Last week our Beijing Competition and Antitrust lawyer, Vivian Cao, from Linklaters’ China joint operation partner, Zhao Sheng, spoke on a panel at the GCR Live Women in Antitrust conference, held in Washington, D.C.

Vivian’s panel focused on the question: when does conversation become collusion? This can be particularly difficult to pin-point, especially in the course of business arrangements such as vertical relationships, joint ventures, and prospective or pending mergers.

Competition authorities in the EU, US, Canada and China do not have set criteria for determining whether an information exchange is exempt from antitrust liability. Rather, they consider a variety of factors, such as the nature of the information shared, the frequency and freshness of that information, and whether the parties are engaged in parallel conduct.

China’s anti-monopoly law does not specifically cite information exchange as an anticompetitive infringement. However, it does prohibit communications which are deemed to be agreements or concerted practices, designed to harm competition. Unlike in the EU, for information exchange to be considered anticompetitive, the parties involved must engage in parallel conduct. Given the quasi-governmental nature of trade associations in China, information exchange through trade associations is usually handled with less care, and is particularly problematic in China. In addition, China’s newly-consolidated State Administration for Market Regulation (SAMR), which has both antitrust and merger functions, has increasingly considered information exchange during its recent merger reviews, as well as in the remedies it has imposed.

In the EU, the line between permissible information exchange and collusion is not as clear-cut as many would like. The European Commission assesses factors such as the frequency of the exchange and the “age” of the exchanged information. But there is no formal guidance as to when the information is old enough not to raise competition concerns. There is a strong desire in Europe for the EC to provide additional guidelines in this respect.

Information exchanges in the US are analysed under the rule-of-reason framework, which is a highly fact-intensive analysis. The likelihood of anticompetitive harm is weighed against the procompetitive benefits. Unlike their European and Chinese counterparts, antitrust agencies in the US have articulated safe harbours for certain types of information exchanges. These are information exchanges managed by a third party, and that involve information more than three months old, and where five or more firms contribute data, no single firm contributes more than 25% of a statistic, and there is no way to back out a single firm’s data.

Beyond Vivian’s panel, a number of other interesting points arose during the conference.

Regulators across the globe are expected to use creative investigative tools when looking into acquisitions involving nascent competitors, particularly in the tech space

Panelists agreed that the current merger control laws are sufficient to address the concern of how dominant firms acquire innovative technology to stop or slow down potential rivals, a practice that is also coined as “killer acquisitions”. However, antitrust regulators are increasingly struggling with correctly predicting whether the innovative start-up could have survived without the acquisition, such as obtaining independent financial backing, or truly offering a successful and superior product. Thus, regulators are considering a variety of proposals, such as shifting the burden of proof in merger investigations onto the parties, or performing more retrospective merger reviews, to become better at identifying the true killer acquisition, and avoid chilling innovation.

Gender bias

Female lawyers continue to face discrimination in the legal field. The final speaker, wrapping up the conference, discussed studies which show that certain traits in men that are associated with leadership and confidence are viewed as aggressiveness when displayed by women. Harvard Business Review recently reported on a research finding that there was a gender difference in competitiveness, in that women tended to be less competitive than men, and this directly correlated with a promotion gap. Legal professionals, both women and men, need to become more conscious about the subconscious bias that can unfairly colour a female colleague’s capabilities.

Background

GCR Live Women in Antitrust is a conference held each year in Washington, D.C., in which the leading females in competition law from all over the globe debate the most relevant topics in antitrust. This was the 3rd time that this event has been run. The full agenda is available here.