EU’s Reach poses antitrust issues for US firms

31 January 2007 20:06  [Source: ICIS news]

FORT LAUDERDALE, Florida (ICIS news)--The European Union’s (EU) new chemical registration programme may put US companies at greater risk under federal antitrust laws, a top industry specialist said on Wednesday.

 

Steven Russell, senior director for health, products and science policy at the American Chemistry Council, told industry executives that the EU programme for registration, evaluation and authorisation of chemicals (Reach) presents some competing and perhaps conflicting legal obligations for US companies.

 

Reach requires that EU, US and any other companies seeking to register chemical products in Europe must participate in groups called substance information exchange forums (SIEFs) that focus on a single chemical substance. Within those forums, companies are expected to establish consortia to co-operate in compiling information about the substance - health risks, toxicity, test data, controls, etc. - that is to be registered under Reach.

 

However, Russell noted, US antitrust law and parallel European competition regulations prohibit the exchange of information or the making of agreements that are designed to or have the effect of preventing, restricting or distorting competition.

 

While Reach will oblige companies in SIEFs to exchange a broad range of data, Russell urged industry executives to avoid sharing any information on price and customer policies, production, market and distribution plans or production costs, capacities and sales.  He also cautioned against exchanging information related to a company’s future plans for significant production changes.

 

As envisioned, each SIEF consortium will be led by one company, perhaps a large producer of the chemical in question, with other producers also taking part and providing test data and related information. Other companies may seek to join the group later, and that raises another antitrust worry, Russell said.

 

Under antitrust law, members of a group may not discriminate against or exclude other companies, such as other producers, importers or downstream users. However, Reach requirements may put consortia members in the position of selecting or rejecting other companies on the basis of substance criteria, impurity limits or downstream uses of the chemical.

 

Russell, an attorney, said that in general, “you should limit the exchange of information strictly to what is required by [Reach] legislation” and ensure that actions taken by consortia members fall within the limits of US or other antitrust law.

 

Speaking on the second and final day of a council-sponsored conference on Reach compliance, Russell also urged executives to retain trained and experienced consortia managers to navigate conflicting legal requirements.

By: Joe Kamalick
+1 713 525 2653

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