Sitesh Bhojani, Barrister & Consultant (former ACCC Commissioner)

1. CUTS International & Vietnam Competition Administration Department (VCAD), Ministry of Trade, Vietnam Present: TRAINING WORKSHOP On M&AS EVALUATION SKILLS FOR COMPETITION AUTHORITY OFFICIALS Sitesh Bhojani, Barrister & Consultant (former ACCC Commissioner) CatBa Island, Vietnam – 13 & 14 August 2005

2. Presentation Summary • The context – elements of Australian merger contravention • what type of evidence will be needed in investigating a merger case that is likely to cause competitive concerns; • the sources/where to get the necessary evidence; • the skills required/tips to acquire such evidence; • the tips to test the accuracy of the evidence; • how to organise the evidence in a suitable manner for use in litigation if required, etc.

3. The Context – Elements of an Australian Merger Contravention • A Corporation; • shall not directly or indirectly acquire shares; • In the capital of a body corporate; If – • the acquisition would have the effect; • or be likely to have the effect; • of substantially lessening competition in a market

4. Types of Evidence

5. Types of Evidence continued… • MARKET PLACE EVIDENCE • Real Evidence • Documentary Evidence • Witnesses – market participants as to actual behaviour or perception • Survey Evidence • EXPERT ECONOMIC EVIDENCE

6. Case Examples… • Trade Practices Commission v Arnotts Ltd & Others (1989) ATPR 40-979 and (1990) ATPR 41-010; (1990) ATPR 41-161 – For market definition purposes:Real evidence – Biscuits, snack foods. “Survey evidence” – to establish consumer habits. “Perception Evidence”. • Australian Gas Light Co. v ACCC (2003) ATPR 41-956 and (2003) ATPR 41-966 – Documentary Evidence “strategic business documents”. Reliance principally on Expert Evidence

7. Case Examples continued… • Trade Practices Commission v Australia Meat Holdings Pty Ltd & Others (1988) ATPR 40-876 – Market Participants’ Evidence and Expert Economic Evidence. • Trade Practices Commission v Rank Commercial Ltd & Others (1994) ATPR 41-324 and (1994) ATPR 41-331 – Market participants’ (independent grocery retailers’) evidence

8. Sources of Evidence

9. Potential Sources of Evidence… • Target of takeover – “feasibility studies” or “Board Papers” or other documents; • Industry Participants (especially those likely to be adversely affected by merger) including suppliers, customers, competitors, industry associations; • Government agency reports / industry studies • Experts especially Economists local or international ; • Overseas Competition Regulators or industry participants or local customs officials – evidence as to imports as a constraint

10. Skills to Acquire Evidence

11. 7 Key Evidence Gathering Skills… • Analytical Ability • Penetrating Questioning Ability • High Level Communication skills – both oral and written • Organizational Ability • Ability to distill (extract) key issues from large volume of complex material • Solid understanding of Competition law and/or Economics. • People Skills – Building Rapport with Witnesses

12. Testing Accuracy of Evidence

13. Case Examples Testing Evidence… • Evidence Provided Voluntarily by Companies involved compared with evidence provided by them under compulsion of law. • Theoretical Economic Evidence compared to market place investigation and evidence. • Important to remember markets are Dynamic not Static – so a “with or without the merger test” analysis requires consideration of real or likely (not hypothetical /fanciful) developments eg Import competition; merger between others

14. Organising Evidence for Litigation

15. Evidence for Litigation… • In Australia, evidence for litigation in the Courts is at the highest level of integrity – because it must pass the laws of evidence applied by the courts and also withstand vigorous cross-examination and scrutiny by the defence lawyers!

16. Evidence in Litigation… • Regardless of the use of the evidence obtained in an investigation (eg To write a Report; To make public statements; To settle a matter administratively; or to engage in litigation) – the evidence must be right (that is, accurate, complete and reliable)

17. Evidence in Litigation… • So, the investigator who learns and applies the skills of an investigator who intends his/her evidence to be used before an authority that will rigorously test the evidence (for example, a Court) – is unlikely to find himself/herself in the embarrassing position of getting it all wrong!

18. Evidence in Litigation… Organising evidence for use in litigation is a combination of: • Understanding the elements of the offence or contravention and organising the evidence accordingly (for example, evidence on market definition; evidence about the competition assessment / effect). AND • Managing the different types of evidence to be introduced (Real evidence, Documentary evidence, Testimony from people (non -experts and expert Economists – who usually go at the end)

19. In Conclusion … Key “Do’s & Don’ts” X

20. Don’t… • Rely just on voluntary co-operation from parties involved in the merger when seeking evidence; • Substitute assurances or theoretical logic (expert or otherwise) for market place inquires when conducting investigations; • Allow merger parties to divide and conquer a Competition authority (Divide a Competition Authority’s – Commissioners / Executive decision makers from [investigation] staff)!

21. Don’t… • Delay in approaching market place witnesses – they can be frightened by big market players and pressured into not giving evidence to competition authorities; • Try to win cases just on theoretical expert (economic) evidence – it may sound good but is unlikely to withstand rigorous practical scrutiny.

22. Do… • Engage a team of lawyers and economists to provide guidance and assistance; • Conduct market place inquires; • Use Statutory powers to get evidence; • Remember markets are dynamic – so consider other likely developments without the merger;…

23. Do… • Have the infrastructure and staff with the skills and confidence to move quickly; • Contact your international colleagues; • Prevent a merger of concern from happening (eg get an injunction, or use cease and desist powers) rather than relying on divestiture after the event. It’s impossible to turn an omlette back into 2 eggs again!!!

24. Thank You for your Attention! The End.