Last Thursday the US Federal Trade Commission and the Department of Justice’s Antitrust Division entered into an “Agreement on Antitrust Cooperation” with the Fiscalía Nacional Económico (FNE), the Republic of Chile’s antitrust agency. These types of agreements have become commonplace in the last decade as US antitrust authorities seek to expand their power and influence globally. Similar agreements exist with the European Union, Canada, Russia, Mexico, and Brazil, among other monopoly governments.
There’s admittedly not much substance to the US-Chile agreement beyond a statement of shared goals:
The US antitrust agencies and the FNE agree that it is in their common interest to cooperate in the detection of anticompetitive practices and the enforcement of their competition laws, and to share information that will facilitate the effective application of those laws and promote better understanding of each other’s competition enforcement policies and activities, to the extent compatible with their respective laws and important interests, and within their reasonably available resources.
There are three things that stand out about this entire exercise. First, this is in effect a collusion agreement between the US and Chilean authorities, which is notable since their shared objective is the criminalization of collusion in the private sector. If two companies entered into an agreement to share information and avoid conflicts, they could be charged, in the US or Chile, with “price fixing” or some variant thereof. So once again we see government authorities banning an activity on the one hand while the other engages in the exact same behavior.
Second, while this agreement may not break much new ground, it is a treaty, regardless of what the FTC and DOJ are labeling it for public consumption. And while I’m on Chilean constitutional expert, I know the US Constitution assigns treaty-making power exclusively to the President and the Senate. The chairman of the FTC and the assistant attorney general for antitrust — the latter a second-tier bureaucrat — do not have the constitutional authority to sign any binding agreements on behalf of the United States. It’s not an academic point. This is yet another instance where the antitrust agencies are acting as completely independent bodies from the constitutional system.
Third, it’s noteworthy that the preamble to the US-Chile agreement expressly states that their agreement is “within the framework of the United States-Chile Free Trade Agreement, signed on June 6, 2003.” This is why many libertarians oppose so-called free trade agreements: They are really a Trojan horse to permit expanded state intervention in the economy. FTC Chairman Jon Leibowitz himself noted that the Chilean agreement is primarily about promoting intergovernmental camaraderie, not peaceful trade among private citizens:
Chile has one of the most advanced antitrust systems in Latin America. They are natural partners for us, and I’m pleased that we can formalize and strengthen the great relationship we have with them.
Chile’s “advanced antitrust system” had its roots in the 1973 military coup that overthrew a Marxist government in favor of Augusto Pinochet’s military dictatorship. Unlike the US FTC, the Chileans actually do separate the investigation/prosecution and adjudication functions. The FNE is the country’s economic prosecutor; antitrust cases are tried by a separate body composed of two economists and three lawyers acting under the supervision of Chile’s Supreme Court. In contrast, the FTC is composed entirely of lawyers, cases are prosecuted and tried by their employees, and judicial oversight is minimal.
Still, Leibowitz is correct in saying the FNE are his “natural partners.” The FNE admits to taking on many aspects of the US-designed antitrust system, including a heavy reliance on “price fixing” fines and cutting secret “amnesty” deals to ensure those fines keep coming. This new agreement will likely bring Chile further in line with the Leibowitzian vision of universal antitrust enforcement.