Measuring Antitrust Damages in the Presence of Foreign Government Regulation

• Date: 01 June 2019
• Author: Pian Chen,David D’Auria
• DOI: 10.1177/0003603X19844627
• Published date: 01 June 2019
• Subject Matter: Articles

Article

Measuring Antitrust Damages

in the Presence of Foreign

Government Regulation

Pian Chen* and David D’Auria**

Abstract

The U.S. Supreme Court on June 14, 2018, reversed the Second Circuit’s 2016 decision to vacate a

$147 million judgment against two Chinese companies, who allegedly fixed vitamin C prices. The high

court held that courts should give foreign governments’ statements “respectful consideration” but are

not bound by another country’s description of its own laws. Going forward, courts will need to

evaluate a foreign government’s statements when defendants claim a contradiction between U.S. law

and foreign regulations as a defense. When government regulation and private cartelization overlap,

complications arise because the foreign companies may be liable for their anticompetitive conduct that

was beyond the requirement of and might even have influenced foreign government policies. Using two

illustrative cases (In Re Vitamin C Antitrust Litigation and Resco Products v. Bosai Minerals), we analyze the

impact of the price floor and export quotas and propose a new, workable methodology for measuring

antitrust damages attributable to the private cartel in the presence of foreign regulation.

Keywords

antitrust damages, international comity, foreign government regulation, price floor, export quota

I. Introduction

International comity is a widely practiced family of legal prin ciples, based on countries’ mut ual

respect for each other’s laws and governments.

1

Among its many applications, it has been used by

foreign companies to defend their violations of U.S. antitrust laws. For example, the defendants in both

In Re Vitamin C Antitrust Litigation (involving vitamin C imports from China, referred to as the

“vitamin C case” hereafter) and Resco Products, Inc. v. Bosai Minerals Group Co., Ltd., and CMP

*Principal Economist, Monument Economics Group, Arlington, VA, USA

**Research Analyst, Monument Economics Group, Arlington, VA, USA

Corresponding Author:

Pian Chen, Monument Economics Group, 1530 Wilson Blvd, Suite 560, Arlington, VA 22209, USA.

Email: pchen@megconsulting.com

1. For detailed discussion of international comity and its application in American Law, see William S. Dodge, International

Comity in American Law, 115 COLUM.L.REV. 2071–2142 (2015).

The Antitrust Bulletin

2019, Vol. 64(2) 284-292

ªThe Author(s) 2019

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/0003603X19844627

journals.sagepub.com/home/abx