Antitrust seems like a brief for the uselessness of international law. The imperative for international cooperation is obvious. (1) Lowered trade barriers increase the relative significance of private restraints on competition, (2) even as heightened international trade undermines the ability of individual nations to achieve antitrust objectives by themselves. (3) Meanwhile, the phenomenal proliferation of antitrust codes (4) demonstrates not only the possibility of a new consensus on antitrust, but also the need for it, given the huge potential for regulatory overlap. Numerous antitrust regimes impose inconsistent requirements and substantial compliance costs, especially for the growing number of mergers requiring approval in multiple jurisdictions. (5) Particularly given the highly active antitrust authorities in the United States and the European Union, some think that "anti-trust has been an accident waiting to happen in transatlantic relations." (6) Tempers in fact were sorely tested in the Boeing/McDonnell Douglas merger (7) and the attempted GE/Honeywell merger. (8) Small wonder, then, that the obsession with adapting American antitrust to contemporary economics has taken a backseat to rationalizing the more discrepant impulses of international antitrust--the focus, as evidenced in weekly headlines, being more on Brussels, Paris, or Geneva than Chicago. (9)
The question for many, in consequence, is why greater international cooperation has not transpired, or if it ever can; (10) the predicate, in any case, is that international law has failed to provide any sort of solution. Justice Holmes once suggested that U.S. antitrust legislation was limited by international principles, (11) but the Permanent Court of International Justice subsequently professed ignorance as to what those principles were. (12) There has been little progress since. Attempts to establish a comprehensive international antitrust regime have repeatedly failed, and many believe they will continue to do so. (13)
Customary international law (14) (or its kissing cousin, comity (15)) has been left to fill the breach, without much effect. For one, international law objections to U.S. extraterritoriality have faded as more and more nations assert like authority themselves, and cooperate with the United States either informally or through bilateral agreements. (16) Meanwhile, attempts by U.S. courts to practice jurisdictional self-restraint--in the form of a multifactored reasonableness test based substantially on custom (17)--fell off the wagon in Hartford Fire Insurance Co. v. California, (18) in which the Supreme Court held that effects jurisdiction under the Sherman Act should be truncated only where foreign law compelled a defendant's antitrust violation. (19) Hartford Fire relied on a patent misreading of the Restatement (Third) of Foreign Relations, but many contend that the Court's mistakes were venial: customary international law has not yet dictated, and perhaps may never properly dictate, any judicially enforceable restrictions on the exercise of antitrust jurisdiction. (20)
The antitrust experience, indeed, has been cited as a compelling indictment of customary international law in general. (21) The reasonableness test was bottomed substantially on judicial and academic fiat, rather than state practice, thus typifying a methodology that custom's critics find particularly unsavory. To be sure, nations have tried to avoid conflict and coordinate their antitrust affairs, but such practices look like political or regulatory alternatives to custom, (22) and offer little support for the distinctive balancing exercise they are supposed to have adopted. Reasonableness thus illustrates custom's familiar paradox: if the norm is genuinely patterned on what nations do, it verges on redundancy; if, on the other hand, it imposes a higher standard, it is not custom at all, and illegitimately interferes with ostensibly adequate political alternatives. (23)
But such criticisms mistakenly accept the dominant discourse of custom on its own terms. As this Article explains, reasonableness may be unpersuasive, but that does not mean no custom exists--it just means that we have been looking for it in all the wrong places. Critics of antitrust custom, like its advocates, overlook the potential for what I describe as "local international law:" that is, international law that may be limited in the number of adherents, subject matter, and depth, but which is well adapted to application among certain nations and within their municipal legal environment. Local international law thus offers an intermediate alternative to claims for a universal international law, on the one hand, (24) and arguments that would require treaty making or domestic legislation in order to create international obligations, on the other. (25)
Local international law also affords a fresh opportunity to address the awkward relationship between custom and constitutional federalism. Global antitrust is federal in two important senses: first, as more commonly observed, in respecting the function of national differences within the international legal environment; (26) second, in the continuing relevance of the American states to antitrust enforcement even at the international level. (27) Local international law insists on examining the connection between these planes. To take a contemporary example, Microsoft's chief antagonist to date has been the U.S. Department of Justice, (28) but various state attorneys general have played a significant (and arguably disruptive) role at times, (29) and the European Commission's newly expanded interest in Microsoft's software integration practices may wind up influencing both the products it markets outside Europe and pending or future U.S. antitrust proceedings. (30) The solution to the potential conflict, I argue, lies less in quarreling over the administration of already articulated custom in a federal system, and more in a nuanced understanding of what custom demands in the first place.
Part I of this Article orients the discussion by briefly describing the emergence of international antitrust, including the turn to regulatory comity among antitrust authorities as a means of resolving potential conflicts. As this Part explains, both existing bilateral agreements and the failure to date of multilateral efforts reflect certain recurring limits to cooperation, including a vestigial respect for sovereign authority over antitrust enforcement and the commonality of interests among a limited number of nations.
Part II then traces the rise and fall of the reasonableness standard, culminating in Hartford Fire, before examining whether that standard has ever corresponded with international law. The reasonableness standard not only lacks evidence that would satisfy conventional criteria for customary international law--a point I try not to belabor--but also unnecessarily invites criticism through three missteps that characterize much of customary law discourse. First, reasonableness states a theory of near-universal application, without regard to potential distinctions among subject matter or constituents. Second, it conflates evidence of norms with their realization, and fails to account for how the two might be mediated. Third, and finally, it attempts the undifferentiated application of the norm to all agents of antitrust, notwithstanding substantial evidence that the law is precisely to the contrary.
Part III builds on these criticisms by developing a general methodology for local international law. Localizing international law is an analytic process for evaluating proposed norms of custom, one beginning with the norm's potential application to particular members and subject matter within the international community, and its articulation, adaptation, and enforcement in domestic circumstances. Such law may be local in any of three senses: (1) it exists among a subset of the international community, with respect to a particular subject matter; (2) it is enforced as an interpretive canon with respect to national law, and defers to the national understanding of custom in marginal cases and with respect to emerging custom; or (3) its norms require careful distinction among the domestic parties potentially subject to its strictures.
Part IV applies this methodology to antitrust, in keeping with the methodology's emphasis on grounding international law theory in context. Against the great weight of contemporary analysis, I conclude that there is a local international law of antitrust, even after Hartford Fire. Antitrust comity consists of a set of procedural principles, potentially binding only members of the Organisation for Economic Cooperation and Development (OECD), that require national antitrust authorities to consider the legitimate interests of other adherents in enforcing municipal antitrust laws. This doctrine of comity is enforceable by American courts against U.S. antitrust authorities, albeit in highly limited circumstances.
Antitrust comity also pertains, however, to the activities of private and state attorneys general in international matters. (31) Each type of action has a significant effect on the nation's ability to comply with its international obligations, and either may warrant legislative or judicial intervention. But the local law of antitrust comity requires distinguishing the two cases. While private litigants are at best penumbral participants in norms arising from intergovernmental relations, state attorneys general are constitutionally restricted in their ability to attend to international duties incumbent on the United States as a whole. The best solution, I contend, is to simulate antitrust comity on the local level by developing a cooperative federal-state protocol that respects domestic and global conceptions of sovereignty.
Several caveats are in order. For one, although this Article describes a new...