1995 Department of Justice and Federal Trade Commission Antitrust Enforcement Guidelines for International Operations

• Pages: 293-335

293

1995 DEPARTMENT OF JUSTICE AND FEDERAL

TRADE COMMISSION ANTITRUST

ENFORCEMENT GUIDELINES FOR

INTERNATIONAL OPERATIONS

1. Introduction

For more than a century, the U.S. antitrust laws have stood as the

ultimate protector of the competitive process that underlies our free

market economy. Through this process, which enhances consumer

choice and promotes competitive prices, society as a whole benefits from

the best possible allocation of resources.

Although the federal antitrust laws have always applied to foreign

commerce, that application is particularly important today. Throughout

the world, the importance of antitrust law as a means to ensure open and

free markets, protect consumers, and prevent conduct that impedes

competition is becoming more apparent. The Department of Justice

(“the Department”) and the Federal Trade Commission (“the

Commission” or “FTC”) (when referred to collectively, “the Agencies”),

as the federal agencies charged with the responsibility of enforcing the

antitrust laws, thus have made it a high priority to enforce the antitrust

laws with respect to international operations and to cooperate wherever

appropriate with foreign authorities regarding such enforcement. In

furtherance of this priority, the Agencies have revised and updated the

Department’s 1988 Antitrust Enforcement Guidelines for International

Operations, which are hereby withdrawn.1

1. The U.S. DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION

ANTITRUST GUIDELINES FOR THE LICENSING OF INTELLECTUAL PROPERTY

(1995), the U.S. DEPARTMENT OF JUSTICE AND FEDERAL TRADE

COMMISSION HORIZONTAL MERGER GUIDELINES (1992), and the

STATEMENTS OF ANTITRUST ENFORCEMENT POLICY AND ANALYTICAL

PRINCIPLES RELATING TO HEALTH CARE AND ANTITRUST, Jointly Issued by

the U.S. Department of Justice and Federal Trade Commission (1994), are

not qualified, modified, or otherwise amended by the issuance of these

Guidelines.

294 HANDBOOK OF U.S. ANTITRUST SOURCES

The 1995 Antitrust Enforcement Guidelines for International

Operations (hereinafter “Guidelines”) are intended to provide antitrust

guidance to businesses engaged in international operations on questions

that relate specifically to the Agencies’ international enforcement

policy.2 They do not, therefore, provide a complete statement of the

Agencies’ general enforcement policies. The topics covered include the

Agencies’ subject matter jurisdiction over conduct and entities outside

the United States and the considerations, issues, policies, and processes

that govern their decision to exercise that jurisdiction; comity; mutual

assistance in international antitrust enforcement; and the effects of

foreign governmental involvement on the antitrust liability of private

entities. In addition, the Guidelines discuss the relationship between

antitrust and international trade initiatives. Finally, to illustrate how

these principles may operate in certain contexts, the Guidelines include a

number of examples.

As is the case with all guidelines, users should rely on qualified

counsel to assist them in evaluating the antitrust risk associated with any

contemplated transaction or activity. No set of guidelines can possibly

indicate how the Agencies will assess the particular facts of every case.

Persons seeking more specific advance statements of enforcement

intentions with respect to the matters treated in these Guidelines should

use the Department’s Business Review procedure,3 the Commission’s

Advisory Opinion procedure,4 or one of the more specific procedures

described below for particular types of transactions.

2. Antitrust Laws Enforced by the Agencies

Foreign commerce cases can involve almost any provision of the

antitrust laws. The Agencies do not discriminate in the enforcement of

the antitrust laws on the basis of the nationality of the parties. Nor do the

Agencies employ their statutory authority to further non-antitrust goals.

Once jurisdictional requirements, comity, and doctrines of foreign

governmental involvement have been considered and satisfied, the same

substantive rules apply to all cases.

2. Readers should separately evaluate the risk of private litigation by

competitors, consumers and suppliers, as well as the risk of enforcement by

state prosecutors under state and federal antitrust laws.

3. 28 C.F.R. § 50.6 (1994).

4. 16 C.F.R. §§ 1.1-1.4 (1994).

1995 ANTITRUST ENFORCEMENT GUIDELINES FOR INTERNATIONAL OPERATIONS 295

The following is a brief summary of the laws enforced by the

Agencies that are likely to have the greatest significance for international

transactions.

2.1 Sherman Act

Section 1 of the Sherman Act, 15 U.S.C. § 1, sets forth the basic

antitrust prohibition against contracts, combinations, and conspiracies “in

restraint of trade or commerce among the several States or with foreign

nations.” Section 2 of the Act, 15 U.S.C. § 2, prohibits monopolization,

attempts to monopolize, and conspiracies to monopolize “any part of

trade or commerce among the several States or with foreign nations.”

Section 6a of the Sherman Act, 15 U.S.C. § 6a, defines the jurisdictional

reach of the Act with respect to non-import foreign commerce.

Violations of the Sherman Act may be prosecuted as civil or criminal

offenses. Conduct that the Department prosecutes criminally is limited

to traditional per se offenses of the law, which typically involve price-

fixing, customer allocation, bid-rigging or other cartel activities that

would also be violations of the law in many countries. Criminal

violations of the Act are punishable by fines and imprisonment. The

Sherman Act provides that corporate defendants may be fined up to $10

million, other defendants may be fined up to $350,000, and individuals

may be sentenced to up to 3 years imprisonment.5 The Department has

sole responsibility for the criminal enforcement of the Sherman Act. In a

civil proceeding, the Department may obtain injunctive relief against

prohibited practices. It may also obtain treble damages if the U.S.

government is the purchaser of affected goods or services.6 Private

plaintiffs may also obtain injunctive and treble damage relief for

violations of the Sherman Act.7 Before the Commission, conduct that

violates the Sherman Act may be challenged pursuant to the

Commission’s power under Section 5 of the Federal Trade Commission

Act, described below.

5. Defendants may be fined up to twice the gross pecuniary gain or loss

caused by their offense in lieu of the Sherman Act fines, pursuant to 18

U.S.C. § 3571(d) (1988 & Supp. 1993). In addition, the U.S. Sentencing

Commission Guidelines provide further information about possible

criminal sanctions for individual antitrust defendants in § 2R1.1 and for

organizational defendants in Chapter 8.

6. See 15 U.S.C. § 4 (1988) (injunctive relief); 15 U.S.C. § 15(a) (1988 &

Supp. 1993) (damages).

7. See 15 U.S.C. §§ 16, 26 (1988).