International Implications of US Antitrust in the George W. Bush Era

Abstract

US antitrust policy under George W. Bush had a measure of continuity with that of earlier administrations. Prosecution of international cartels remained vigorous. The pattern of obtaining cooperation from other jurisdictions and emulation of US leniency strategies was expanded. As cartel prosecution continued, significant new issues arose concerning the scope of US extraterritoriality. A US circuit court diverged from other US courts by holding that even foreign purchasers may prosecute damage claims in US courts. A split in the circuits also developed concerning whether the Alcoa requirement of proof of substantial effect of foreign conduct applies only to the conduct of firms which do not sell their products directly in US commerce, or, as one court of appeal has recently held, applies to all foreign-owned firms who hold their price fixing meetings abroad. As the European Union and other jurisdictions have developed competition enforcement systems comparable to that of the United States, harmonisation has become a major American priority in regard both to procedural and substantive approaches. On the procedural front, the newly formed International Competition Network will be developing “best practices” in regard to merger control and competition advocacy. In regard to substantive policy, many US priorities, such as searching out cartels and major horizontal mergers while relegating distribution practice to lesser status, are being followed in the European Union and elsewhere. But the new US administration has reacted strongly to the European Union’s use of a leverage theory to condemn a proposed GE–Honeywell merger which the Americans found unobjectionable. It is not clear whether the two great powers will simply agree to disagree or the European Union will back away from some of the implications of its ruling. In regard to the issue of victims’ rights, US and EU policy is not coalescing, but US antitrust officials have not pressed the issue. US damage remedies against price fixers grow ever more varied, while DG IV has no plans at all to help cartel victims obtain recompense. In regard to the simmering issue of a WTO competition code, the United States has gained at least a postponement for a year or two, and the European Union has been stripping down its proposals to a relatively unobjectionable few.