding or participation in a personal
interview by a person located in the territory of the other Party, notification
shall be given:
(a) if compliance with a request for written information, documents or other
records is voluntary, at or before the time that the request is made;
(b) if compliance with a request for written information, documents or other
records is compulsory, at least seven (7) days prior to the request, (or, when
seven (7) days' notice cannot be given, as promptly as circumstances permit);
and
(c) in the case of oral testimony or personal interviews, at or before the
time arrangements for the interview or testimony are made.
Notification is not required with respect to telephone contacts with a person
in the territory of the other Party where(i) that person is not the subject
of an investigation, (ii) the contact seeks only an oral response on a voluntary
basis(although the availability and possible voluntary provision of documents
may be discussed) and (iii) the other Party's important interests do not appear
to be otherwise implicated, unless the other Party requests otherwise in relation
to a particular matter.
Notification is not required for each subsequent request for information in
relation to the same matter unless the Party seeking information becomes aware
of new issues bearing on the important interests of the other Party, or the
other Party requests otherwise in relation to a particular matter.
6. The Parties acknowledge that officials of either Party may visit the territory
of the other Party in the course of conducting investigations pursuant to their
respective competition laws. Such visits shall be subject to notification pursuant
to this Article and the consent of the notified Party.
7. Notification shall also be given at least seven (7)days in advance of each
of the following where notifiable circumstances are present:
(a) (i) in the case of the United States of America, the issuance of a complaint,
the filing of a civil action seeking a temporary restraining order or preliminary
injunction or the initiation of criminal proceedings;
(ii) in the case of Canada, the filing of an application with the Competition
Tribunal, an application under Part IV of the Competition Act or the initiation
of criminal proceedings;
(b) the settlement of a matter by way of an undertaking, an application for
a consent order or the filing or issuance of a proposed consent order or decree;
and
(c) the issuance of a business review or advisory opinion that will ultimately
be made public by the competition authorities.
When seven (7) days' notice cannot be given, notice shall be given as promptly
as circumstances permit.
8. Each Party shall also notify the other whenever its competition authorities
intervene or otherwise publicly participate in a regulatory or judicial proceeding
that is not initiated by the competition authorities if the issue addressed
in the intervention or participation may affect the other Party's important
interests. Such notification shall be made at the time of the intervention
or participation or as soon thereafter as possible.
9. Notifications shall be sufficiently detailed to enable the notified Party
to make an initial evaluation of the effect of the enforcement activity on
its own important interests, and shall include the nature of the activities
under investigation and the legal provisions concerned. Where possible, notifications
shall include the names and locations of the persons involved. Notifications
concerning a proposed undertaking, consent order or decree shall either include
or, as soon as practicable be followed by, copies of the proposed undertaking,
order or decree and any competitive impact statement or agreed statement of
facts relating to the matter.
Article III
Enforcement Cooperation
1. (a) The Parties acknowledge that it is in their common interest to cooperate
in the detection of anticompetitive activities and the enforcement of their
competition laws to the extent compatible with their respective laws and important
interests, and within their reasonably available resources.
(b) The Parties further acknowledge that it is in their common interest to
share information which will facilitate the effective application of their
competition laws and promote better understanding of each other's enforcement
policies and activities.
2. The Parties will consider adopting such further arrangements as may be
feasible and desirable to enhance cooperation in the enforcement of their competition
laws.
3. Each Party's competition authorities will, to the extent compatible with
that Party's laws, enforcement policies and other important interests,
(a) assist the other Party's competition authorities, upon request, in locating
and securing evidence and witnesses, and in securing voluntary compliance with
requests for information, in the requested Party's territory;
(b) inform the other Party's competition authorities with respect to enforcement
activities involving conduct that may also have an adverse effect on competition
within the territory of tether Party;
(c) provide to the other Party's competition authorities, upon request, such
information within its possession as the requesting Party's competition authorities
may specify that is relevant to the requesting Party's enforcement activities;
and
(d) provide the other Party's competition authorities with any significant
information that comes to their attention about anticompetitive activities
that may be relevant to, or may warrant, enforcement activity by the other
Party's competition authorities.
4. Nothing in this Agreement shall prevent the Parties from seeking or providing
assistance to one another pursuant to other Agreements, treaties, arrangements
or practices between them.
Article IV
Coordination With Regard To Related Matters
1. Where both Parties' competition authorities are pursuing enforcement activities
with regard to related matters, they will consider coordination of their enforcement
activities. In such matters, the Parties may invoke such mutual assistance
arrangements as may be in force from time to time.
2. In considering whether particular enforcement activities should be coordinated,
either in whole or in part, the Parties' competition authorities shall take
into account the following factors, among others:
(a) the effect of such coordination on the ability of both Parties to achieve
their respective enforcement objectives;
(b) the relative abilities of the Parties' competition authorities to obtain
information necessary to conduct the enforcement activities;
(c) the extent to which either Party's competition authorities can secure
effective relief against the anticompetitive activities involved;
(d) the possible reduction of cost to the Parties and to the persons subject
to enforcement activities; and
(e) the potential advantages of coordinated remedies to the parties and to
the persons subject to the enforcement activities.
3. In any coordination arrangement, each Party's competition authorities shall
seek to conduct their enforcement activities consistently with the enforcement
objectives of theother Party's competition authorities.
4. In the case of concurrent or coordinated enforcement activities, the competition
authorities of each Party shall consider, upon request by the competition authorities
of tether Party and where consistent with the requested Party's enforcement
interests, ascertaining whether persons that have provided confidential information
in connection with those enforcement activities will consent to the sharing
of such information between the Parties' competition authorities.
5. Either Party's competition authorities may at any time notify the other
Party's competition authorities that they intend to limit or terminate coordinated
enforcement and pursue their enforcement activities independently and subject
to the other provisions of this Agreement
Article V
Cooperation Regarding Anticompetitive Activities In The Territory Of One
Party That Adversely Affect The Interests Of The Other Party
1. The Parties note that anticompetitive activities may occur within the territory
of one Party that, in addition to violating that Party's competition laws,
adversely affect important interests of the other Party. The Parties agree
that it is in their common interest to seek relief against anticompetitive
activities of this nature.
2. If a Party believes that anticompetitive activities carried out in the
territory of the other Party adversely affect its important interests, the
first Party may request that tether Party's competition authorities initiate
appropriate enforcement activities. The request shall be as specific as possible
about the nature of the anticompetitive activities and their effects on the
interests of the Party, and shall include an offer of such further information
and other cooperation as the requesting Party's competition authorities are
able to provide.
3. The requested Party's competition authorities shall carefully consider
whether to initiate enforcement activities, or to expand ongoing enforcement
activities, with respect to the anticompetitive activities identified in the
request. The requested Party's competition authorities shall promptly inform
the requesting Party of its decision. If enforcement activities are initiated,
the requested Party's competition authorities shall advise the requesting Party
of their outcome and, to the extent possible, of significant interim developments.
4. Nothing in this Article limits the discretion of The requested Party's
competition authorities under its competition laws and enforcement policies
as to whether to undertake enforcement activities with respect to the anticompetitive
activities identified in a request, or precludes the requesting Party's competition
authorities from undertaking enforcement activities with respect to such anticompetitive
activities.
Article VI
Avoidance of Conflicts
1. Within the framework of its own laws and to the extent compatible with
its important interests, each Party shall, having regard to the purpose of
this Agreement as set out in Article I, give careful consideration to the other
Party's important interests throughout all phases of its enforcement activities,
including decisions regarding the initiation of an investigation or proceeding,
the scope of an investigation or proceeding and the nature of the remedies
or penalties sought in each case.
2. When a Party informs the other that a specific enforcement activity may
affect the first Party's important interests, the second Party shall provide
timely notice of developments of significance to those interests.
3. While an important interest of a Party may exist in the absence of official
involvement by the Party with the activity in question, it is recognized that
such interest would normally be reflected in antecedent laws, decisions or
statements of policy by its competent authorities.
4. A Party's important interests may be affected at any stage of enforcement
activity by the other Party. The Parties recognize the desirability of minimizing
any adverse effects of their enforcement activities on each other's important
interests, particularly in the choice of remedies. Typically, the potential
for adverse impact on one Party's important interests arising from enforcement
activity by the other Party is less at the investigative stage and greater
at the stage at which conduct is prohibited or penalized, or at which other
forms of remedial orders are imposed.
5. Where it appears that one Party's enforcement activities may adversely
affect the important interests of the other Party, each Party shall, in assessing
what measures it will take, consider all appropriate factors, which may include
but are not limited to:
(i) the relative significance to the anticompetitive activities involved of
conduct occurring within one Party's territory as compared to conduct occurring
within that of theother;
(ii) the relative significance and foreseeability of the effects of the anticompetitive
activities on one Party's important interests as compared to the effects on
the otherParty's important interests;
(iii) the presence or absence of a purpose on the part of those engaged in
the anticompetitive activities to affect consumers, suppliers or competitors
within the enforcing Party's territory;
(iv) the degree of conflict or consistency between the first Party's enforcement
activities (including remedies) and tether Party's laws or other important
interests;
(v) whether private persons, either natural or legal, will be placed under
conflicting requirements by both Parties;
(vi) the existence or absence of reasonable expectations that would be furthered
or defeated by the enforcement activities;
(vii) the location of relevant assets;
(viii) the degree to which a remedy, in order to be effective, must be carried
out within the other Party's territory; and
(ix) the extent to which enforcement activities of tether Party with respect
to the same persons, including judgments or undertakings resulting from such
activities, would be affected.
Article VII
Cooperation and Coordination With Respect To Enforcement of Deceptive Marketing
Practices Laws
1. For the purposes of this Agreement, "deceptive marketing practices law(s)"means:
(a) for Canada, sections 52 through 60 of the competition Act;
(b) for the United States of America, the Federal Trade commission Act (15
U.S.C. ' 41-58), to the extent that it applies to unfair or deceptive acts
or practices; as well as any amendments thereto, and such other laws or regulations
as the Parties may from time to time agree in writing to be a "deceptive marketing
practices law" for purposes of this Agreement. Each Party shall promptly notify
the other of any amendments to its deceptive marketing practices laws.
2. The Parties note that conduct occurring in the territory of one Party may
contribute to violations of the deceptive marketing practices laws of the other
Party and that it is in their common interest for the Director of Investigation
and research and the Federal Trade Commission to cooperate in the enforcement
of those laws. The Parties further note that the Director of Investigation
and Research and the Federal TradeCommission have in the past cooperated with
each other and coordinated their activities with respect to deceptive marketing
practices matters on an informal basis. The Parties wish to establish a more
formal framework for continuing and broadening such cooperation and coordination.
3. The Director of Investigation and Research and the Federal Trade Commission
shall, to the extent compatible with their laws, enforcement policies and other
important interests:
(a) use their best efforts to cooperate in the detection of deceptive marketing
practices;
(b) inform each other as soon as practicable of investigations and proceedings
involving deceptive marketing practices occurring or originating in the territory
of the other party, or that affect consumers or markets in the territory of
the other Party;
(c) share information relating to the enforcement of their deceptive marketing
practices laws; and
(d) in appropriate cases, coordinate their enforcement against deceptive marketing
practices with a transborder dimension.
4. In furtherance of these objectives, the Director of investigation and Research
and the Federal Trade Commission shall jointly study further measures to enhance
the scope and effectiveness of information sharing, cooperation and coordination
in the enforcement of deceptive marketing practices laws.
5. Nothing in this Article shall prevent the Parties from seeking or providing
assistance to one another with respect to the enforcement of their deceptive
marketing practices laws pursuant to other agreements, treaties, arrangements
or practices between them.
6. Articles II, III, IV, V and VI shall not apply to deceptive marketing practices.
Article VIII
Consultations
1. Either Party may request consultations regarding any matter relating to
this Agreement. The request for consultations shall indicate the reasons for
the request and whether any procedural time limits or other constraints require
that consultations be expedited. Each Party shall consult promptly when so
requested with the view to reaching a conclusion that is consistent with the
principles set forth in this Agreement.
2. Consultations under this Article shall take place at the appropriate level
as determined by each Party.
3. During consultations under this Article, each Party shall provide to the
other as much information as it is able in order to facilitate the broadest
possible discussion regarding the relevant aspects of the matter that is the
subject of consultations. Each Party shall carefully consider the representations
of the other Party in light of the principles set out in this Agreement and
shall be prepared to explain the specific results of its application of those
principles to the matter that is the subject of consultations.
Article IX
Semi-Annual Meetings
Officials of the Parties' competition authorities shall meet at least twice
a year to:
(a) exchange information on their current enforcement efforts and priorities
in relation to their competition and deceptive marketing practices laws;
(b) exchange information on economic sectors of common interest;
(c) discuss policy changes that they are considering; and
(d) discuss other matters of mutual interest relating to the application of
their competition and deceptive marketing practices laws and the operation
of this Agreement.
Article X
Confidentiality of Information
1. Notwithstanding any other provision of this Agreement, neither Party is
required to communicate information to the other Party if such communication
is prohibited by the laws of the Party possessing the information or would
be incompatible with that Party's important interests.
2. Unless otherwise agreed by the Parties, each Party shall, to the fullest
extent possible, maintain the confidentiality of any information communicated
to it in confidence by the other Party under this Agreement. Each Party shall
oppose, to the fullest extent possible consistent with that Party's laws, any
application by a third party for disclosure of such confidential information.
3. The degree to which either Party communicates information to the other
pursuant to this Agreement may be subject to and dependent upon the acceptability
of the assurances given by the other Party with respect to confidentiality
and with respect to the purposes for which the information will be used.
4. (a) Notifications and consultations pursuant to Articles II and VIII of
this Agreement and other communications between the Parties in relation thereto
shall be deemed to be confidential.
(b) Party may not, without the consent of tether Party, communicate to its
state or provincial authorities information received from the other Party pursuant
to notifications or consultations under this Agreement. The Party providing
the information shall consider requests for consent sympathetically, taking
into account the other Party's reasons for seeking disclosure, the risk, if
any, that disclosure would pose for its enforcement activities, and any other
relevant considerations.
(c) The notified Party may, after the notifying Party's competition authorities
have advised a person who is the subject of a notification of the enforcement
activities referred to in the notification, communicate the fact of the notification
to, and consult with that person concerning the subject of the notification.
The notifying Party shall, upon request, promptly inform the notified Party
of the time at which the person has, or will be, advised of the enforcement
activities in question.
5. Subject to paragraph 2, information communicated in confidence by a Party's
competition authorities to the competition authorities of the other Party in
the context of enforcement cooperation or coordination pursuant to Articles
III, IV or V of this Agreement shall not be communicated to third parties or
to other agencies of the receiving competition authorities' government, without
the consent of the competition authorities that provided the information. A
Party's competition authorities may, however, communicate such information
to the Party's law enforcement officials for the purpose of competition law
enforcement.
6. Information communicated in confidence by a Party's competition authorities
to the competition authorities of theother Party in the context of enforcement
cooperation or coordination pursuant to Articles III, IV or V of this Agreement
shall not be used for purposes other than competition law enforcement, without
the consent of the competition authorities that provided the information.
7. Subject to paragraph 2, information communicated in confidence between
the Director of Investigation and Research and the Federal Trade Commission
in the context of enforcement cooperation or coordination pursuant to Article
VII of this Agreement shall not be communicated to third parties or to other
agencies of the receiving agency's government, without the consent of the agency
that provided the information. The receiving agency of a Party may, however,
communicate such information to the Party's law enforcement officials for the
purpose of enforcement of deceptive marketing practices laws.
8. Information communicated in confidence between the Director of Investigation
and Research and the Federal TradeCommission in the context of enforcement
cooperation orcoordination pursuant to Article VII of this Agreement shall
not be used for purposes other than enforcement of deceptive marketing practices
laws, without the consent of the agency that provided the information.
Article XI
Existing Laws
Nothing in this Agreement shall require a Party to take any action, or to
refrain from acting, in a manner that is inconsistent with its existing laws,
or require any change in the laws of the Parties or of their respective provinces
or states.
Article XII
Communications Under This Agreement
Communications under this Agreement may be carried out by direct communication
between the competition authorities of the Parties. Notifications under Article
II and requests under Articles V(2) and VIII(1) shall, however, be confirmed
promptly in writing through customary diplomatic channels and shall refer to
the initial communication between the competition authorities and repeat the
information supplied therein.
Article XIII
Entry Into Force and Termination
1. This Agreement shall enter into force upon signature.
2. This Agreement shall remain in force until 60 days after the date on which
either Party notifies the other Party in writing that it wishes to terminate
the Agreement.
In Witness Whereof, the undersigned, being duly authorized by their respective
Governments, have signed this Agreement.
Done at Washington, in duplicate, this day of August, 1995, and at Ottawa,
this day of August, 1995, in the English and French languages, each text being
equally authentic.
For The Government of The United States of America:
Janet Reno
Robert Pitofsky
For The Government of Canada:
John Manley