Why Antitrust Practitioners Should be Interested in Espionage – Lexology

The Five Eyes Alliance has its origins in cooperation between US and UK intelligence agencies during the Second World War. It solidified into the secret relationship between the intelligence agencies of Australia, Canada, New Zealand, UK and US during the Cold War. Its soubriquet Five Eyes came from the protective marking on intelligence material shared between the five allies AUS/CAN/NZ/UK/US EYES ONLY. The alliance remained in the shadows for decades details of some of its programmes coming to public prominence in the revelations by Edward Snowden in 2013.

Increasingly, the Five Eyes has become a more public arrangement. In June this year, Five Country Ministerial (FCM) meetings were held between Finance, Foreign and Home Security Ministers. In the past couple of years, the Five Eyes have adopted joint positions on a range of issues, from encryption in internet platforms, rare mineral supply, resilience in critical national infrastructure, the implications of COVID-19 for domestic security, economic recovery, and the situation in the Indo-Pacific region. Most recently, Five Eyes Anti-Trust Regulators have agreed protocols on information sharing, described by my colleague Francesco Liberatore below. This is particularly intriguing, as it is the furthest departure of Five Eyes activity from its core intelligence sharing and national security rationale.

So where is Five Eyes cooperation going? Clearly, it is developing and extending always on a nation state cooperation basis. The five countries differ in many ways, but share a common law underpinning, and a similar rationale for regulatory intervention. With over 460 million people and three G7 countries, the Five Eyes are a potentially significant economic grouping, as well as military/security. Given the highly international nature of the new economy, promoting cooperation between competition regulators makes perfect sense. Is it a first step in an emerging economic cooperation arrangement? Time will tell, but if it does the Five Eyes will have grown out of the murky world of intelligence cooperation into a major economic policy force.

Five Eyes Sign Cooperation Agreement in Competition Matters

Last week, the US Department of Justice, the US Federal Trade Commission, the UK Competition and Markets Authority, the Canadian Competition Bureau, the Australian Competition and Consumer Commission and the New Zealand Commerce Commission (the so-called Five Eyes intelligence alliance) signed a competition enforcement framework agreement.

The agreement aims to strengthen cooperation between them and enable the exchange of information on antitrust matters. The most important feature of this agreement is that it will allow the Five Eyes to exchange certain confidential information without having to obtain the prior written consent of the parties under investigation. This level of cooperation is already possible within the EU, but it is the first with competition authorities of countries outside the EU, or soon to be outside of the EU, as in the UKs case.

The main provisions of the new cooperation agreement are summarised below:

The agreement also allows facilitating voluntary witness interviews, and some suspect it might potentially also open the door for foreign enforcers seeking to interview individuals extradited to the US.

In all other instances, the Five Eyes will only be able to exchange any information obtained in the course of an investigation, provided they obtain prior waiver or written consent from the parties who provided such information. When such information contains personal data, this personal data may only be transmitted when the authorities making and receiving the request, respectively, are investigating the same or related conduct or transaction, and subject to the applicable data protection rules.

However, the Five Eyes will still not be permitted to discuss, request or transmit legally privileged information, nor will they be permitted to discuss or exchange information received under their respective leniency or settlement procedures, unless they obtain the leniency applicants prior written consent.

The agreement does not cover some recurrent issues in international competition law enforcement, but it leaves the door open for enhanced bilateral cooperation agreements. These enhanced bilateral agreements could, for example, bridge the following enforcement cooperation gaps:

Nevertheless, the agreement is intended to eliminate a problem enforcers face when they all run in different directions in pursuing investigations against the same company. This problem is particularly acute in digital markets, where conduct or transactions are inherently global; and requiring a company to change its conduct or merger in one country will likely have implications in other countries in which it is active.

Companies should take account of the implications of this agreement on their compliance programmes, dawn raid manuals, merger control filings and remedies discussions, as well as leniency and settlement applications, whenever the conduct or transaction in question may have effects in two or more of the Five Eyes countries. With our firms global platform, we are best placed to assist our clients in this regard.

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Why Antitrust Practitioners Should be Interested in Espionage - Lexology