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Toward World Antitrust and Market Access

Published online by Cambridge University Press:  27 February 2017

Eleanor M. Fox
Eleanor M. Fox*
Affiliation:
New York University School of Law
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Extract

The lowered national barriers to global trade reveal opportunities for a world without parochial frontiers. One of these opportunities lies in the area of competition law. Competition law is designed to enhance the economic welfare of people by,among other things, breaking down private barriers and preventing the creation and misuse of corporate power through combinations and monopolistic strategies.

Type
Research Article
Information
American Journal of International Law , Volume 91 , Issue 1 , January 1997 , pp. 1 - 25
Copyright
Copyright © American Society of International Law 1997

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References

1 Efforts in progress include, principally, bilateral agreements for cooperation between antitrust authorities.

2 A popular issue today is “positive comity,” which assumes that two or more different countries will recognize and wish to pursue a common interest in enforcing antitrust law. Positive comity contemplates cooperation between antitrust agencies to root out a common evil, e.g., a transnational cartel. The uranium cartel involved behavior that some countries supported and the United States opposed; i.e., the nations did not perceive a common evil. Conflict continually recurs, and finding methodologies to resolve differences is at least as important or more important than finding vehicles to enhance cooperation in situations in which there is a preexisting disposition to cooperate.

3 The European Economic Community, now officially entitled the European Community, is a constituent part of the European Union, which was established by the 1992 Maastricht Treaty on European Union.

4 Parochialism connotes discrimination against and barriers to foreign goods or services. As I use these words, cosmopolitanism is the converse of parochialism. It connotes concern for the interests of the entire community without regard to nationality, while recognizing the legitimate role for national and provincial governments to act in the interests of their citizens.

5 See text at notes 18–35 infra, for a discussion of European Community law.

6 See text at and note 28 infra.

7 See Eleanor M. Fox & Janusz Ordover, The Harmonization of Competition and Trade Law—The Case for Modest Linkages of Law and Limits to Parochial State Action, World Competition L. & Econ. Rev., Dec. 1995, at 5, reprinted in part in 24 Int’l Bus. Law. 458 (1996).

8 See American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909).

9 But for the effects doctrine, we would have needed and probably long since obtained a binding international law on anticompetitive transnational restraints. See Eleanor M. Fox, Jurisdiction and Conflicts in the Global Economy: Crafting a Systems Interface—Hartford Insurance and Foreign Market Access as Case Examples, in Festschrift for Valentine Korah, 1995 EC Competition L. Y.B. (John Kallaugher & Peter Alexiadis eds., forthcoming).

10 The European Community adopted a version of the effects doctrine in the Wood Pulp case, Joined Cases 89, 104, 114, 116, 117 & 125–29/85, Ahlstrom Osakeyhtio v. Commission, 1988 ECR 5193.

11 Hard-core cartel refers to an agreement among competitors solely for the purpose of eliminating competition among them so as to increase their profits.

12 The uranium cartel is an example of mixed public and private action. The U.S. lawsuits against alleged cartelists in France, Canada, the United Kingdom, South Africa and elsewhere provoked the ire of U.S. trading partners, some of whom had supported plans within their nations for the orderly production and marketing of uranium after the United States first stimulated production and then embargoed uranium. See James R. Atwood & Kingman Brewster, Antitrust and American Business Abroad §6.16 (2d ed. 1981); Wilbur L. Fugate, Foreign Commerce and the Antitrust Laws §2.16 (3d ed. 1982).

13 Robert B. Reich, The Work of Nations: Preparing Ourselves for 21st-Century Capitalism, chs. 10, 25 (1991). See 1 Staff of Federal Trade Commission, Anticipating the 21st Century: Competition Policy in the New High-Tech, Global Marketplace, ch. 1A (1996), reprinted as 424 Trade Reg. Rep. (CCH), Extra Edition 1–11 (June 11, 1996).

14 See Merit Janow, Private and Public Restraints that Limit Access to Markets, in Market Access After the Uruguay Round: Investment, Competition and Technology Perspectives, ch. 5 (OECD 1996).

15 Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Art. 40.2, Agreement Establishing the World Trade Organization [hereinafter WTO Agreement], Annex 1C, Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Marrakesh, 15 April 1994, at 319, 337 (1994), 33 ILM 81 (1994). See Eleanor M. Fox, Trade, Competition, and Intellectual Property—TRIPS and Its Antitrust Counterparts, 29 Vand. J. Transnat’l L. 481 (1996).

16 Agreement on Trade-Related Aspects of Investment Measures, Apr. 15, 1994, Art. 9, WTO Agreement, Annex 1A, Final Act, supra note 15, at 139,142. For competition concerns in telecommunications, see Bernard M. Hoekman, Patrick Low & Petros C. Mavroidis, Antitrust Disciplines and Market Access Negotiations: Lessons from the Telecommunications Sector, Paper presented at Conference on Competition Policies for an Integrated World Economy, Oslo (June 13–14, 1996) (on file with author).

17 The Treaty on European Union was signed at Maastricht, the Netherlands, on February 7, 1992, 1992 O.J. (C 224) 1, and became effective on November 1, 1993. It provides for political and monetary union, and various social policies.

Use of the European Union model for the world trading system has been criticized by Professor Michael Trebilcock in Competition Policy and Trade Policy—Mediating the Interface, J. World Trade, Aug. 1996, at 71, on grounds that the model entails or will produce a “flat earth” or homogenized world. Id. at 92–96. I agree with Professor Trebilcock that we should not aspire to a “flat earth,” which implies suppression of the particularistic policy choices of nations. I embrace the basic economic model of the European Union because it constitutes the most developed body of law considering the tensions between national policy and community welfare, and EC law has developed a format for a continuing dialogue between the member states and the “center.” Trading nations of the world might, however, be expected to strike the balance between national prerogatives and community welfare differently, particularly in view of the European goal of deep integration.

18 See Giuliano Amato, Ditchley Foundation Lecture (Ditchley, England 1995) (on file with author).

19 For a description of the economic blueprint of the European Community and the institutional system put into place to carry out the objectives, see generally George A. Bermann, Roger J. Goebel, William J. Davey & Eleanor M. Fox, Cases and Materials on European Community Law (1993 & Supp. 1995).

20 See, e.g., Case 120/78, Rewe-Zentral AG v. Bundesmonopolverwaltung fur Branntwein, 1979 ECR 649 (Cassis de Dijon); Case 124/81, Commission v. United Kingdom, 1983 ECR 203 (UHT milk).

21 See, e.g., European Commission, Seventeenth Report on Competition Policy 174, point 236 (1988) (specifying criteria to evaluate the permissibility of regional state aids). See generally Claus-Dieter Ehlermann, State Aids under European Community Competition Law, 18 Fordham Int’l L.J. 410 (1994).

22 Harmonization directives often spell out detailed common standards. Framework harmonization identifies the important common objectives and gives member states great latitude in deciding how to achieve them.

23 The principles of the European blueprint for freedom of trade without discrimination have easy application to free trade areas beyond the European Union. They have long applied in the European Free Trade Association area. As Central and Eastern European nations have democratized and moved to freer markets, the European Union has brought the most basic of its first principles eastward.

For a suggested adaptation of these principles to North America, see American Bar Association, The Report of the ABA Antitrust Section Task Force on the Competition Dimension of the North American Free Trade Agreement (1994).

24 I use “free trade” and “free movement” to encompass freedom of investment and freedom of establishment.

25 Thus, the EC Treaty, 1992 O.J. (C 224) 6, states in Article 3 that, “[f]or the purposes set out in Article 2 [establishing a common market and achieving harmonious and balanced development of economic activities], the activities of the Community shall include … (g) a system ensuring that competition in the internal market is not distorted ….”

The Treaty on European Union—the Maastricht Treaty, supra note 17—incorporates industrial policy into the Treaty of Rome in ways that are compatible with and do not derogate from competition policy. New Article 130 provides, in paragraph 1: “The Community and the Member States shall ensure that the conditions necessary for the competitiveness of the Community’s industry exist.” Article 130 invites action aimed at adjusting industry to structural change, forming an environment hospitable to small and medium-sized business and business cooperation, and fostering innovation and technological development. However, Article 130 expressly “shall not provide a basis for the introduction by the Community of any measure which could lead to a distortion of competition.”

26 But compare West Lynn Creamery v. Healy, 512 U.S. 186 (1994) (a rare case holding a facially nondiscriminatory tax illegal under the Commerce Clause). While taxing all sellers of milk in or into Massachusetts alike, the law allocated the revenues to the Massachusetts dairy farmers, who were struggling to compete with their lower-cost out-of-state competitors.

27 E.g., Case 48/69, Imperial Chem. Indus. Ltd. v. Commission, 1972 ECR 619.

One can find fault with certain developments in the EC law. The law against border restraints seemed to take on a life of its own. The famous Consten and Grundig principle (Joined Cases 56 & 58/64, Etablissements Consten, S.A.R.L. v. Commission, 1966 ECR 299) prohibits airtight vertical distribution restraints at member state lines regardless of the intensity of interbrand competition or the merits of the claim of efficiencies. The United Brands principle (Case 27/76, United Brands Co. v. Commission, 1978 ECR 207) prohibits dominant firms from selling at different prices to distributors in different nations even when pricing differentials are a direct result of differential national regulation or demand, do not harm competition in an economic sense, and do not disadvantage competitors in the buyers’ line of commerce because the disfavored sellers and the favored sellers operate in different geographic markets. The concern expressed in the judgments is that firms will “re-partition” national markets; but one may question whether a firm, acting alone, does or can isolate, e.g., France or Germany in a meaningful economic sense simply through the structure of its distribution system, when it does nothing to block the flow of its competitors’ sales.

28 Case 41/83, Italy v. Commission, 1985 ECR 873 (British Telecom).

29 Case C-202/88, France v. Commission, 1991 ECR 1–1223 (telecommunication terminals).

30 Case C-320/91, Régie des Postes v. Corbeau, 1993 ECR 1–2533.

31 E.g., Case 13/77, NV GB-INNO-BM v. Vereniging van de Kleinhandelaars in Tabak, 1977 ECR 2115 (INNO/ATAB).

32 See, e.g., Cases 60–61/84, Cinéthèque SA v. Fédération Nationale des Cinémas Français, 1985 ECR 2605; Case C-145/88, Torafaen Borough Council v. B & Qplc, 1989 ECR 3851 (Sunday Trading).

33 See Joined Cases C-140–42/94, DIP SpA v. Comune di Bassano del Grappa, 1995 ECR 1–3257; Joined Cases C-267/91 & C-268/91, Keck and Mithouard, 1993 ECR 1–6097; Case C-245/91, Ohra Schadeverzekeringen NV v. Netherlands, 1993 ECR 1–5872; Case C-2/91, M. Meng v. Germany, 1993 ECR 1–5751; Case C-185/91, Gebriider Reiff GmbH & Co. KG v. Bundesanstalt für den Guterfemverkehr, 1993 ECR 1–5801.

34 An example of the constructive dialogue may be found in the opinion of Advocate General Francis Jacobs in Leclerc-Siplec and of Advocate General van Gerven in Sunday Trading, seeCase C-412/93, Société d’Importation Edouard Leclerc-Siplec v. TFl Publicite SA, 1995 ECR 1–179, 1–182; Sunday Trading, 1989 ECR at 3865. See also Laurence W. Gormley, Two Years After Keck, 19 Fordham Int’l L.J. 866 (1996); Luc Gyselen, Slate Action and the Effectiveness of the EEC Treaty’s Competition Provisions, 26 Common Mkt. L. Rev. 33 (1989); Chung Chan-Mo, The Relationship Between State Regulation and EC Competition Law: Two Proposals for a Coherent Approach, Eur. Competition L. Rev., No. 2, 1995, at 87.

35 See Ernst-Ulrich Petersmann, International Competition Rules for the GATT-WTO World Trade and Legal System, J. World Trade, Dec. 1993, at 35.

Some may perceive that European law is constandy expanding and that this expansionism itself proves the creeping-bureaucracy pitfalls of the EU model. This would be a misconception, especially if the focus is on Europe’s basic economic blueprint of nonparochialism (as opposed to social policy) for the internal market. See Eleanor M. Fox, Vision of Europe: Lessons for the World, 18 Fordham Int’l L.J. 379 (1994) (introduction to symposium issue). The law governing the basic economic blueprint has confined the extent to which free movement law trumps national regulation. See Keck and Mithouard, 1993 ECR 1-6097, and other authorities in notes 33 and 34.

36 Integration of the world economy is less complete than integration of the economies of the EU member states, and claims for national sovereignty are even more insistently made. Moreover, the industrialized countries are apparendy not prepared to embrace orchestrated social policy designed to benefit the poorer nations for the sake of social cohesion in the world.

37 See Leon Brittan, A Framework for International Competition, Address delivered at World Competition Forum, Davos, Switzerland (Feb. 3, 1992).

38 Canada, the European Union, Japan and the United States.

39 The OECD is composed of the industrialized countries.

40 Paper delivered at ABA Antitrust Section program in Brussels at 11–12 (June 22, 1994) (on file with author).

41 See text at notes 66–68 infra.

42 Towards an International Framework of Competition Rules, Communication from the Commission to the Council, COM (96) 284, at 14.

43 World Trade Organization, Singapore Ministerial Declaration, Conf. Doc. WT/MIN(96)/DEC/W, para. 20 (Dec. 13, 1996). The declaration refers to “the existing WTO provisions on matters related to investment and competition policy and the built-in agenda in these areas.” It notes that the work undertaken by the working group will “not prejudge whether negotiations will be initiated in the future.” Id.

44 See Eleanor M. Fox, The End of Antitrust Isolationism—The Vision of One World, 1992 U. Chi. Legal F. 221 (1992); Eleanor M. Fox, The Modernization of Antitrust: A New Equilibrium, 66 Cornell L. Rev. 1040 (1981).

45 U.S. Dep’t of Justice, Antitrust Enforcement Guidelines for International Operations (1988), reprinted in Antitrust & Trade Reg. Rep. (BNA) No. 1391, at S–21 (Spec. Supp. Nov. 17, 1988). See generally Eleanor M. Fox, The Tenth Milton Handler Lecture: Antitrust, Trade and the 21st Century—Rounding the Circle, 48 Rec. A.B. N.Y.C. 535, 539–44 (1993).

46 Very few cases so held, and it was not clear that the concern was warranted. See note 49 infra.

47 15 U.S.C. §6a (1994). The Federal Trade Commission [hereinafter FTC] Act was similarly cut back. 15 U.S.C. §45(a)(3) (1994).

48 Congress expressed no view on whether the 1982 Act affects the case iaw that applies balancing tests to determine whether subject matter jurisdiction exists over cartelizing importers. See, for a leading authority applying such a test, Timberlane Lumber Co. v. Bank of America, 549 F.2d 597 (9th Cir. 1976).

49 Thus, the statute overruled Waldbaum v. Worldvision Enterprises, 1978-2 Trade Cas. (CCH) ¶62,378 (S.D.N.Y. 1978); Industria Siciliana Asfalti v. Exxon Research & Eng’g Co., 1977-1 Trade Cas. (CCH) ¶61,256 (S.D.N.Y. 1977). See Eleanor M. Fox, Extraterritoriality, Antitrust, and the New Restatement: Is Reasonableness the Answer?, 19 N.Y.U. J. Int’l L. & Pol. 565 (1987).

50 To the extent that exporters from the United States had rights under the Sherman and FTC Acts, the rights are left intact by the 1982 statute, except that the statute imposes on a person claiming harm to exports the additional burden of proving a direct, substantial and reasonably foreseeable effect on export trade or commerce of a person engaged in such trade in the United States. FTAIA, supra note 47, para. (1) (B).

51 Carla A. Hills, a past chair of the ABA Antitrust Section, was then the U.S. Trade Representative. James F. Rill, also a past chair of the ABA Antitrust Section, was the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice.

52 Department of Justice Release (Apr. 2, 1993), reprinted in 7 Trade Reg. Rep. (CCH) H50.084.

53 See U.S. Broadens Enforcement Posture on Foreign Application of Sherman Act, and Reaction of Japanese Foreign Minister, 62 Antitrust & Trade Reg. Rep. (BNA) 479 (Sept. 26, 1991).

54 The Bush administration brought no such cases.

55 U.S. Dep’t of Justice & FTC, Antitrust Enforcement Guidelines for International Operations §3.122, esp. Illustrative Examples D, E (1995).

The Clinton administration has brought no pure exporter protection cases. It has brought cases that involved reciprocal restraints on U.S. and foreign markets. E.g., United States v. Pilkington pic, 1994-2 Trade Cas. (CCH) 1170,842 (D. Ariz. 1994).

56 Section 301 has generally been used against toleration of the unauthorized copying of intellectual property. Recently, Kodak invoked section 301 on the basis of claims that Japan was tolerating alleged antitrust violations by Fuji, restricting Kodak from expanding in the Japanese market. The U.S. Trade Representative accepted the petition and referred the alleged government conduct to the WTO.

57 See note 72 infra.

The United States has considered international competition rules in the past. In the late 1940s, it was instrumental in creating, but ultimately did not sign, the Havana Charter (the aborted world trade agreement that was the precursor to the GATT). The Havana Charter contained a restrictive business practices code. See Clair Wilcox, A Charter for World Trade 281–87 & ch. 10 (1972).

The United States is a party to the UNCTAD Restrictive Business Practices Code, signed as a voluntary code in 1980, which sets forth various antitrust rules and incorporates a principle of preferential treatment for developing countries. See Eleanor M. Fox, Harnessing the Multinational Corporation to Enhance Third World Development—The Rise and Fall and Future of Antitrust as Regulator, Iocardozol. Rev. 1981, 1991–97 (1989). However, many U.S. antitrust experts today apparently believe that it was wrongheaded for the United States to negotiate the UNCTAD RBP Code, because the bargaining exercise was bound to weaken principle in favor of statist or protectionist solutions for the less developed countries.

58 For specific differences between EC law on abuse of dominance and U.S. law on monopolization, see Per Jebsen & Robert Stevens, Assumptions, Goals, and Dominant Undertakings: The Regulation of Competition Under Article 86 of the European Union, 64 Antitrust L.J. 443 (1996); Eleanor M. Fox, Monopolization and Dominance in the United States and the European Community—Efficiency, Opportunity, and Fairness, 61 Notre Dame L. Rev. 981 (1986).

59 See Fox, supra note 57; Fox, supra note 15.

60 See Frank Upham, Nihonteki Gyôseikisei sutairu no shironteki modem (A Tentative Model of Japanese Regulatory Style), in Soto Kara Mita Nihonho (Japanese Law in an International Context) (Shiro Ishii & Norio Higuchi eds., 1995).

61 See Bing Song, Competition Policy in a Transitional Economy: The Case of China, 31 Stan. J. Int’l L. 387 (1995); Edward M. Graham, Competition Policies in China, Korea, and Chinese Taipei: A Comparison (1996) (unpublished manuscript, on file with author).

62 See Graham, supra note 61; Merit Janow, Assessing APEC’s Role in Economic Integration in the Asia-Pacific Region (1996) (draft manuscript, on file with author).

63 See John Fingleton, Eleanor M. Fox, Damien Neven & Paul Seabright, Competition Policy and the Transformation of Central Europe, chs. 4, 6 (Centre for Economic Policy Research, 1996) (criticizing this allocation of competition law resources).

64 A more finely tuned set of options, with advantages and limits of each, appears in the table on pp. 20–21 infra.

65 I was one of the members characterized in the Munich document as rejecting the full-competition-code approach and endorsing a minimal approach that would embody 15 principles. The 15 principles are set forth in the introduction to the Munich Code, part VIII. The Munich Code is reprinted in 64 Antitrust & Trade Reg. Rep. (BNA) (Aug. 19, 1993). The alternative minimal approach is included in id. at S–7.

66 See note 43 supra.

67 See note 2 supra. For example, one nation may request another nation to bring proceedings against or to obtain discovery from its own national, where the latter is suspected of anticompetitive conduct that is harming the requesting nation. The second nation will consider the request sympathetically and is encouraged to proceed if its law authorizes it to do so. The recently concluded agreement between the United States and Canada requires the requested party to investigate and to report back the results of its investigation. Agreement on Cooperative Enforcement, Aug. 10, 1995, U.S.-Can., 4 Trade Reg. Rep. (CCH) ¶13,503.

68 Report of the Group of Experts, Competition Policy in the New Trade Order: Strengthening International Cooperation and Rules (reproduced for discussion purposes, European Commission, 1995) [hereinafter the European Experts’ Report]. The members of the group of experts are, as external experts, Ulrich Immenga, Frédéric Jenny and Ernst-Ulrich Petersmann; and, as Commission experts, Claus-Dieter Ehlermann, Jean-François Pons, Roderick Abbott, François Lamoureux, Jean-François Marchipont and Alexis Jacquemin.

As to common rules, the report recommends that an agreed list of minimum principles be incorporated into the national law of the participating nations, with each country obliged only “as to the result to be achieved.” Consensus would be sought on horizontal cartels, other types of cooperation agreements (to be judged under a rule of reason), vertical agreements (e.g., where the restrictive effect is not offset by consumer advantages, or where they constitute a barrier to market access), abuse of a dominant position, mergers (with priority on harmonization of procedures and time limits), and national monopolies and companies with exclusive privileges (to be subject to competition rules). Id. at 22–23.

The experts also suggest the establishment of a register of anticompetitive practices within the contracting states, first by notification (e.g., of exempt restrictive agreements), and later also including non-notified restrictive practices that come to the attention of an international body.

69 See Eleanor M. Fox, Competition Law and the Agenda for the WTO: Forging the Links of Competition and Trade, 4 Pac. Rim L. & Pol’y J. 1 (1995).

70 Expansive jurisdictional reach of antitrust law and the availability of §301 trade remedies may add to the comfort level of U.S. officials in believing that what needs to be done can be done by national initiative.

71 A related approach, similarly skeptical about a multinational regime, would urge that solutions be sought no higher than at regional levels.

72 See, e.g., Joel I. Klein, Acting Assistant Attorney General, A Note of Caution with Respect to a WTO Agenda on Competition Policy at 13–15 (Nov. 18, 1996) (urging increased bilateral cooperation and positive comity, and procedure and process harmonization for premerger filings) (on file with author); Anne K. Bingaman, then Assistant Attorney General for Antitrust, Change and Continuity in Antitrust Enforcement, Address Before the Fordham Corporate Law Institute, New York (Oct. 21, 1993), in 7 Trade Reg. Rep. (CCH) ¶50,123 (1993) (stating the policy of using U.S. antitrust law to open foreign markets); Diane P. Wood, then Deputy Assistant Attorney General, The Internationalization of Antitrust Law, 44 Depaul L. Rev. 1289 (1995) (stressing cooperation between antitrust agencies). See also Diane P. Wood, International Standards for Competition Law: An Idea Whose Time Has Not Come, Paper presented at Graduate Institute of International Studies, Geneva (June 19, 1996).

For an argument by European authors that sectoral agreements, rather than a general multilateral competition agreement, should be the vehicle for developing international competition rules, see Hoekman, Low & Mavroidis, supra note 16.

73 The harmed firm or nation could have an option to sue in its national courts or in the defendant’s national courts.

The U.S. Congress ruled out this obligation (national treatment applied to exporters) in 1982 by the Foreign Trade Antitrust Improvements Act, supra note 47; therefore, the option would require a change in U.S. law.

74 In addition to the above options, one might consider separate antitrust regimes tailored to each of the new trade instruments that deal with intellectual property (TRIPS), services (GATS), investment (TRIMS) and telecommunications. Alternatively, wisdom might counsel a “universal,” rather than a segmented, approach to the recurrent antitrust problems. See Fox, supra note 15, at 494–505.

75 See Fox, supra note 69, at 29–36. See also Fox & Ordover, supra note 7.

76 I have included minimum principles and linking principles as part of Option 3. These proposals could be either close or distant in spirit. Two aspects of minimum principles could hold drawbacks. First, if minimum principles are developed in the detail that seems to be contemplated in the European Experts’ Report, supra note 68, they are not truly minimal and they seem to resemble European Community law in aspects that deviate from the law of some other countries. If this is the case, the proposal might constitute overly intrusive law.

Second, the European documents call for internationalization not only to open markets and aid consumers but also to “level the playing field.” This is a concept frequendy used in EC law. It implies that regulatory differences should be erased so that one nation’s businesses should not have to bear costs not borne by another nation’s businesses; the concept often means that all market participants should bear the higher costs in order to prevent “distortions” in competition. This is a trade concept that should not, in my view, be imported into antitrust. Diversity in national regulatory choices cannot be destroyed without interfering deeply with national sovereignty. If firms doing business in Europe bear a higher cost of antitrust regulation than firms doing business in the United States, that should not in itself constitute a reason for pressuring U.S. law “upwards” to the EC level.

To the extent that European proposals are not essentially dependent on either factor, the minimum principles proposal may be virtually identical to the linking principles proposal.

77 Article 13 of the Munich Code, supra note 65, provides for restructuring firms in noncompetitive, highly concentrated markets where the market structure induces persistent abuses of significant market power adversely affecting at least one other nation. Current U.S. law would merely attack impermissible monopolistic conduct. The United States has experimented with and largely rejected the option of restructuring. This remedy might be reserved for the very rare case of a partly regulated, pardy unregulated monopolist. See United States v. AT&T, 1988-2 Trade Cas. (CCH) ¶64,900 (D.D.C. 1982) (consent decree, modification of final judgment) (vacated by Telecommunications Act of 1996, Pub. L. No. 104-104, §601, 110 Stat. 56, 143). But in view of the costs of error and the disincentive effects associated with such a drastic remedy, it is nearly beyond imagining that the United States would agree to placing such remedial power in the hands of a higher authority.

78 Article 5, on vertical restraints, presumptively prohibits restraints on discounting and transshipping. U.S. law allows such restraints, at least if there is significant interbrand competition. Business Elec. Corp. v. Sharp Elec. Corp., 485 U.S. 717 (1988).

79 Article 14, on abuse of dominant position, prohibits a dominant firm from discriminating among trading parties, placing one at a competitive disadvantage, and making contracts subject to supplementary obligations that have no connection with the subject of the contract. Section 2 of the Sherman Act recognizes that discrimination may be a way to compete, and does not condemn conduct that is not likely to lessen market competition. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) (same result for Robinson Patman Act, primary line competition); Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993).

80 But see Wolfgang Fikentscher, On the Proposed International Antitrust Code, in Antitrust: A New International Trade Remedy? 345 (J. O. Haley & Hiroshi Iyori eds., 1995). Cf. Petersmann, supra note 35. See generally The Princeville Dialogue (Haley & Iyori eds.), in Antitrust: A New International Trade Remedy, supra, at 343 (discussing whether diere should be an international agreement and, if so, what it should contain).

81 See Fox & Ordover, supra note 7. See also “Market Access and Antitrust,” infra p. 19.

82 See United Mine Workers of Am. v. Pennington, 381 U.S. 657 (1965); Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 ( 1961) (holding that competitors may join together to lobby government officials or bodies for anticompetitive measures without offending the antitrust laws). The Noerr-Pennington exemption is akin to the constitutional rights of association and petition.

83 An example of forced harmonization can be drawn from the experience of the European Union, which requires nations aspiring to membership to “approximate” EC competition law. This requirement is contained in the Europe Agreements with the Central and East European Countries (CEECs). Not even EU member states must meet this obligation.

Some of the CEECs may prefer their own version of competition law as they try to adapt their economies to free enterprise; some might prefer simpler law that may be more appropriate to their state of development. European Community documents state the belief, however, that if the national competition law of each of the CEECs is parallel with EC law, the CEECs will have achieved a greater degree of readiness for integration and thus membership in the European Union. See Eleanor M. Fox, The Developing Antitrust Law of the Visegrad Countries—Central Europe Moves into Step with the European Union. Antitrust Report (1995); Fingleton, Fox, Neven & Seabright, note 63 supra, at 54–57.

84 EU abuse of dominance law is more regulatory than U.S. law, which permits greater freedom of action, even by dominant firms, e.g., in cutting off distributors, charging very low prices, and entering exclusive contracts. Also, EU vertical restraint law is more regulatory than U.S. law, which permits greater freedom of action, e.g., in assigning territories to dealers and restricting transshipments. Seejebsen & Stevens, supra note 58; Fox, supra note 58. See also note 79 supra.

85 This suggestion was proposed by a committee of the New York City Bar Association. See Committee on the United States in a Global Economy, E. Fox, Chair, Harmonizing and Coordinating the Economic Laws of Nations: A Comparative Study, 49 Rec. A.B. N.Y.C. 800 (1994).

86 See Wood, International Standards for Competition Law, supra note 72, at 29–34. See generally Hoekman, Low & Mavroidis, supra note 15.

87 See note 12 supra.

88 The European Commission filed a Statement of Objections addressed to International Business Machines Corp. for abuse of dominance despite protests from the United States that IBM’s conduct was procompetitive and efficient. See Fox, supra note 58, at 1011–17.

89 See Brief for the Government of the United Kingdom at 5, 9 (not recognizing alleged coercive boycott), filed in California v. Hartford Fire Ins. Co. (No. 91-1128), later reported at 509 U.S. 764 (1993).

90 In the Laker matter, the U.S. Government withdrew a criminal information against British Airways (allegedly guilty of conspiring to drive Laker from the market) as a favor of President Reagan to Prime Minister Thatcher, who wanted to privatize BA free from the cloud of the lawsuit.

91 See Fox, supra note 69.

92 This provision would replace export cartel exemptions; national law would no longer be inapplicable just because “only foreigners” are hurt.

93 See note 55 supra.

94 See Jiro Tamura, Foreign Firm Access to Japanese Distribution Systems: Trends in Japanese Antitrust Enforcement, 4 Pac. Rim L. & Pol’y J. 267 (1995).

95 See FTC v. Consolidated Foods Corp., 380 U.S. 592 (1965) (acquisition); United States v. Loew’s Inc., 371 U.S. 38 (1962) (block booking). See also United States v. E.I. du Pont de Nemours, 353 U.S. 586 (1957) (stock acquisition).

96 See, e.g., K.M.B. Warehouse Distrib., Inc. v. Walker Mfg., 61 F.3d 123 (2d Cir. 1995); Sicor Ltd. v. Cetus Corp., 51 F.3d 848 (9th Cir.), cert, denied, 116 S.Ct. 170 (1995).

97 F. M. Scherer, Retail Distribution Channel Barriers to International Trade, Paper delivered at Conference on the Multilateral Trade Regime in the 21st Century: Structural Issues, Columbia University (Nov. 3, 1995) (on file with author).

98 E.g., Case 85/76, Hoffmann-La Roche v. Commission, 1979 ECR 461; Case T-83/91, Tetra Pak Int’l SA v. Commission, 1995 ECR 11–762 (CFI).

99 See United States v. American Tel. & Tel. Co., 524 F.Supp. 1336 (D.D.C. 1981) (denying defendant’s motion to dismiss at the close of the Government’s case in chief).

100 See Fox, supra note 58.

101 The absence of any antitrust law, e.g., in less developed countries, may cause friction if falling government entry barriers are replaced by private barriers.

102 See note 22 supra.

103 As for an anticartel principle, I have suggested that nations adopt “an anu-cartel rule, subject to the right of a nation to adopt tailored, transparent derogations to address internal market problems.” Fox, supra note 69, at 30.

104 EC law provides a ready resource as a body of learning regarding what is an unreasonable or unjustified public restraint. See text at note 28 supra. Nationalistic or discriminatory reasons are never admissible as a justification.

105 Thus, the United States could not export its treble damage remedy.

106 Case law under EC Treaty Article 5, which obliges nations not to jeopardize the attainment of the Treaty’s objectives, may be helpful.

107 Fines could go to the WTO treasury and help to fund the system.

Also, if WTO adjudicatory panels find a violation of law, their finding could be prima facie evidence of a violation usable by a victim seeking to recover damages.

108 The law on remedies may be informed by the law of the European Community regarding failure of member states to implement directives and otherwise carry out their obligations under EC law.

109 Witness the ongoing dispute between Kodak and Fuji and the complex and contradictory submissions of fact to the United States Trade Representative in connection with Kodak’s petition under §301 of the 1974 Trade Act. The U.S. Trade Representative referred the matter to the World Trade Organization. Issues of private restraint may be handled by the U.S. Justice Department and the Japan Fair Trade Commission.