Some aspects of the extraterritorial reach of the American antitrust laws

183 Pages·1970·6.69 MB·English

by  Hendrik Zwarensteyn J.D.

Some aspects
of the extraterritorial
reach of the American
antitrust laws
by
Hendrik Zwarensteyn, J.D., Ph.D.
Professor of Business Law
Michigan State University
Springer Science+Business Media, B.V. 1970
ISBN 978-90-268-0442-7 ISBN 978-94-017-4467-6 (eBook)
DOI 10.1007/978-94-017-4467-6
International Standard Book Number 90 268 0442 3
Library of Congress Catalog Card Number 72-130210
© 1970 Springer Science+Business Media Dordrecht
Originally published by Uitgeversmaatschappij AE. E. Kluwer, Deventer in 1970
TABLE OF CONTENTS
INTRODUCTION Page
1. General: The various aspects of foreign commerce
2. The substantive provisions
(a) Sherman Act 3
(b) Clayton Act 4
(c) Robinson-Patman Act 4
3. The extraterritorial reach
(a) legislative reach 6
(b) judicial reach 6
4. Possible approaches 6
5. Identification of the problems 7
6. Methodology 8
(a) historical and philosophical bases 8
(b) remedial and procedural aspects 9
(c) special character of antitrust law 9
(d) jurisdictional aspects 10
( e) extraterritorial reach 10
(f) limitations 11
7. Summary 12
CHAPTER I
HISTORICAL AND PHILOSOPHICAL SOURCES OF THE AMERICAN ANTITRUST LAWS
1. Historical sources 14
(a) The early period 14
(1) The Schoohnaster case 15
(2) Dyer's case 16
(3) Case of Monopolies 16
(4) Statute of Monopolies 17
(5) Mitchell v Reynolds 18
(6) Nordenfelt v Maxim Nordenfelt Guns & Ammunition 21
(b) The period from 1890-1955 22
(1) The Sherman Act 22
(2) U.S. v Trans-Missouri Freight Association 23
(3) Standard Oil Co of New Jersey v U.s. 24
(4) The gaps in the existing law 25
(5) The Clayton Act and subsequent acts 25
(6) The need to study the existing laws 26
(c) The Report of the Attorney General's National Committee 26
(1) General aspects 26
(2) The need for coordination with other agencies 28
(3) A new ceiling for violations 29
(4) A summary evaluation 29
(d) The development since 1955 31
(1) The 'Supplement' to the Report of the Attorney General's
National Committee 31
(2) Personal jurisdiction 31
(3) Subject matter jurisdiction 34
(4) Subpoenas duces tecum 35
2. Philosophical sources 36
(a) General 36
(b) Activities covered by the reach of the law 42
(c) The positive and the negative aspects of the antitrust laws 42
CHAPTER II
REMEDIAL AND OTHER PROCEDURAL ASPECTS OF THE AMERICAN ANTITRUST
LAWS
1. General 44
(a) The doctrinal approach 44
(b) The functional approach 44
(1) the institutional approach 45
(2) the litigation approach 45
(3) the remedial approach 45
2. The remedial aspects of antitrust enforcement 46
(a) The importance of the remedial approach 46
(b) The arbitrariness of the classification of the remedies 47
(1) classification of civil remedies, the criterion 47
(2) classification of criminal remedies, the criterion 47
(3) classification of regulatory remedies, the criterion 47
3. Civil remedies 48
(a) Which courts have jurisdiction 49
(b) Who are entitled to instigate legal proceedings 49
(c) Which actions or remedies are available 49
(1) treble and actual damages 50
(2) injunction 50
4. Criminal remedies 51
(a) Which actions or remedies are available 51
(1) fmes 51
(2) forfeit of money 53
(3) imprisonment 53
(4) forfeiture of property 53
5. Regulatory remedies 54
(a) Which actions or remedies are available 54
(1) dissolution, divestiture and divorcement 55
(2) the Department of Justice consent judgment and decree 56
(3) the Federal Trade Commission stipulation 57
(4) the Federal Trade Commission 'administrative treatment' 58
(5) the Federal Trade Commission consent order 59
(6) the cease and desist order 59
(7) advance clearance by the Federal Trade Commission 60
(8) the Federal Trade Commission trade practice conference 61
6. Some other procedural aspects of antitrust enforcement 63
(a) The plea of nolo contendere 63
(b) The impact of recently passed legislation 64
(1) the revised Rules of Practice 64
(2) the Antitrust Civil Process Act 64
(c) The cost 65
(d) The time element 65
(e) The discovery procedure 65
CHAPTER III
THE SPECIAL CHARACTER OF THE AMERICAN ANTITRUST LAWS
l. General 67
2. Concepts and semantics 67
3. The purpose, nature and functions of the antitrust laws 69
(a) General 69
(b) The purpose of the American antitrust laws 70
(c) The nature of the antitrust laws 72
(d) The function of the antitrust laws 73
(e) Conclusions 75
4. The consequences 75
(a) The necessity of a coordinated body of law 75
(1) the national level 76
(2) the supra-national level 76
(b) Some illustrations of antitrust enforcement 78
(c) Conclusions 80
5. The implementation 81
(a) Unification of legislation 81
(1) at the national level 81
(2) at the supra-national level 83
(b) Establishment of a special antitrust judiciary 86
(1) at the national level 86
(2) at the supra-national level 88
CHAPTER IV
THE EXTRATERRITORIAL REACH OF THE AMERICAN ANTITRUST LAWS
JURISDICTIONAL ASPECTS
1. General 93
2. The right to determine what shall constitute reprehensible conduct 94
(a) The right to legislate 94
(b) The right to adjudicate 99
(1 ) general 99
(2) the need for treaties 102
(3) the right to adjudicate 103
3. The subject of the law enforcement 104
(a) Jurisdiction in personam over natural persons 104
(b) Jurisdiction in personam over legal entities 104
(c) Jurisdiction in personam over foundations 108
(d) Jurisdiction in personam over Government owned or controlled
corporations 109
CHAPTER V
THE EXTRATERRITORIAL REACH OF THE AMERICAN ANTITRUST LAWS
REMEDIAL ASPECTS
1. General: the scope of the problem 112
2. The present form and extent of the extraterritorial reach 113
(a) Jurisdiction in personam 113
(1) natural persons 114
(2) legal entities 114
(b) Jurisdiction over the subject matter 115
(1) civil remedies 116
(2) criminal remedies 118
(3) regulatory remedies 120
3. The legal bases of the extraterritorial reach 121
(a) General: the guidelines followed by the courts 121
(b) The remedies as determinative factors 123
(1) civil remedies 123
(2) criminal remedies 126
(3) regulatory remedies 128
4. The implications of a new categorization of the antitrust laws 130
5. Conclusions 131
(a) The equal application of the law 131
(1) legislatively 131
(2) judicially 131
(b) The requirement of modification with regard to transnational
commercial activities 131
(1) legislatively 131
(2) judicially 132
(a) jurisdiction in personam 132
(b) jurisdiction over the subject matter 132
(c) The jurisdictional competency on the basis of r~medies not
tenable 132
(d) The need to recognize the antitrust laws as a separate area
of the law 133
CHAPTER VI
THE EXTRATERRITORIAL REACH OF THE AMERICAN ANTITRUST LAWS
INTERNATIONAL LAW ASPECTS
1. General 134
2. The concept of locus delicti 134
(a) General 134
(b) The locus delicti in civil actions 137
(c) The locus delicti in regulatory actions 139
(d) The locus delicti in criminal actions 140
3. The concept of territoriality 144
4. The application of the concepts of locus delicti and territory to
jurisdiction 146
(a) Civil jurisdictional aspects 146
(b) Regulatory jurisdictional aspects 147
(c) Criminal jurisdictional aspects 148
5. The extent of the concept of territoriality in criminal prosecutions 150
6. The principles underlying criminal jurisdiction 155
(a) General 155
(b) The Harvard Research in international law 155
(c) A proposed amendment to the Draft Convention 158
7. The concept of international law 159
(a) General 159
(b) Proposed definition 160
8. The international law aspects of the extraterritorial reach 161
CHAPTER VII
CONCLUSIONS
1. General: the dangers of a collision course 163
2. The importance of the historical approach 163
3. The functional aspects of the antitrust laws 164
4. The need to recognize the antitrust laws as a special area of the law 164
5. The implementation 165
(a) Codification 165
(b) A special antitrust judiciary 165
SELECTED REFERENCES 167
TABLE OF CASES 173
SAMENV AT TING 175
INTRODUCTION
General
While there is an abundance of literature dealing with the American antitrust
laws, one can also observe that the application of this area of the law to foreign
commerce is still in an evolutionary stage of development. To some extent this
can be quantiflably explained by pointing out that the rapid rise of the interests
of the American business community in foreign commerce is only a fairly recent
phenomenon.1 This participatory interest reveals a wide spectrum of commercial
activities.
While the traditional concept of foreign commerce was often limited to thinking
in terms of exports and imports, present commercial activities include also such
marketing methods as the establishment of foreign branches or subsidiaries, or
the location of manufacturing, processing, or assembly plants abroad.2 To this
array of arrangements, most of which contemplate a widening of the market
potential, we may add the current merger movement, the conglomerate charac
ter of which has been termed its 'most unique characteristic,.3 Little wonder
that at least one author refers to the application of the 311titrust laws to foreign
commerce as being still somewhat of a 'frontier area of the law'.4 Because of the
rapidly expanding participation of the American business community in interna
tional commerce a gradual evolution of the international dimensions of the
American antitrust laws seems therefore within the realm of justifIed expecta
tions.
Most of the thinking so far can be described as centrifugal in its approach
because of the apparent tendency to focus on the problems of the American
entrepreneur who ventures out into the international business arena. As a result
we find a primary emphasis on the extent to which the American antitrust
1. According to the U.S. DEPARTMENT OF COMMERCE, STATISTICAL AB
STRACT OF THE UNITED STATES, 1968, p. 791, the total of U.S. private invest
ment abroad rose from $ 14,883 million in 1945 to $ 86,235 million in 1966, an
increase of almost 600% over a period of 21 years.
2. cf. NOTE in 1 Case Western Reserve 1. Int1 Law 132, 140 (1969)
3. cf. ANTITRUST DEVELOPMENTS 1955-1968, A SUPPLEMENT TO THE RE
PORT OF THE ATTORNEY GENERAL'S NATIONAL COMMITTEE TO STUDY
THE ANTITRUST LAWS, MARCH 31, 1955, American Bar Association, 1968, p. 83
(hereinafter to be referred to as SUPPLEMENT). For an example of such a merger,
see U.S. v los. Schlitz Brewing Co., 385 US 37,87 S Ct 240 (1966), aff"rrming per
curiam a decision of the Federal Distriot Court of Northern California, 253 F Supp
129, cited in SUPPLEMENT, p. 59
4. cf. FUGATE, W. L., FOREIGN COMMERCE AND THE ANTITRUST LAWS,
Boston, 1958, p. IX