Document Type

Article

Disciplines

International Law

Abstract

In deciding F. Hoffinan-LaRoche, Ltd. v. Empagran,' the Supreme Court clarified the extraterritorial limits of U.S. antitrust jurisdiction. Eschewing its own broader jurisdictional interpretation in Hartford Fire Insurance Co. v. California,2 as well as those of the Second and D.C. Circuits, the Court opted for a narrower interpretation giving considerable weight to international comity considerations. This note looks to define the current extraterritorial limits of U.S. antitrust law as outlined by the Court's recent decision in Empagran. First, the note will briefly explore the reasoning behind extraterritorial antitrust jurisdiction as well as the Foreign Trade and Antitrust Improvements Act ("FTAIA") and its mechanisms for limiting the ambit of the Sherman Act.3 The note will then review relevant case law leading up to and including the Court's decision in Empagran. Particular attention will be devoted to the arguments made by economists and foreign governments in Amicus Curiae briefs filed before the Court in Empagran.

In Empagran, the Court declined to exercise jurisdiction over the claims of foreign vitamin companies against foreign vitamin manufacturers. In reaching its decision, the Court assumed the adverse foreign effect of the vitamin cartel's behavior was independent of its adverse domestic effect." Taking the Court's assumption at face value, Empagran seems to have been decided quite reasonably, since the principles of international law, comity, and mutual respect among independent sovereigns dictate jurisdictional restraint in such circumstances. Foreign antitrust regimes, and the Department of Justice ("DOJ"), seem to favor cooperative amnesty programs where those engaging in anticompetitive behavior can turn themselves in, making prosecution of hardcore international cartels more probable and less costly.' By tightening the jurisdictional requirements for foreign plaintiffs, Empagran has promoted the use of amnesty programs.

Comity considerations aside, the Empagran Court seems to ignore economic logic. Scholars and economists alike have argued that in today's global economy, especially given the scale of U.S. commerce the Court's approach ignores: (1) that fact that adverse foreign effects cannot be separated from adverse domestic effects when dealing with global cartels, and (2) that the current antitrust enforcement mechanisms in place globally are woefully under-deterrent. Unless there is greater international cohesion amongst antitrust enforcement regimes and legislatures, comity considerations will inevitably collide with deterrence based antitrust sanctions.

Conflict seems inherent in creating an antitrust regime. The United States has what is considered the world's most advanced and extensive antitrust regime,8 yet many American antitrust policies lie in direct conflict with the laws of foreign nations. In deciding where to draw jurisdictional boundaries, the Court needed to consider more than the economic policies at play. Instead, the traditions of international law and comity considerations dictated the scenarios in which U.S. antitrust jurisdiction would "reasonably" defer to its foreign counterparts, inferior deterrence notwithstanding.

Embodying the clash between economic theories and the realities of international diplomacy, foreign governments and economists advance conflicting views of what courts should take into account when deciding whether or not to exercise U.S. antitrust laws abroad. Economists insist that the key feature of antitrust law is deterrence and as such, U.S. antitrust jurisdiction should be exercised broadly so as to maximize punishment for anticompetitive behavior. Conversely, foreign governments assert that comity considerations, cooperation, and international law mandate a limited exercise of extraterritorial antitrust jurisdiction.

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