By BRANDON MITCHENER, Staff Reporter of THE WALL STREET JOURNAL
BRUSSELS -- In a dramatic change of tone on antitrust policy, the U.S.'s top antitrust official has endorsed the establishment of an international organization to improve coordination among trust busters and ultimately vet cross-border mergers.
U.S. Assistant Attorney-General Joel Klein told a surprised international meeting of lawyers, economists and antitrust officials there was no other way to relieve regulatory friction generated by increasingly large and complicated deals.
While stressing that he favored a "cautious beginning," Mr. Klein said "the time has come for a world organization committed to these issues."
At the same time, the U.S. official was emphatic that any such organization not be a part of the World Trade Organization -- an idea the European Union has repeatedly promoted. The most contentious mergers down the road will need resolution of "naked competition issues" with no relevance to global trade, he said.
Many participants at the conference on the 10th anniversary of the EU's Merger Task Force welcomed Mr. Klein's remarks as an overdue admission that the current process of clearing large mergers and acquisitions places an unnecessary burden on business and society.
Jacques Bougie, chief executive officer of Alcan Aluminium Ltd., said his company this year had to submit merger notifications in 16 countries in eight different languages at a cost of millions of dollars in its attempt to buy Pechiney SA of France and Alusuisse Lonza Group AG, or Algroup, of Switzerland. Alcan ultimately went ahead with the Algroup deal but gave up on Pechiney in the face of stiff regulatory opposition.
"They all require the same information but you can't send them the same documents because they require it in different formats," he said.
Despite the fact that he failed to win EU approval of his bid to purchase Pechiney, Mr. Bougie said the body's merger review regime was the "right directional model for a multijurisdictional system."
Contrary to the open-ended process in the U.S., the EU regime requires the commission to reach decisions within a strict, five-month timetable. It is also multilateral by definition, centered around the European Commission's merger task force, but includes consultations with both individual European governments and other countries, including the U.S., Canada and Japan.
Mr. Klein's announcement follows a report by the U.S. Justice Department's International Competition Policy Advisory Committee published in February. That report called for a "Global Competition Initiative" to consider "a full range of competition policy matters of consequence to the global economy."
Specifically, it endorsed dialogue directed toward greater convergence of competition law and analysis -- starting with standardized forms and similar deadlines for decisions -- and ultimately the establishment of an organization that would act as an information center and offer mediation and other dispute resolution capabilities.
William Rowley, chairman of the International Bar Association's business law group, welcomed Mr. Klein's proposed organization as a catalyst to create incentives for change in antitrust authorities. Mr. Klein's comments were all the more welcome because the ICPAC report had received little attention following its publication. "Until today the U.S. has been hesitant" to promote it, he said.
What has changed, according to Mr. Klein, is the number and complexity of cross-border mergers that raise similar regulatory concerns in several countries.
Antitrust practitioners see a one-stop shop as the best bulwark against contradictory decisions in different jurisdictions.
Mr. Klein said an international antitrust body might begin as a simple working group or committee comprised of representatives from existing international organizations such as the WTO, Organization of Economic Cooperation and Development and the United Nations Conference on Trade and Development.
Mr. Bougie said the organization also ought to include business representatives and Mr. Rowley made a pitch for the inclusion of the IBA.
Write to Brandon Mitchener at brandon.mitchener@wsj.com:
