Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

As a federal nation, the United States are governed by a two-tiered system of State and Federal Governments in designated, mostly separate spheres. The Federal Constitution grants some powers to the federal government, but any powers not specifically granted are reserved to the states. The Federal Government is entitled to regulate and control interstate and international commerce, but not intra-s …

Context

As a federal nation, the United States are governed by a two-tiered system of State and Federal Governments in designated, mostly separate spheres. The Federal Constitution grants some powers to the federal government, but any powers not specifically granted are reserved to the states. The Federal Government is entitled to regulate and control interstate and international commerce, but not intra-state commerce. Thus, there are both Federal and State antitrust laws; however, since most state antitrust laws imitate the Federal laws, only the latter will be discussed.

Three principal Federal statutes govern competition in the United States. The Sherman Act covers anticompetitive agreements and monopolies. The Clayton Act deals with mergers, price discrimination, and certain restrictive practices. Lastly, the Federal Trade Commission Act (FTCA) sets up the Federal Trade Commission (FTC) and broadly prohibits unfair methods of competition.

Toward the end of the last century, the proliferation of price-fixing cartels and large trusts established to monopolize markets led to the adoption of the Sherman Act in 1890. Section 1 of the Sherman Act (15 U.S.C. § 1) prohibits contracts, combinations and conspiracies that unreasonably restrain trade. It has been used to strike down horizontal and vertical price-fixing, market allocation, group boycotts, exclusive dealing agreements and tying arrangements. Section 2 of the Sherman Act (15 U.S.C § 2) makes it unlawful “to monopolize,” and this standard has been deemed to require that the defendant willfully acquire or maintain its monopoly power. Thus, while the violations set forth in Section 1 of the Sherman Act require coordinated activity, Section 2 stretches to unilateral activity.

In response to concerns that court interpretations had deprived the Sherman Act of its strength, the Clayton Act was enacted in 1914. Although the Sherman Act had already been used to challenge tying arrangements under its general prohibition against agreements that unreasonably restrain trade, Section 3 of the Clayton Act explicitly bars tying and exclusive dealing arrangements (15 U.S.C. §14).

The 1936 Robinson-Patman Act amended Section 2 of the Clayton Act in the area of price discrimination. The amendments made it unlawful for a seller to vary prices in sales to purchasers of goods of like grade and quality when substantial competitive injury could result. The legislative history of the amendments reveals congressional concern that dominant sellers could misuse predatory price differentials to drive smaller competitors from the market (15 U.S.C. § 13).

The 1914 Federal Trade Commission Act (FTCA) established the Federal Trade Commission and empowered it to enforce both the FTCA and the Clayton Act (15 U.S.C. §§ 41-58). The FTCA is principally enforced through administrative proceedings before the FTC, though FTC cease and desist orders are subject to review in federal district court. The FTCA is a purely civil statute, and may not be relied on by private litigants. Suits pursuant to the FTCA may only lead to prospective equitable relief, not penalties or money damages.

Section 5 of the FTCA has been treated as essentially coterminous with the Sherman and Clayton Acts and thus can be used to challenge actions including monopolization, price-fixing, exclusive dealing, and anticompetitive group boycotts. The Supreme Court has also recognized that Section 5 can reach behavior that falls into the gaps of the antitrust framework and thus it has been used to strike down practices that fall outside the language of other statutes (15 U.S.C. § 45).

Congressional authority to enact Federal antitrust laws derives from the Commerce Clause, which allows it to regulate conduct involving interstate or foreign trade, as opposed to wholly intrastate conduct. The Sherman Act has been construed broadly to apply to any commerce that Congress is entitled to regulate. Even conduct that occurs wholly within a single state may be treated as interstate and subject to the Sherman Act if the conduct has a substantial effect upon interstate commerce (Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 1976). However, where the business that is the subject of the antitrust violation is almost entirely intrastate, the Sherman Act does not apply (YellowCab Co. v. Cab Employers, Automotive & Warehousemen Local No 881, 457 F.2d 1032 (9th Cir. 1972)).

In this regard, the scope of the Clayton Act appears more restrictive than that of the Sherman Act. Thus, in suits for price discrimination, the Supreme Court has held that the commerce requirement is satisfied only where the goods that are the subject of the transaction cross State lines in moving from seller to buyer (Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 (1974)). In addition to this more limited reading of the commerce requirement, price discrimination and other claims under Section 3 of the Clayton Act are restricted to commodities and cannot be based on discrimination in the sale of services or other intangible items.

With regard to foreign commerce, the antitrust laws explicitly apply to “commerce... with foreign nations” and thus acts that take place within the US involving foreign commerce are clearly covered (15 U.S.C. § 3). Under the Foreign Trade Antitrust Improvements Act of 1982, 15 U.S.C. § 6a, a distinction is made between import trade flowing into the US and export trade flowing out of the US or trade occurring wholly abroad. Jurisdiction may be asserted over export trade or trade occurring wholly abroad only if the defendant's conduct has a “direct, substantial and reasonably foreseeable effect” on US domestic trade or import trade, or on a person engaged in US export trade. In the case of the latter, persons engaged in US export trade bringing an antitrust claim must allege that they personally have suffered an antitrust injury because of the activity (Access Telecom, Inc. v. MCI Telecommunications Corp., 197 F.3d 694 (5th Cir. 1999)).

The scope of the antitrust laws is limited with respect to specified areas of activity. Thus, the fields of insurance, labor activities, agricultural cooperatives, export trade and activities are all to some degree excluded from the coverage of the antitrust laws. These are discussed in turn below.

The 1945 McCarran-Ferguson Act (15 U.S.C. §§ 1011-1015) provides that the “business of insurance” is covered by the Sherman Act only to the extent that such business is not regulated by State law. Since State law broadly regulates insurance matters, most of such business will not be covered by the Sherman Act. The McCarran-Ferguson Act does, nevertheless, provide that agreements to boycott will be covered by the Sherman Act regardless of whether they relate to the business of insurance.

The formation and activities of labor unions are not covered by the antitrust laws pursuant to Section 6 of the Clayton Act (15 U.S.C. § 17). The Supreme Court held that this exemption for labor unions may extend to collective action by employers where such action is ancillary to the collective bargaining process (Brown v. ProFootball, Inc., 518 U.S. 231 (1996)). Likewise, Section 20 of the Clayton Act, (29 U.S.C. § 52), and Section 4 of the Norris-LaGuardia Act, 29 U.S.C. § 104, restrict the use of injunctive relief against certain types of labor activities.

A relatively narrow exclusion from the antitrust laws exists for agricultural cooperatives. Price fixing and other joint marketing activities by farm cooperatives are not covered by antitrust laws where the association conforms to certain requirements (7 U.S.C. § 291). The challenged activity must be reasonably related to bona fide collective marketing efforts and must not go further than necessary for the legitimate needs of collective marketing (see, e.g., United States v. Borden, 308 U.S. 188 (1939)), holding that exclusion does not extend to conspiracies with non-members of the cooperative).

Next, the Export Trading Company Act of 1982 (15 U.S.C. §§ 4001-4021) authorizes the Commerce Department to issue an export trade certificate where an applicant satisfies the criteria set forth (15 U.S.C. § 4013). With regard to the conduct specified in the certificate, the holder is exempt from civil or criminal action under any of the antitrust laws, State or Federal, and the traditional antitrust standards are replaced with a series of competitive standards of behavior. Potential exposure is also reduced since a violation of these special standards is subject only to actual damages rather than treble damages.

Under the so-called Noerr-Pennington doctrine, antitrust laws are inapplicable to individual or group action intended to influence legislation even if the proposed legislation could be deemed to have an anticompetitive purpose. Thus, in Eastern Railroad Conference v. Noerr Motor Freight, (365 U.S. 127 (1961)), railroad companies which sued for a joint publicity campaign seeking to prompt the legislator to impede trucking companies from competing with them, were held immune from the antitrust laws although the court admitted they had an “anticompetitive purpose”. This immunity has since been extended to individual or joint action designed to influence executive branch officials (United Mine Workers of America v. Pennington, 381 U.S. 657 (1965)) or administrative agencies (California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508 (1972)), or to action filed before state or federal courts for the defense of legal rights (Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993)).

In addition to the exclusions from coverage for certain areas of activity, there are limits on the scope of the application of antitrust laws to some entities. Supreme Court decisions have concluded that Congress did not design the Sherman and Clayton Acts to be enforced against action taken by State governmental bodies and thus, that these entities enjoy an implied immunity (Hoover v. Ronwin, 466, U.S. 558 (1984)), dismissing an antitrust challenge to bar examination on the grounds of implied immunity where examination was administered by the state Supreme Court). Likewise, according to the “filed rate doctrine”, immunity from application of the Sherman and Clayton Acts is granted to the individual or collective determination of tariffs or rates by undertakings under the approval of a Federal regulatory agency (Keogh v. Chicago & N.W. Ry. Co., 260 U.S. 156 (1922)). In 1984, Congress enacted the Local Government Antitrust Immunity Act, 15 U.S.C. §§ 34-36, which expressly removed the availability of damages claims against cities, towns, villages and other governmental subdivisions as well as against local Government officials, agents or employees acting in an official capacity, while maintaining injunctive relief against municipalities.

Although foreign nations are generally immune from suit in the United States under the Foreign Sovereign Immunities Act (28 U.S.C. §§ 1330, 1602-1611) a foreign sovereign may be subject to suit for commercial activity carried on in the United States whether or not in connection with commercial activity carried out elsewhere (28 U.S.C. § 1605). Likewise, private parties are immune from antitrust liability for acts carried out in a foreign nation as required by a foreign Government (see, e.g., Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962)).

The status of an organization as a non-profit entity does not prevent its activities from being subject to antitrust scrutiny (Hamilton Chapter of Alpha Delta Phi v. Hamilton College, 128 F.3d 59 (2nd Cir. 1997)). Nevertheless, actions by a non-profit entity may be exempt on grounds that they do not constitute “commercial activity” within the meaning of the antitrust laws (see Dedication & Everlasting Love to Animals v. Humane Society of the United States, Inc., 50 F.3d 710 (9th Cir. 1995)), where the solicitation of donations by a non-profit organization was not deemed to constitute trade or commerce. However, in United States v. Brown University, (5 F.3d 710 (3rd Cir. 1993)), the court held that financial aid to students constitutes commerce subject to the Sherman Act.

Global Competition Law

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Les notions juridiques connexes

1426. Context

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