Competition body investigates US group over possible cartel activity

The Competition Authority has conducted an investigation into US companies that may operate cartels outside the US and remains concerned about one such group of companies.

The authority's cartels division has investigated associations and member companies that are listed with the US Federal Trade Commission (FTC).

Under the Webb-Pomerene Act in the US, domestic companies that are registered with the FTC are explicitly allowed to engage in or organise cartels outside the US (export cartels).

Registration with the FTC protects the companies from the US authorities, who are vigorous in prosecuting cartels in the US.

In 2003, the Competition Authority opened an investigation into whether 11 Webb-Pomerene associations and their members were engaging in cartel activities that were having an effect in Ireland.

Among the associations that have removed their registration from the FTC in recent years are the Motion Picture Association and the Paperboard Export Association of the United States. Among the member companies of the latter is Smurfit-Stone Container Corporation.

The motion picture association includes such well known names as Buena Vista International, TriStar Film Distributors, and Twentieth Century Fox International.

Registration with the FTC does not in itself mean the association or all of its members are involved in cartel activities outside the US. Nor does the registration involve identifying any area or areas outside of the US with which the registration should be associated.

Mr Terry Calvani, director of the cartels division of the Competition Authority, would not identify the one association with which the authority still has concerns.

The others identified by the authority have since either withdrawn from the FTC registrar, or have given commitments to the EU or the Irish authoritiesthat they are not involved in cartel activities in the relevant area.

"The US is not the only jurisdiction that has this sort of legislation but we decided to begin our investigation with the US. We will now look at other jurisdictions," said Mr Calvani, although he would not say which jurisdictions.

He said this sort of "beggar my neighbour" legislation was "really inappropriate" and the authority was happy to be engaged in probing it.

The South African government is currently taking a case against one registered US association, alleging cartel activities.

Mr Calvani said he did not believe Irish law covered Irish companies involved in export cartels.