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“Five Eyes” Sign Cooperation Agreement in Competition Matters

Matthew Kirk
Francesco Liberatore
European UnionUnited KingdomUSA September 18 2020

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 UK’s case.

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

  • The Five Eyes will coordinate their enforcement actions, in particular the timing of on-site inspections (so-called dawn raids), in relation to matters affecting two or more of them.
  • Exchange of information. The Five Eyes will be able, and without the prior consent of the parties, to exchange information obtained in the course of an investigation where both competition authorities are investigating the same or related conduct or transaction. The agreement also envisages “model” procedures to be followed, including:
  • The request for information is made in writing, identifies the companies or individuals subject to the investigation or procedure whose identity is available at the time of the request, and describes the subject matter and nature of the investigation or proceedings to which the request relates and the specific legal provisions involved
  • The competition authority receiving the request determines, in consultation with the requesting competition authority, what information in its possession is relevant and may be transmitted

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 applicant’s 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:

  • The agreement does not require each authority to notify each other of the opening of proceedings against the parties to a merger raising serious competition issues, as well as the opening of antitrust investigations, where it may affect both countries. However, in practice, the Five Eyes already do so as a matter of practice.
  • The agreement does not require the use of best efforts to avoid conflicting enforcement actions. An “enhanced” bilateral agreement could allow one authority to request the other to initiate or expand enforcement actions into any antitrust matters that the other is best placed to deal with, similar to the cooperation mechanism already available to the European Commission and the national competition agencies of the EU member states within the EU Competition Network.
  • Another scenario the framework does not cover is the creation of a task force – for example, to investigate a particular activity worldwide – that would pull enforcers from different agencies to work, share information, investigate together and bring cases in tandem globally.

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 firm’s global platform, we are best placed to assist our clients in this regard.


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