Request for Comments on Proposed Agreement Between the Government of the United States of America and the Government of Australia on Mutual Antitrust Enforcement Assistance

DEPARTMENT OF JUSTICE

Antitrust Division

Federal Trade Commission

Request for Comments on Proposed Agreement Between the Government

of the United States of America and the Government of Australia on

Mutual Antitrust Enforcement Assistance

AGENCY: Department of Justice and Federal Trade Commission.

ACTION: Notice.

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SUMMARY: Pursuant to Section 7 of the International Antitrust

Enforcement Assistance Act, 15 U.S.C. 6206 (IAEAA), the Attorney

General, with the concurrence of the Federal Trade Commission

(Commission), hereby publishes and requests public comment on the text

of a proposed Agreement between the Government of the Untied States of

America and the Government of Australia on Mutual Antitrust Enforcement

Assistance. The Attorney General and the Commission have concluded that

the proposed agreement satisfies the requirements of the IAEAA. The

proposed agreement, if entered into by the Untied States and Australia,

would be the first mutual antitrust enforcement assistance agreement

entered into pursuant to the IAEAA. Comments on this draft agreement

should be submitted in writing within 45 days of its publication in the

Federal Register.

FOR FURTHER INFORMATION CONTACT:

Persons wishing to comment on the proposed agreement should submit

their views to Mr. A. Douglas Melamed, Deputy Assistant Attorney

General, Antitrust Division, Department of Justice, 950 Pennsylvania

Avenue, N.W., Washington, D.C. 20530, 202-514-4510, with a copy to Ms.

Debra Valentine, Assistant Director, International Antitrust, Bureau of

Competition, Federal Trade Commission, Washington, D.C. 20580, 202-326-

2133.

[[Page 20023]]

Dated: April 17, 1997.

A. Douglas Melamed,

Deputy Assistant Attorney General, Antitrust Division, Department of

Justice.

Dated: April 17, 1997.

Debra A. Valentine,

Assistant Director for International Antitrust, Bureau of Competition,

Federal Trade Commission.

A. Douglas Melamed,

Deputy Assistant Attorney General, Antitrust Division, Department of

Justice.

Agreement Between the Government of the United States of America and

the Government of Australia on Mutual Antitrust Enforcement Assistance

The Government of the United States of America and the Government

of Australia (individually a ``Party'' or collectively the

``Parties''), desiring to improve the effectiveness of the enforcement

of the antitrust laws of both countries through cooperation and mutual

legal assistance on a reciprocal basis, hereby agree as follows:

Article I

Definitions

Antitrust Authority--refers, in the case of the United States, to

the United States Department of Justice or the United States Federal

Trade Commission. In the case of Australia, the term refers to the

Australian Competition and Consumer Commission.

Antitrust Evidence--refers to information, testimony, statements,

documents or copies thereof, or other things that are obtained, in

anticipation of, or during the course of, an investigation or

proceeding under the Parties' respective antitrust laws, or pursuant to

the Parties' Mutual Assistance Legislation.

Antitrust Laws--refers, in the case of the United States, to the

laws enumerated in subsection (a) of the first section of the Clayton

Act, 15 U.S.C. 12(a), and to Section 5 of the Federal Trade Commission

Act, 15 U.S.C. 45, to the extent that such Section 5 applies to unfair

methods of competition. In the case of Australia, the term refers to

Part IV of the Trade Practices Act 1974; other provisions of that Act

except Part X in so far as they relate to Part IV; Regulations made

under that Act in so far as they relate to Part IV, except Regulations

to the extent that they relate to Part X; and the Competition Code of

the Australian States and Territories.

Central Authority--refers, in the case of the United States, to the

Attorney General (or a person designated by the Attorney General), in

consultation with the U.S. Federal Trade Commission. In the case of

Australia, the term refers to the Australian Competition and Consumer

Commission, in consultation with the Attorney General's Department.

Executing Authority--refers, in the case of the United States, to

the Antitrust Authority designated to execute a particular request on

behalf of a Party. In the case of Australia, the term includes the

Australian Competition and Consumer Commission and the Attorney

General's Department.

Mutual Assistance Legislation--refers, in the case of the United

States, to the International Antitrust Enforcement Assistance Act of

1994, 15 U.S.C. 6201-6212, Pub. L. No. 103-438, 108 Stat. 4597. In the

case of Australia, the term refers to the Mutual Assistance in Business

Regulation Act 1992 and the Mutual Assistance in Criminal Matters Act

1987, and Regulations made pursuant to those Acts.

Person or Persons--refers to any natural person or legal entity,

including corporations, unincorporated associations, partnerships, or

bodies corporate existing under or authorized by the laws of either the

United States, its States, or its Territories, the laws of Australia,

its States, or its Territories, or the laws of other sovereign states.

Request--refers to a request for assistance under this Agreement.

Requested Party--refers to the Party from which assistance is

sought under this Agreement, or which has provided such assistance.

Requesting Party--refers to the Party seeking or receiving

assistance under this Agreement.

Article II

Object and Scope of Assistance

A. The Parties intend to assist one another and to cooperate on a

reciprocal basis in providing or obtaining antitrust evidence that may

assist in determining whether a person has violated, or is about to

violate, their respective antitrust laws, or in facilitating the

administration or enforcement of such antitrust laws.

B. Each Party's Antitrust Authorities shall, to the extent

compatible with that Party's laws, enforcement policies, and other

important interests, inform the other Party's Antitrust Authorities

about activities that appear to be anticompetitive and that may be

relevant to, or may warrant, enforcement activity by the other Party's

Antitrust Authorities.

C. Each Party's Antitrust Authorities shall, to the extent

compatible with that Party's laws, enforcement policies, and other

important interests, inform the other Party's Antitrust Authorities

about investigative or enforcement activities taken pursuant to

assistance provided under this Agreement that may affect the important

interests of the other Party.

D. Nothing in this Agreement shall require the Parties or their

respective Antitrust Authorities to take any action inconsistent with

their respective Mutual Assistance Legislation.

E. Assistance contemplated by this Agreement includes but is not

limited to:

1. disclosing, providing, exchanging, or discussing antitrust

evidence in the possession of an Antitrust Authority;

2. obtaining antitrust evidence at the request of an Antitrust

Authority of the other Party, including

(a) taking the testimony or statements of persons or otherwise

obtaining information from persons,

(b) obtaining documents, records, or other forms of documentary

evidence,

(c) locating or identifying persons or things, and

(d) executing searches and seizures, and disclosing, providing,

exchanging, or discussing such evidence; and

3. providing copies of publicly available records, including

documents or information in any form, in the possession of government

departments and agencies of the national government of the Requested

Party.

F. Assistance may be provided whether or not the conduct underlying

a request would constitute a violation of the antitrust laws of the

Requested Party.

G. Nothing in this Agreement shall prevent a Party from seeking

assistance from or providing assistance to the other pursuant to other

agreements, treaties, arrangements, or practices, including the

Agreement Between the Government of Australia and the Government of the

United States of America Relating to Cooperation on Antitrust Matters

of June 29, 1992, either in place of or in conjunction with assistance

provided pursuant to this Agreement.

H. Except as provided by paragraphs C and D of Article VII, this

Agreement shall be used solely for the purpose of mutual antitrust

enforcement assistance between the Parties. The provisions of this

Agreement shall not give rise to a right on the part of any private

person to obtain, suppress, or exclude any evidence, or to impede the

executive of a request made pursuant to this Agreement.

I. Nothing in this Agreement compels a person to provide antitrust

evidence in violation of any legally applicable right or privilege.

J. Nothing in this Agreement affects the right of an Antitrust

Authority of

[[Page 20024]]

one Party to seek antitrust evidence on a voluntary basis from a person

located in the territory of the other Party, nor does anything in this

Agreement preclude any such person from voluntarily providing antitrust

evidence to an Antitrust Authority.

Article III

Requests for Assistance

A. Requests for assistance under this Agreement shall be made by an

Antitrust Authority of the Requesting Party. Such requests shall be

made in writing and directed to the Central Authority of the Requested

Party. With respect to the United States, the Attorney General, acting

as the Central Authority, will upon receipt forward a copy of each

request to the Federal Trade Commission.

B. Requests shall include, without limitation:

1. A general description of the subject matter and nature of the

investigation or proceeding to which the request relates, including

identification of the persons subject to the investigation or

proceeding and citations to the specific antitrust laws involved giving

rise to the investigation or proceeding; such description shall include

information sufficient to explain how the subject matter of the request

concerns a possible violation of the antitrust laws in question;

2. The purpose for which the antitrust evidence, information, or

other assistance is sought and its relevance to the investigation or

proceeding to which the request relates. A request by the United States

shall state either that the request is not made for the purpose of any

criminal proceedings or that the request is made for a purpose that

includes possible criminal proceedings. In the former case, the request

shall contain a written assurance that antitrust evidence obtained

pursuant to the request shall not be used for the purposes of criminal

proceedings, unless such use is subsequently authorized pursuant to

Article VII. In the latter case, the request shall indicate the

relevant provisions of law under which criminal proceedings may be

brought;

3. A description of the antitrust evidence, information, or other

assistance sought, including, where applicable and to the extent

necessary and possible:

(a) the identity and location of any person from whom evidence is

sought, and a description of that person's relationship to the

investigation or proceeding which is the subject of the request;

(b) a list of questions to be asked of a witness;

(c) a description of documentary evidence requested; and

(d) with respect to searches and seizures, a precise description of

the place or person to be searched and of the antitrust evidence to be

seized, and information justifying such search and seizure under the

laws of the Requested Party;

4. Where applicable, a description of procedural or evidentiary

requirements bearing on the manner in which the Requesting Party

desires the request to be executed, which may include requirements

relating to:

(a) the manner in which any testimony or statement is to be taken

or recorded, including the participation of counsel;

(b) the administration of oaths;

(c) any legal privileges that may be invoked under the law of the

Requesting Party that the Requesting Party wishes the Executing

Authority to respect in executing the request, together with an

explanation of the desired method of taking the testimony or provision

of evidence to which such privileges may apply; and

(d) the authentication of public records;

5. The desired time period for a response to the request;

6. Requirements, if any, for confidential treatment of the request

or its contents; and

7. A statement disclosing whether the Requesting Party holds any

proprietary interest that could benefit or otherwise be affected by

assistance provided in response to the request; and

8. Any other information that may facilitate review or execution of

a request.

C. Requests shall be accompanied by written assurances of the

relevant Antitrust Authority that there have been no significant

modifications to the confidentiality laws and procedures described in

Annex A hereto.

D. An Antitrust Authority may modify or supplement a request prior

to its execution if the Requested Party agrees.

Article IV

Limitations on Assistance

A. The Requested Party may deny assistance in whole or in part if

that Party's Central Authority or Executing Authority, as appropriate,

determine that:

1. a request is not made in accordance with the provisions of this

Agreement;

2. execution of a request would exceed the Executing Authority's

reasonably available resources;

3. execution of a request would not be authorized by the domestic

law of the Requested Party;

4. execution of a request would be contrary to the public interest

of the Requested Party.

B. Before denying a request, the Central Authority or the Executing

Authority of the Requested Party, as appropriate, shall consult with

the Central Authority of the Requesting Party and the Antitrust

Authority that made the request to determine whether assistance may be

given in whole or in part, subject to specified terms and conditions.

C. If a request is denied in whole or in part, the Central

Authority or the Executing Authority of the Requested Party, as

appropriate, shall promptly inform the Central Authority of the

Requesting Party and the Antitrust Authority that made the request and

provide an explanation of the basis for denial.

Article V

Execution of Requests

A. After receiving a request, the Central Authority shall promptly

provide the Requesting Party an initial response that includes, when

applicable, an identification of the Executing Authority (Authorities)

for the Request.

B. The Central Authority of the United States, the Attorney General

of Australia, or, once designated, the Executing Authority of either

Party may request additional information concerning the request or may

determine that the request will be executed only subject to specified

terms and conditions. Without limitation, such terms and conditions may

relate (1) The manner or timing of the execution of the request, or (2)

the use or disclosure of any antitrust evidence provided. If the

Requesting Party accepts assistance subject to such terms and

conditions, it shall comply with them.

C. A request shall be executed in accordance with the laws of the

Requested Party. The method of execution specified in the request shall

be followed, unless it is prohibited by the law of the Requested Party

or unless the Executing Authority otherwise concludes, after

consultation with the Authority that made the request, that a different

method of execution is appropriate.

D. The Executing Authority shall, to the extent permitted by the

laws and other important interests of the Requested Party, facilitate

the participation in the execution of a

[[Page 20025]]

request of such officials of the Requesting Party as are specified in

the request.

Article VI

Confidentiality

A. Except as otherwise provided by this paragraph and Article VII,

each Party shall, to the fullest extent possible consistent with that

Party's laws, maintain the confidentiality of any request and of any

information communicated to it in confidence by the other Party under

this Agreement. In particular:

1. The Requesting Party may ask that assistance be provided in a

manner that maintains the confidentiality of a request and/or its

contents. If a request cannot be executed in that manner, the Requested

Party shall so inform the Requesting Party, which shall then determine

the extent to which it wishes the request to be executed; and

2. Antitrust evidence obtained pursuant to this Agreement shall be

kept confidential by both the Requesting Party and the Requested Party,

except as provided in paragraph E of this Article and Article VII.

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.

B. By entering into this Agreement, each Party confirms that:

1. The confidentiality of antitrust evidence obtained under this

Agreement is ensured by its national laws and procedures pertaining to

the confidential treatment of such evidence, and that such laws and

procedures as are set forth in Annex A to this Agreement are sufficient

to provide protection that is adequate to maintain securely the

confidentiality of antitrust evidence provided under this Agreement;

and

2. The Antitrust Authorities designated herein are themselves

subject to the confidentiality restrictions imposed by such laws and

procedures.

C. Unauthorized or illegal disclosure or use of information

communicated in confidence to a Party pursuant to this Agreement shall

be reported immediately to the Central Authority and the Executing

Authority of the Party that provided the information; the Central

Authorities of both Parties, together with the Executing Authority that

provided the information, shall promptly consult on steps to minimize

any harm resulting from the disclosure and to ensure that unauthorized

or illegal disclosure or use of confidential information does not

recur. The Executing Authority that provided the information shall give

notice of such unauthorized or illegal disclosure or use to the person,

if any, that provided such information to the Executing Authority.

D. Unauthorized or illegal disclosure or use of information

communicated in confidence under this Agreement is a ground for

termination of the Agreement by the affected Party, in accordance with

the procedures set out in Article XIII.C.

E. Nothing in this Agreement shall prevent disclosure, in an action

or proceeding brought by an Antitrust Authority of the Requesting Party

for a violation of the antitrust laws of the Requesting Party, of

antitrust evidence provided hereunder to a defendant or respondent in

that action or proceeding, if such disclosure is required by the law of

the Requesting Party. The Requesting Party shall notify the Central

Authority of the Requested Party and the Executing Authority that

provided the information at least ten days in advance of any such

proposed disclosure, or, if such notice cannot be given because of a

court order, then as promptly as possible.

Article VII

Limitations on use

A. Except as provided in paragraphs C and D of this Article,

antitrust evidence obtained pursuant to this Agreement shall be used or

disclosed by the Requesting Party solely for the purpose of

administering or enforcing the antitrust laws of the Requesting Party.

B. Antitrust evidence obtained pursuant to this Agreement may be

used or disclosed by a Requesting Party to administer or enforce its

antitrust laws only (1) In the investigation or proceeding specified in

the request in question and (2) for the purpose stated in the request,

unless the Executing Authority that provided such antitrust evidence

has given its prior written consent to a different use or disclosure;

when the Requested Party is Australia, such consent shall not be given

until the Executing Authority has obtained any necessary approval from

the Attorney General.

C. Antitrust evidence obtained pursuant to this Agreement may be

used or disclosed by a Requesting Party with respect to the

administration or enforcement of laws other than its antitrust laws

only if (1) Such use or disclosure is essential to a significant law

enforcement objective and (2) the Executing Authority that provided

such antitrust evidence has given its prior written consent to the

proposed use or disclosure. In the case of the United States, the

Executing Authority shall provide such consent only after it has made

the determinations required for such consent by its mutual assistance

legislation.

D. Antitrust evidence obtained pursuant to this Agreement that has

been made public consistently with the terms of this Article may

thereafter be used by the Requesting Party for any purpose consistent

with the Parties' mutual assistance legislation.

Article VIII

Changes in Applicable Law

A. The Parties shall provide to each other prompt written notice of

actions within their respective States having the effect of signficant

modifying their antitrust laws or the confidentiality laws and

procedures set out in Annex A to this Agreement.

B. In the event of a significant modification to a Party's

antitrust laws or confidentiality laws and procedures set out in Annex

A to this Agreement, the Parties shall promptly consult to determine

whether this Agreement or Annex A to this Agreement should be amended.

Article IX

Taking of Testimony and Production of Documents

A. A person requested to testify and produce documents, records, or

other articles pursuant to this Agreement may be compelled to appear

and testify and produce such documents, records, and other articles, in

accordance with the requirements of the laws of the Requested Party.

Every person whose attendance is required for the purpose of giving

testimony pursuant to this Agreement is entitled to such fees and

allowances as may be provided for by the law of the Requested Party.

B. Upon request by the Requesting Party, the Executing Authority

shall furnish information in advance about the date and place of the

taking of testimony or the production of evidence pursuant to this

Agreement.

C. The Executing Authority shall, to the extent permitted by the

laws and other important interests of the Requested Party, permit the

presence during the execution of the request of persons specified in

the request, and shall, to the extent permitted by the laws and other

important interests of the Requested Party, allow such persons to

question the person giving the testimony or providing the evidence.

D. The Executing Authority shall, to the extent permitted by the

laws of the Requested Party, comply with any

[[Page 20026]]

instructions of the Requesting Party with respect to any claims of

legal privilege, immunity, or incapacity under the laws of the

Requesting Party.

E. The Executing Authority shall, to the extent permitted by the

laws of the Requested Party, permit a person whose testimony is to be

taken pursuant to this Article to have counsel present during the

testimony.

F. A Requesting Party may ask the Requested Party to facilitate the

appearance in the Requesting Party's territory of a person located in

the territory of the Requested Party, for the purpose of being

interviewed or giving testimony. The Requesting Party shall indicate

the extent to which the person's expenses will be paid. Upon receiving

such a request, the Executing Authority shall invite the person to

appear before the appropriate authority in the territory of the

Requesting Party. The Executing Authority shall promptly inform the

Requesting Party of the person's response.

G. Antitrust evidence consisting of testimony or documentary

evidence provided by the Requested Party pursuant to this Agreement

shall be authenticated in accordance with the requirements of the law

of the Requested Party, in so far as such requirements would not

violate the laws of the Requested Party.

Article X

Search and Seizure

A. Where a request is to be executed by means of the search and

seizure of antitrust evidence, the request shall include such

information as is necessary to justify such action under the laws of

the Requested Party. The Central Authorities shall confer, as needed,

on alternative, equally effective procedures for compelling or

obtaining the antitrust evidence that is the subject of a request.

B. Upon request, every official of a Requested Party who has

custody of antitrust evidence seized pursuant to this Agreement shall

certify the continuity of custody, the identity of the antitrust

evidence, and the integrity of its condition; the Requested Party shall

furnish such certifications in the form specified by the Requesting

Party.

Article XI

Return of Antitrust Evidence

At the conclusion of the investigation or proceeding specified in a

request, the Central Authority or the Antitrust Authority of the

Requesting Party shall return to the Central Authority or the Antitrust

Authority of the Requested Party from which it obtained antitrust

evidence all such evidence obtained pursuant to the execution of a

request under this Agreement, along with all copies thereof, in the

possession or control of the Central Authority or Antitrust Authority

of the Requesting Party; provided, however, that antitrust evidence

that has become evidence in the course of judicial or administrative

proceedings or that has properly entered the public domain is not

subject to this requirement.

Article XII

Costs

Unless otherwise agreed, the Requested Party shall pay all costs of

executing a request, except for the fees of expert witnesses, the costs

of translation, interpretation, and transcription, and the allowances

and expenses related to travel to the territory of the Requested Party,

pursuant to Articles IX and X, by officials of the Requesting Party.

Article XIII

Entry into Force and Termination

A. This Agreement shall enter into force upon notification by each

Party to the other through diplomatic channels that it has completed

its necessary internal procedures.

B. Assistance under this Agreement shall be available in

investigations or proceedings under the Parties' antitrust laws

concerning conduct or transactions occurring before as well as after

this Agreement enters into force.

C. As stated in Article VI.D of this Agreement, a Party may

unilaterally elect to terminate this Agreement upon the unauthorized or

illegal disclosure or use of confidential antitrust evidence provided

hereunder; provided, however, that neither Party shall make such an

election until after it has consulted with the other Party, pursuant to

Article VI.C, regarding steps to minimize any harm resulting from the

unauthorized or illegal disclosure or use of information communicated

in confidence under this Agreement, and steps to ensure that such

disclosure or use does not recur. Termination shall take effect

immediately upon notice or at such future date as may be determined by

the terminating Party.

D. On termination of this Agreement, the Parties agree, subject to

Article VI.E and Article VII, to maintain the confidentiality of any

request and information communicated to them in confidence by the other

Party under this Agreement prior to its termination; and to return, in

accordance with the terms of Article XI, any antitrust evidence

obtained from the other Party under this Agreement; provided, however,

that any such request or information that has become public in the

course of public judicial or administrative proceedings is not subject

to this requirement.

E. In addition to the procedure set forth in paragraph C of this

Article, either Party may terminate this Agreement by means of written

notice through diplomatic channels. Termination shall take effect 30

days after the date of receipt of such notification.

In witness whereof, the undersigned, being duly authorized by their

respective Governments, have signed this Agreement.

Done at ________ this ____ day of ________ 1997, in duplicate,

in the English language.

For the Government of The United States of America:

For the Government of Australia:

Annex A

This Annex cites and briefly describes the confidentiality laws and

procedures that would protect the confidentiality of antitrust evidence

that may be provided under this Agreement. Also included are laws and

procedures that provide sanctions for breaches of the confidentiality

provisions described herein.

I. United States of America

A. Confidentiality Laws and Procedures

15 U.S.C. Secs. 6201-6212, International Antitrust Enforcement

Assistance Act This statute authorizes the Department of Justice (DOJ)

and the Federal Trade Commission (FTC or, as used in this Part I,

Commission) to enter into bilateral agreements with other countries

permitting mutual assistance in the enforcement of the antitrust laws.

Specifically, it permits DOJ and FTC to exchange certain otherwise

confidential investigative information with foreign antitrust

authorities, where this will be in the public interest of the United

States and where it satisfies the important confidentiality and other

safeguards outlined in the statute.

Section 6207(b) of the statute prohibits DOJ and FTC from

disclosing, in violation of an antitrust mutual assistance agreement,

any antitrust evidence received under such agreement, except to the

extent such disclosure is required by law to be made to a defendant or

respondent in an action brought by DOJ or FTC. Such antitrust evidence

is exempt from other provisions of law that might otherwise be

construed to require disclosure, including the Freedom of Information

Act, 5 U.S.C. Sec. 552, described below.

This statute does not provide specific enforcement mechanisms for

the

[[Page 20027]]

confidentiality provision, or penalties for its breach. Other laws and

regulations, however, prohibit the improper use of non-public

information. See discussion in Part B, infra.

15 U.S.C. Secs. 1311-1314, Antitrust Civil Process Act (applies

only to DOJ) This statute authorizes the DOJ Antitrust Division to

issue compulsory process for documents or testimony in furtherance of

civil investigations. Section 1313(c) of this statute provides that,

other than for use in oral depositions in furtherance of such

investigations, no documents or transcripts produced pursuant to such

compulsory process shall be made publicly available without the consent

of the party that produced the materials. Such materials may, however,

be used when necessary before any court, grand jury or federal

administrative or regulatory agency in any case or proceeding,

including an investigation or proceeding conducted by the FTC. Such

materials may also be disclosed to Congress or to any authorized

committee or subcommittee thereof.

Section 1313(e) also provides for the return, at the completion of

an investigation, of original materials produced pursuant to this

statute during the course of the investigation. Any request for the

return of such materials must be in writing. The Division is permitted,

however, in certain circumstances, to keep copies of materials

produced.

Section 1314(g) exempts documents and testimony submitted in

response to compulsory process authorized by this statute from

disclosure under FOIA.

This statute does not provide specific enforcement mechanisms for

the confidentiality provisions, or penalties for its breach. Other laws

and regulations, however, prohibit the improper use of non-public

information. See discussion in part B, infra.

15 U.S.C. Secs. 41-68, the Federal Trade Commission Act (Applies Only

to FTC)

The confidentiality provisions of the Federal Trade Commission Act

are as follows:

Section 6(f) [15 U.S.C. Sec. 46(f)] states that the Commission

shall not have any authority to make public any trade secret or any

commercial or financial information which is obtained from any person

and which is privileged or confidential, except that the Commission may

disclose such information to officers and employees of appropriate

Federal law enforcement agencies or to any officer or employee of any

State law enforcement agency upon the prior certification of an officer

of any such Federal or State law enforcement agency that such

information will be maintained in confidence and will be used only for

official law enforcement purposes.

Section 21(b) [15 U.S.C. Sec. 57b-2(b)] provides that any document,

tangible thing, or transcript of oral testimony received by the

Commission pursuant to compulsory process in an investigation, a

purpose of which is to determine whether any person may have violated

any provision of the laws administered by the Commission, may not be

made available for examination by any individual other than a duly

authorized officer or employee of the Commission (including contractors

and consultants) without the consent of the person who produced the

document, thing, or transcript. Such materials may be used in

Commission proceedings and in judicial proceedings in which the

Commission is a party. Such materials may also be made available to

other Federal and State law enforcement agencies upon the certification

of an officer of such an agency that such information will be

maintained in confidence and will be used only for official law

enforcement purposes. This section does not prevent disclosure to

Congress, but the Commission is required to notify immediately the

owner or provider of any such information of a request from Congress

for information designated as confidential by the owner or provider.

Section 21(c) [15 U.S.C. Sec. 57b-2(c)] provides that all

information reported to or otherwise obtained by the Commission which

is not subject to the requirements of Section 21(b) shall be considered

confidential when so marked by the person supplying the information. If

the FTC determines that information may be disclosed because it is not

protected by Section 6(f), it must notify the submitter of the

information that the Commission intends to disclose the information

(i.e., place it on the public record, pursuant to Commission Rule 4.9)

not less than 10 days after receipt of the notification. Upon receipt

of such notification, the submitter may bring an action in United

States District Court seeking to restrain disclosure, including an

application for a stay of disclosure. The Commission shall not disclose

the information until the court has ruled on the application for a

stay.

Section 21(d) [15 U.S.C. Sec. 57b-2(d)] provides that the

provisions of 21(c) shall not be construed to prohibit disclosures: (A)

To Congress (with notice to the owner or provider of the information);

(B) of the results of investigations or studies (without identifying

information or disclosing trade secrets or any commercial or financial

information obtained from any person which is privileged or

confidential); (C) of relevant and material information in FTC

adjudicative proceedings or judicial proceedings in which the FTC is a

party, according to the FTC's rules for adjudicative proceedings or by

court rules or orders; (D) to Federal agencies of disaggregated

information for economic, statistical, or policymaking purposes only.

Section 21(f) [15 U.S.C. Sec. 57b-2(f)] provides that any document,

tangible thing, written report or answers to questions, or transcript

or oral testimony received by the Commission in any investigation, a

purpose of which is to determine whether any person may have violated

any provision of the laws administered by the Commission, and which is

provided pursuant to any compulsory process or which is provided

voluntarily in place of such compulsory process, shall be except from

disclosure under FOIA. Section 10 of the FTC Act [15 U.S.C. Sec. 50]

provides for criminal penalties for the unauthorized disclosure of

information obtained by the Commission; see the discussion in part B,

infra.

16 CFR 3.1. et seq., FTC Rules of Practice for Adjudicative Proceedings

(Applies Only to FTC)

Adjudicative proceedings are formal proceedings conducted under the

statutes administered by the Commission which are required by statute

to be determined on the record after an opportunity for an agency

hearing. An adjudicative proceeding is commenced when an affirmative

vote is taken by the Commission to issue a complaint. The rules provide

for the respondent to answer the complaint within a specified time, for

discovery, and for a hearing held before an Administrative Law Judge

(ALJ) for the purpose of receiving evidence relevant and material to

the Commission's complaint and the respondent's answer. The hearings

are open to the public, except to the extent that an in camera order is

entered by the ALJ or the Commission. See Rule 3.41(a).

Rule 3.45 [16 CFR 3.45] provides for in camera treatment of

documents and testimony which keeps such documents and testimony

confidential and not part of the public record of the hearing. Rule

3.45(b) provides that the ALJ may order documents, testimony, or

portions thereof offered into evidence, whether admitted or rejected,

to be placed in camera upon a finding that their public disclosure will

likely result in a clearly defined, serious injury to the person,

partnership or corporation requesting

[[Page 20028]]

their in camera treatment; only respondents, their counsel, authorized

Commission personnel, and court personnel concerned with judicial

review shall have access thereto. The order shall provide the date on

which in camera treatment will expire.

16 CFR 4.10(g), et seq., FTC Rules of Practice for Adjudicative

Proceedings (APPLIES ONLY to FTC)

Rule 4.10(g) provides that the following categories of materials

obtained by the FTC may be disclosed in FTC administrative or court

proceedings subject to FTC or court protective or in camera orders as

appropriate: (1) Material obtained through compulsory process or

voluntarily in lieu thereof, and protected by sections 21(b) and (f) of

the FTC Act; (2) material designated by the submitter as confidential,

and protected by section 21(c) of the FTC Act; or, (3) material that is

confidential commercial or financial information protected by section

6(f) of the FTC Act. Prior to disclosure of such material in a

proceeding, the submitter will be afforded an opportunity to seek a

protective or in cameria order. All other material obtained by the FTC

may be disclosed in FTC administrative or court proceedings at the

FTC's discretion except where prohibited by law.

Rule 26(c) of the Federal Rules of Civil Procedure

This rule provides that a court may grant, in civil litigation in

federal court, a protective order concerning discovery, including,

inter alia, that certain matters not be inquired into, or that the

scope of discovery be limited to certain matters; and that a trade

secret or other confidential research, development, or commercial

information not be disclosed or be disclosed only in a certain way.

A court may impose sanctions for violations of protective orders

entered pursuant to this rule.

Rule 6 of the Federal Rules of Criminal Procedure

This rule governs the conduct of grand jury proceedings. Subsection

(e) of this rule prohibits, without the permission of a court, public

disclosure of matters occurring before the grand jury by any person

having knowledge of such proceedings, except witnesses, who are free to

disclose their testimony.

Knowing violations of this rule are punishable as a contempt of

court.

5 U.S.C. Sec. 552. Freedom of Information Act

FOIA is a statute that provides that any person has a right of

access to federal agency records, except to the extent that FOIA

authorizes the agencies to withhold certain records from disclosure. Of

the categories of records which may be withheld under FOIA, those of

primary relevance to the antitrust enforcement agencies are:

Trade secrets and commercial or financial information, obtained

from a person, that is privileged or confidential (subsection

552(b)(4));

Records or information compiled for law enforcement purposes to the

extent that disclosure thereof could reasonably be expected, inter

alia, to interfere with enforcement proceedings or to disclose the

identify of a confidential source (subsection 552(b)(7)(A) and (D));

Intra-agency and inter-agency memoranda or letters that would be

routinely privileged in civil discovery, e.g., attorney work-product or

attorney-client information (subsection 552(b)(5));

National defense or foreign policy information that is property

classified (subsection 552(b)(1));

Information that may be withheld on the basis of other specific

statutory authority (subsection 552(b)(3)).

FOIA does not authorize withholding information from Congress.

28 CFR 167.7, Procedure for Processing Requests for Disclosure of

Information Subject to the Business Information Exemption to FOIA

(Applies Only to DOJ)

This regulation specifies the procedures DOJ must follow before it

can disclose, in response to a request under FOIA, any materials that

may qualify for exemption from disclosure as confidential business

information. The section requires that before any such disclosure can

be made, DOJ provide notice to submitters of information that either:

(i) Has been designated as confidential business information by the

submitter; or (ii) DOJ has reason to believe may constitute

confidential business information. This notice is intended to enable

the submitter to object to the planned disclosure and, if the submitter

chooses, seek a protective order. DOJ is not required to provide notice

to any submitter whose information DOJ has determined not to disclose.

This regulation does not provide specific enforcement mechanisms

for the confidentiality provision, or penalties for its breach. Other

laws and regulations, however, prohibit the improper use of non-public

information. See discussion in part B, infra.

5 U.S.C. Sec. 552a, Privacy Act

The Privacy Act permits Federal agencies to maintain ``systems of

records,'' i.e., records that are retrievable by the name, social

security number or other personal identifier of an individual U.S.

citizen (or permanent resident alien), subject to requirements that the

agencies disclose the existence of such records systems and that

individuals have access to records concerning themselves. The Privacy

Act, however, sets forth several exceptions to this general

restriction, including one that permits, under specified circumstances,

agencies to exempt investigatory material compiled for law enforcement

purposes from such ``systems of records'' and, thereby, to deny access

to such material.

B. Laws and Procedures Providing Sanctions for Breaches of the

Confidentiality Laws and Procedures

18 U.S.C. Sec. 1905, Trade Secrets Act

This statute provides criminal penalties for unauthorized

disclosure of trade secrets or confidential business information by any

government employee or agent of DOJ within the meaning of the Antitrust

Civil Process Act, who comes into possession or gains knowledge of such

information during the course of his or her employment or official

duties. Said penalties include a fine of not more than $1,000, one

year's imprisonment or both, and removal from employment.

18 U.S.C. Sec. 641, Theft of Government Property, Records

This statute provides criminal penalties for the theft,

embezzlement, knowing conversion, or unauthorized conveyance of any

record, voucher, money, or ``thing of value'' (which, according to

judicial interpretation, includes information) possessed by the United

States Government. Said penalties include a fine or imprisonment of not

more than 10 years, or both.

18 U.S.C. Sec. 1831 et seq., Economic Espionage Act

This statute provides criminal penalties for theft of trade

secrets, as that act is defined in the statute. It also provides

criminal penalties for economic espionage, which the statute, in

essence, defines as the theft of trade secrets to benefit a foreign

power. The penalty for individuals convicted of theft of trade secrets

under the statute includes a fine of not more than $500,000, or

imprisonment of not more

[[Page 20029]]

than ten years, or both, and for an organization includes a fine of not

more than $5 million. The penalty for individuals convicted of economic

espionage under the statute includes a fine of not more than $500,000,

or imprisonment of not more than 15 years, or both, and for

organizations includes a fine of not more than $10 million. Penalties

also include forfeiture of property used in or derived from trade

secret theft or economic espionage.

The statute specifically does not prohibit any otherwise lawful

activity conducted by a governmental entity of the United States, a

State, or a political subdivision of a State, nor shall it be construed

to affect the otherwise lawful disclosure of information by any

government employee under FOIA. The statute also preserves the

confidentiality of trade secrets in court proceedings brought

thereunder.

5 CFR 2635.703, Office of Government Ethics--Standards of Ethical

Conduct for Employees of the Executive Branch

This section prohibits the improper use of non-public information

by an Executive Branch employee to further his or her own private

interest or that of another person. Non-public information is

information that the employee gains by reason of Federal employment and

that he or she knows or reasonably should know has not been made

available to the general public. Section 2635.106 provides that any

violation may be cause for appropriate corrective or disciplinary

action pursuant to Government wide regulations or agency procedures,

which action may be in addition to any action or penalty prescribed by

law.

These sections have been incorporated by reference in the FTC's

Rules. See 16 CFR 5.1 et seq.

15 U.S.C. Sec. 50 (Federal Trade Commission Act) and 16 CFR 4.10(c)

(Applies Only to FTC)

This section of the FTC Act (and the above-referenced Rule)

provides that any officer or employee of the Commission who shall make

public any information obtained by the Commission without its

authority, unless directed by a court, shall be deemed guilty of a

misdemeanor, and, upon conviction thereof, shall be punished by a fine

not exceeding $5,000, or by imprisonment not exceeding one year, or by

fine and imprisonment, in the discretion of the court.

II. Australia

A. Confidentiality Laws and Procedures

The Trade Practices Act 1974

Section 89 outlines the procedure for seeking an authorization from

the Australian Competition and Consumer Commission (as used in this

Part II, Commission) in relation to certain anti-competitive conduct,

and in doing so it outlines the circumstances in which confidentiality

may be claimed in relation to information so placed before the

Commission and thus excluded from the public register of applications

for authorization. If the information contains particulars of a secret

formula or process, cash consideration offered for shares or assets, or

the current costs of manufacturing, producing or marketing goods or

services, then it will be excluded from the public register. Further,

if the information relates to anything else the Commission in its

discretion considers to be confidential, it may exclude the information

from the public register.

Where the Commission refuses a request to exclude such information

from the public register on the basis of its confidential nature, the

person who submitted the information may withdraw it, in which case

that submission will not form part of the application for

authorization.

Section 95 requires that the Commission keep a public register of

notifications, particularly in relation to conduct which amounts to

exclusive dealing. (Once notification is lodged, the corporation is

permitted to engage in such conduct until otherwise notified by the

Commission.) The section outlines the circumstances in which

confidentiality may be claimed in relation to information so placed

before the Commission and thus excluded from the public register of

notification. If the information contains particulars of a secret

formula or process, cash consideration offered for shares or assets, or

the current costs of manufacturing, producing or marketing goods or

services, then it will be excluded from the public register. Further,

if the information relates to anything else the Commission in its

discretion considers to be confidential, it may exclude the information

from the public register.

Where the Commission refuses a request to exclude such information

from the public register on the basis of its confidential nature, the

person who submitted the information may withdraw it, in which case

that submission will not form part of the notification.

The procedures for requesting that a document be excluded from the

public register on the basis of its confidential nature under sections

89(5) and 95(2) can be found in regulation 24(1) of the Trade Practices

Regulations.

Section 106 of the Trade Practices Act 1974 grants the Australian

Competition Tribunal, where it is satisfied that it is desirable to do

so by reason of the confidential nature of any evidence or matter or

for any other reason, the power to prohibit or restrict the publication

of evidence given before it, whether in public or private, or of

matters contained in documents filed or lodged with the Registrar,

received in evidence by the Tribunal or placed in the records of the

Tribunal.

Section 155AA of the Act provides that Commission officials must

not disclose any protected Part IV information to any person except as

part of the official's functions as a Commission official or when he/

she is required by law to disclose the information. ``Protected Part IV

information'' is defined as information relating to a matter under Part

IV and which has been obtained by the Commission under section 155.

Section 155 enables the Commission to require a person to answer

questions, provide information or produce documents, if the Commission,

the Chairperson or Deputy Chairperson has reason to believe that a

person is capable of furnishing information relating to a matter that

may constitute a contravention of the Trade Practices Act.

Section 157 of the Act, amongst other things, provides that: (a)

Where a corporation makes an application for authorization; or (b)

where the Commission has instituted proceedings or made an application

for an order against a corporation or other person, the Commission

shall provide, at the request of the corporation or other person, a

copy of every document furnished to or obtained by the Commission in

connexion with the matter that tends to establish the case of the

corporation or other person, other than documents obtained from the

corporation or other person or prepared by an officer or professional

adviser of the Commission. However, subsections (2) and (3) provide

that, when the Commission declines to comply with such a request, a

Court that is asked to order the Commission to comply may refuse to do

so ``if the Court considers it inappropriate to make the order by

reason that the disclosure of the contents of the document or part of

the document would prejudice any person or for any other reason.''

[[Page 20030]]

The Freedom of Information Act of 1982

The Freedom of Information Act 1982 gives members of the public

rights of access to official documents of Commonwealth Government

Ministers and agencies, limited only by exceptions and exemptions

necessary for the protection of the essential public interests and the

private and business affairs of persons in respect of whom information

is collected and held by agencies. Of the categories of documents that

are exempt from disclosure under FOI, those of relevance to antitrust

authorities are:

Section 33(1) operates to exempt documents, the disclosure of which

would or could be reasonably expected to cause damage to the security,

defence or international relations of the Commonwealth or would divulge

any information or matter communicated in confidence by or on behalf of

a foreign government, an authority of a foreign government or an

international organisation.

Section 36 operates to exempt documents where disclosure would

disclose opinion, advice or recommendation, or consultation or

deliberation relating to the deliberative processes involved in the

functions of the Commission, and such disclosure would be contrary to

the public interest.

Section 37 exempts documents if disclosure would, or could

reasonably be expected to, prejudice the conduct of an investigation,

or the enforcement or proper administration of the law. Documents are

also exempt if their disclosure under this Act would, or could

reasonably be expected to, endanger the life or physical safety of any

person.

Section 40(1)(d) exempts documents where disclosure would, or could

reasonably be expected to, have a substantial adverse effect on the

proper and efficient conduct of the operations of the Commission.

Section 43(1)(a) exempts documents containing trade secrets.

Section 43(1)(b) exempts documents containing information having a

commercial value that would, or could reasonably be expected to, be

destroyed or diminished if the information were disclosed.

Section 43(1)(c)(i) exempts documents where disclosure could be

reasonably expected to unreasonably adversely affect a company in

respect of its business affairs.

Section 43(1)(c)(ii) exempts documents where there is a reasonable

expectation that disclosure would prejudice future supply of

information to the Commission.

Section 45 exempts documents the disclosure of which would

constitute a breach of confidence. This exemption relates to

information communicated to the Commission in a relationship of

confidence as indicated on its face or in circumstances imparting an

obligation of confidentiality.

The Federal Court Act and the Federal Court Rules

Pursuant to Section 23 of the Federal Court Act and Order 15 of the

Federal Court Rules, courts may, in proceedings before them, issue

orders that information may not be disclosed or may be disclosed only

in a certain way. In addition, Order 15 of the Federal Court Rules

empowers persons seeking to avoid the production of documents subject

to discovery, to rely on the claim that they are privileged from

production, e.g., the documents are subject to legal professional

privilege, or to Crown privilege. (Order 15(17) preserves the right of

parties to rely on any rule of law which authorizes or requires the

withholding of any document on the grounds that its disclosure would be

harmful to the public interest.)

The Privacy Act 1988

The Privacy Act 1988 establishes a scheme to govern the collection,

storage, security, access, use and disclosure of personal information

by Commonwealth agencies through a set of rules called Information

Privacy Principles. This scheme is subject to prescribed exceptions

which limit an agency's use or disclosure of personal information

(Information Privacy Principles 10 and 11).

The Administrative Appeals Tribunal Act 1975

Section 36 of the Administrative Appeals Tribunal Act 1975 provides

that, in proceedings before it, the Attorney General may certify that

disclosure of a document would be contrary to the public interest, and

the Tribunal must do everything to ensure that the information in the

document is not disclosed other than to a member of the Tribunal.

The Administrative Decisions (Judicial Review) Act 1977

Under section 13 of the Administrative Decisions (Judicial Review)

Act 1977 an application may be made to the Commission for a statement

in respect of a decision setting forth, inter alia, the reasons for the

decision, the findings on material questions of fact, and a reference

to the evidence on which the findings were based. Section 13A sets out

information not required to be disclosed in response to such an

application, including, information as to a person's business affairs

which is supplied in confidence, or if published, would reveal a trade

secret.

Under section 14, the Attorney General can certify that the

disclosure of information would be contrary to the public interest.

The Public Service Regulations

Regulation 35 of the Public Service Regulations prohibits an

officer from disclosing information obtained in the course of official

duties unless authorised to do so.

The Evidence Act 1995

Section 130 of the Evidence Act 1995 provides that a court (whether

or not on the application of a person) may direct that a document

relating to matters of state not be adduced as evidence on the grounds

of public interest in preserving secrecy or confidentiality.

Information will be taken to relate to matters of state if adducing it

as evidence would, inter alia, prejudice the prevention, investigation

or prosecution of an offence; prejudice the prevention or investigation

of, or the conduct of proceedings for recovery of civil penalties

brought with respect to, other contraventions of the law; or disclose

the identity of existence of a confidential source of information

relating to the enforcement or administration of the law.

Section 131 provides (subject to certain exceptions) that evidence

is not to be adduced of communications made or documents prepared in

the context of attempts to negotiate the settlement of a dispute.

The Mutual Assistance in Criminal Matters Act 1987

Section 43B of the Mutual Assistance in Criminal Matters Act 1987

outlines restrictions on use of information sent to Australia in

response to a request made by the Attorney General under the Act in

relation to a criminal matter. It provides that such material is not

used or disclosed intentionally for any purpose other than that for

which it was requested unless the Attorney General has approved

otherwise.

The restriction on unauthorised use of the material is extended to

inadmissibility in evidence in any proceedings other than those for

which it was obtained without the Attorney General's approval. In

addition, any information, document, article or thing which has itself

been obtained directly or indirectly from a person as a result of

unapproved use of the material

[[Page 20031]]

received from the other country is also inadmissible in evidence in any

proceedings other than those for which it was requested (or used for

the purposes of any other investigation) without the Attorney General's

approval.

Section 43B(4) provides a penalty of two years imprisonment for

contravention of subsection (1).

Section 43C provides a penalty of two years imprisonment for

intentional disclosure of the contents of a request for assistance, of

the fact that a request has been made or of the fact that assistance

has been granted or refused where the person has such knowledge as a

result of his or her employment, unless such disclosure is necessary in

the performance of his or her duties or the Attorney General has

authorized such disclosure.

B. Laws and Procedures Providing Sanctions for Breaches of the

Confidentiality Laws and Procedures

The Crimes Act 1914

Section 70 of the Crimes Act 1914 provides a penalty of two years

imprisonment for unauthorized disclosure by a Commonwealth officer of

information which the officer has a duty not to disclose.

The Privacy Act 1988

Under section 93 of the Privacy Act 1988, a confider may recover

damages from a confidant in respect of a breach of confidence with

respect to personal information.

The Freedom of Information Act 1982

Section 59 of the Freedom of Information Act 1982 provides that

where an agency makes a decision that documents relating to the

business, commercial or financial affairs of a company are not exempt

documents under section 43 , the company may apply to the

Administrative Appeals Tribunal for a review of that decision.

Section 57 of the Freedom of Information Act 1982 provides that a

person may complain to the Ombudsman concerning any action taken by an

agency in the exercise of its powers and the performance of its

functions under the Act. The Ombudsman cannot overturn the decision of

an agency, although recommendations can be made to that agency or the

responsible minister.

[FR Doc. 97-10401 Filed 4-23-97; 8:45 am]

BILLING CODE 4410-11-M