The question of whether U.S. antitrust enforcement should emulate foreign whistleblower rewards programs as part of a crackdown on cartels is analyzed in a recent article by a Constantine Cannon attorney: Making it Easier to Whistle While You Work.

Cartel detection and prosecution are top priorities for the Antitrust Division of the U.S. Department of Justice (“Antitrust Division”) – regardless of which political party occupies the White House.  Given the often secretive nature of cartels, however, they can be hard to detect.  The Antitrust Division relies on its Corporate Leniency Program to encourage self-reporting of cartel activity, by offering immunity and/or reduced sanctions.   

As important as leniency programs are, however, they are limited.  Given their narrow focus on those at the heart of the cartel, corporate leniency programs fail to offer people who are aware of, but not complicit in, cartel activity with any incentive to report illegal activity.  This absence of an antitrust informant rewards program undoubtedly means that much cartel activity victimizing U.S. consumers goes unreported. 

Over the past 10 years, four jurisdictions – South Korea, Pakistan, the United Kingdom and Hungary – have addressed the limitations of their corporate leniency programs by adding an antitrust informant, or whistleblower, rewards program.  Each jurisdiction noted that the aim of adding a rewards program was to increase reporting from those who are either uninvolved in, or on the periphery, of a cartel. 

The article, Making it Easier to Whistle While You Work, concludes that like the foreign jurisdictions mentioned above, the U.S. would benefit from a whistleblower reward program as part of a comprehensive and modern approach to aggressive antitrust enforcement.

The European Commission, the executive branch of the European Union, is asking for comments about how to overcome obstacles to a modern, integrated card payments system across Europe. 

The European Commission is requesting these comments on its “green paper” assessing the current payment landscape in Europe.  This initiative covers all payments – including e-commerce and mobile payments – made with a credit or debit card across the 27-nation European market.

The green paper takes aim at a current market situation fragmented along national borders with a small number of domestic networks and only two major international players – Visa and MasterCard.  According to the green paper, the Single Euro Payment Area or SEPA, which will replace 32 separate payment regimes with a single one to facilitate faster and cheaper cross-border payments, may further entrench this duopoly.  This is because few domestic schemes are accepted outside of their home countries, and many are shutting down.

“Carrying a virtual train ticket or repaying a friend with your mobile phone, buying your groceries online, paying with your debit card abroad — the way European citizens shop and pay is radically changing,” the European Commission’s announcement of the consultation explains. “A secure and transparent integrated payments environment throughout the EU could create more efficient, modern and safer means of payments — for the benefits of consumers, merchants and payment providers.”

The main issues identified in the paper are:

    * Market access and entry for existing and new service providers

    * Payment security and data protection

    * Transparent and efficient pricing of payment services

    * Technical standardization

    * Inter-operability between service providers

The green paper is available from the EU website and comments may be submitted until April 11, 2012.  The Commission is expected to announce further action before the summer of 2012.

The United Kingdom’s Office of Fair Trading (OFT) is calling in reinforcements to expand Great Britain’s investigation into whether competition is being blocked in the markets for concrete and its main ingredients, aggregate and cement.

The OFT has referred Great Britain’s aggregates, cement, and ready-mix concrete markets to the U.K.’s Competition Commission, an independent body that conducts in-depth investigations into mergers and markets.

The OFT, which has been investigating these markets since 2010, announced that it has concerns that the markets “are not working well.”  In particular, the OFT notes that  five major players account for upwards of 90% of the cement market, 75% of aggregates sales, and around 70% of ready-mix production.

The big five firms are London-based Anglo American Plc, Germany’s Heidelberg Cement AG, Switzerland’s Holcim Ltd., Paris- based Lafarge SA, and Mexico’s Cemex SAB.

The OFT also believes that there are high barriers to entry, vertical integration, and multiple contacts and information exchanges across the markets.

If the Competition Commission concludes that any feature or combination of features in these markets prevents, restricts or distorts competition, the Commission must seek to remedy the problems that it identifies either by introducing remedies itself or by recommending action by other British agencies.

The FTC has approved the final order resolving claims that Pool Corporation, Inc. (“PoolCorp”) acted anticompetitively in violation of Section 5 of the Federal Trade Commission Act. 

PoolCorp is a major distributor of commercial and residential swimming pool supplies, products, and equipment.  According to the FTC complaint in In the Matter of Pool Corporation, PoolCorp is the “largest nationwide buyer of pool products, commonly representing 30 to 50 percent of a manufacturer’s total sales.”  In local markets, PoolCorp allegedly has had “a market share of approximately 80 percent or higher for at least the past five years.”    

The FTC alleged that PoolCorp “unlawfully maintained its monopoly power by threatening to refuse to deal with any manufacturer that sells its pool products to a new distributor entering the market, thereby foreclosing potential rivals from an input necessary to compete.”  The Statement provided by Commissioners Julie Brill, Jon Leibowitz and Edith Ramirez in support of the Complaint and Order highlights a lack of independent business reasons or efficiency justifications for the alleged conduct. 

Commissioner J. Thomas Rosch provided a Dissenting Statement in which he claimed there was a lack of evidence of any violation.  In particular, Commissioner Rosch noted that “no entrants were actually excluded” from the markets at issue and that there was “no consumer injury” in this case.  Moreover, Commissioner Rosch found “legitimate reasons” for manufacturers not to sell to new entrants, such as a new entrant’s failure to demonstrate that it offers “adequate facilities, a history of successful operations, and a favorable credit history ….” 

PoolCorp has executed a Consent Agreement requiring particular conduct and reporting practices.

The U.S. Federal Trade Commission (the “FTC”) has issued proposed changes to streamline its rules relating to investigatory procedures and alleged misconduct of attorneys.

The proposed changes deal with Parts 2 and 4 of the FTC’s Rules of Practice and are designed to improve investigations and to keep up with changes in electronic discovery.

The agency noted that the Part 2 rules were in need of reform because of concerns that modern discovery has become a source of delay in its investigations, especially because “information is no longer accurately measured in pages, but instead in megabytes” and because “parties can no longer complete searches by merely looking in file cabinets and desk drawers.”  The FTC is re-examining the rules to “not only account for the widespread use of ESI, but also to improve the efficiency of investigations.” 

Specific changes include:

* requiring parties to meet and confer with the FTC on an accelerated schedule to resolve electronic discovery issues related to civil investigative demands (“CIDs”) and subpoenas;

* streamlining the procedure to resolve disputes over FTC subpoenas and CIDs;

*  expediting the pre-merger review process by authorizing FTC General Counsel to initiate enforcement proceedings when a party fails to comply with the Hart-Scott-Rodino second request process;

* relieving a party of the obligation to preserve documents for an FTC investigation if a year has passed without any written communication from the FTC.

The FTC is also proposing to amend Rule 4.1(e) regarding attorney disciplinary procedures by providing additional guidance regarding the appropriate standards of conduct and procedures to address any alleged violations. 

The proposed rule changes will be published in the Federal Register and subject to public comment until March 23, 2012.

The FTC has separately approved Rule 2.17 to aid in maintaining the confidentiality of its investigations.  This new rule delays notifying targets of FTC investigations that the FTC has requested information about them from third parties, when such disclosure would tip them off or otherwise jeopardize the investigation.