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The United States Antitrust Laws: A Canadian Viewpoint

Published online by Cambridge University Press:  09 March 2016

D.H.W. Henry
D.H.W. Henry*
Affiliation:
Investigation and Research, Combines Investigation Act
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Extract

In recent years there has been increasing discussion in both academic and official circles of the problems of non-tariff barriers to trade, particularly restrictive business practices, the conduct of the multinational firm, and the implications of foreign ownership of enterprises. These matters are of concern not only for world markets but for individual nations. In Canada, the reports of several important public inquiries (the Report of the Task Force on the Structure of Canadian Industry, the Interim Report of the Economic Council of Canada on Competition Policy, and the Report of the Royal Commission on Farm Machinery), have been published already. And the Canadian government is now engaged in a major study of foreign ownership of Canadian business; the Standing Committee of the House of Commons on External Affairs has just completed its report on this issue, which includes reference to the extraterritorial application of anti-trust laws. The International Conference on Monopolies, Mergers and Restrictive Practices held at Cambridge in September 1969, in which Canadians participated, discussed important aspects of the multinational firm and the extraterritorial application of anti-trust laws, a subject that has engaged the urgent attention of the International Law Association since 1962. Moreover, the O.E.C.D. has latterly become concerned with the importance of these matters, particularly with their impact on international trade.

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Articles
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Canadian Yearbook of International Law/Annuaire canadien de droit international , Volume 8 , 1970 , pp. 249 - 283
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Copyright © The Canadian Yearbook of International Law/Annuaire canadien de droit international 1970 

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References

1 Foreign Ownership and the Structure of Canadian Industry (January 1968. Queen’s Printer, Ottawa.)

2 July 1969. Queen’s Printer, Ottawa.

3 Special Report on Prices. (December 1969. Queen’s Printer, Ottawa.)

4 House of Commons Standing Committee on External Affairs and National Defence on Canadian-American Relations. July 28, 1970. Latest report tabled October 5, 1970.

5 Jointly sponsored by the United Kingdom Board of Trade and O.E.C.D. (proceedings as yet unpublished).

6 Infra 267–68, 370–72, 280–81, 283.

7 See, for example, the following: Baxter, R. R., “The Extraterritorial Application of Domestic Law,” 1 U.B.C. L. Rev. 333 (1960)Google Scholar; Brewster, K., Law and the United States Business in Canada (Canadian-American Committee, 1960)Google Scholar; Brewster, K., Antitrust and American Business Abroad, c. 11 (1958)Google Scholar; Feltham, I. R., “Extraterritorial Application of Law: Antitrust Law; The Canadian Radio Patents Case, the Peat Moss Case,” 1 U.B.C. L. Rev. 340 (1960)Google Scholar; Feltham, I. R., “Extraterritorial Application of Antitrust Legislations: A Survey of the Australian, British, Canadian and Indian Positions,” paper delivered at Duke University Conference, October 1966Google Scholar; Fugate, W. L., “Antitrust Law and International Trade,” Univ. of Ill. L. Forum, 1959, 387-401Google Scholar; Fugate, W. L., “Application of Antitrust Laws of the United States to International Trade — A Government Lawyer’s View,” 13 The Practical Lawyer 25 (1967)Google Scholar; Fugate, W. L., “Enforcement of the United States Antitrust Laws in Foreign Trade,” Am. Bar Assn. Antitrust, December 20, 1960Google Scholar; Fugate, W. L., “The International Aspects of the United States Antitrust Laws,” paper submitted to International Conference on Monopolies, Mergers and Restrictive Practices, Cambridge, 1969 (unpublished)Google Scholar; Graham, R. W., “Extraterritorial Application of Law: Antitrust Law, Tweedledum v. Tweedledee,” 1 U.B.C. L. Rev. 354 (1960)Google Scholar; Haight, J., “International Law and Extraterritorial Application of the Antitrust Laws,” 63 Yale L.J. 639 (1954)CrossRefGoogle Scholar; Hansard, Hazen, “U.S. Antitrust Process Beyond Our Borders: Jurisdiction and Comity,” in CCH Antitrust Law Symposium 44 (1953)Google Scholar; Jennings, R. Y., “Extraterritorial Jurisdiction and the United States Anti-trust Laws,” 33 Brit. Yb. Int’l L. 146 (1957)Google Scholar; Kilgour, D. G., “Restrictive Trade Practices,” The Antitrust Bull., Vol. 8, No. 1, Jan.-Feb. 1963Google Scholar (an up-dated version of a paper which appeared in the Can. Bar Jr., April 1961, at 114); McCracken, K. W., “Extraterritorial Application to Canada of U.S. Antitrust Laws,” report prepared for Director, Investigation and Research, Combines Investigation Act, Ottawa (1964)Google Scholar; Neale, A. D., “The Antitrust Laws of the United States,” The National Institute of Economic and Social Research, Economic and Social Studies XIX, Cambridge University Press, 1960Google Scholar; Report of the Attorney General’s National Committee to Study the Antitrust Laws (1955, U.S. Gov. Printing Office); Neilson, W. A. W., Collected Materials (Unpublished. York University).Google Scholar

8 Jennings, R. Y., “Extraterritorial Jurisdiction and the United States Antitrust Laws,” 33 Brit. Yb. Int’l L. 146 (1957).Google Scholar

9 D. G. Kilgour, now of Kilgour & World, Toronto. Can. Bar Jr., April 1961, at 114; The Antitrust Bull., Vol. VIII, No. 1, Jan.-Feb. 1963, at 101, 102.

10 Supra note 1, at 402.

11 Supra note 2, at 174 et seq.

12 Ibid., 17g. See, for example, current proceedings against the cartel in quinine and quinidine: CCH 1970 Tr. Cases No. 73, 181.

13 Thorkil Christensen, Sec. Gen. of O.E.C.D., “The Economic Effects of the Technological Revolution and its Accompanying Phenomena,” an address given at the University of Constance, May 22, 1968; and see his introductory statement at the International Conference on Monopolies, Mergers and Restrictive Practices at Cambridge, September 1969, supra, note 5.

14 The Canadian anti-combines laws date from 1889, antedating the Sherman Act by a year; some trade practices provisions such as section 33A (price discrimination and predatory pricing) appear to have influenced the subsequent United States counterpart provisions in the Robinson-Patman Act.

15 R.S.C. 1952, c. 314, and amendments.

16 26 Stat. 209 (1890) and amendments. Also 15 United States Code Nos. 1-7.

17 40 Stat. 516 (1918) and amendments: 15 United States Code Nos. 62-65.

18 28 Stat. 509 (1894) and amendments; 15 United States Code No. 8.

19 38 Stat. 730 (1914) and amendments; 15 United States Code No. 12.

20 38 Stat. 719 (1914) and amendments; 15 United States Code Nos. 41–51.

21 Note that the American Law Institute, in its Restatement of the Foreign Relations Law of the United States, has concluded in section 18 that a state has jurisdiction over conduct outside its territory that causes an effect within its territories if

“(b) (i) the conduct and its effect are constituent elements of activity to which the rule applies; (ii) the effect within the territory is substantial; (iii) it occurs as a direct and foreseeable result of the conduct outside the territory; and (iv) the rule is not inconsistent with the principles of justice generally recognized by states that have reasonably developed legal systems.”*

And the Restatement of the Conflict of Laws now provides in this respect:

“A state can order a person who is subject to its judicial jurisdiction, to do an act in another state.”**

* Restatement, Conflict of Laws No. 94 (1934).

** Restatement (Second), Conflict of Laws No. 94 (Tent. Draft No. 4, 1957).

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

23 U.S. v. American Tobacco Co., 221 U.S. 106 (1911).

24 U.S. v. Sisal Sales Corporation et al., 274 U.S. 268 (1927).

25 W. L. Fugate, “The International Aspects of the United States Antitrust Laws,” a paper submitted to International Conference on Monopolies, Mergers and Restrictive Practices, at 9 (supra note 5).

26 U.S. v. National Lead Co. et al, 63 F. Supp. 513 (S.D.N.Y. 1945); affd. 332 U.S. 319 (1947).

27 U.S. v. Timken Roller Bearing Co., 83 F. Supp. 284 (N.D. Ohio 1949); affd. 341 U.S. 593 (1951).

28 See C.C.H. 1970 Tr. Cases No. 73, 181.

29 U.S. v. United States Alkali Export Ass’n., Inc. et al., 86 F. Supp. 59 (S.D.N.Y. 1949).

30 U.S. v. Minnesota Mining & Manufacturing Co. et al., 92 F. Supp. 947 (D.C. Mass. 1950).

31 U.S. v. Aluminum Co. of America, 148 F. 2d. 416 (2d. Cir. 1945).

32 U.S. v. General Electric Co., 82 F. Supp. 753 (D.N.J. 1949); 115 F. Supp. 835 (D.N.J. 1953).

33 U.S. v. Imperial Chemical Industries Ltd., 105 F. Supp. 815 (S.D.N.Y. 1952).

34 115 F. Supp. 835 (1953).

35 370 U.S. 690 (1962).

36 The War Measures Act, R.S.C. 1952, c. 288, and amendments.

37 U.S. v. Watchmakers of Switzerland Information Centre, CCH 1963 Tr. Cases No. 70, 600 (S.D.N.Y. 1962).

38 133 F. Supp. 40, as modified by 134 F. Supp. 710 (S.D.N.Y. 1955).

39 Ibid, 48.

40 Op. cit. supra note 7, at 325.

41 See, inter alia, Jennings, supra note 8; Feltham, supra note 7, at 351.

42 Supra note 16.

43 Supra note 18.

44 Supra note 29.

45 Supra note 16.

46 Supra note 27.

47 Supra note 31.

48 Supra note 32.

49 Supra note 37.

50 U.S. v. Imperial Chemical Industries, 100 F. Supp. 504 (S.D.N.Y. 1951); 105 F. Supp. 215 (S.D.N.Y. 1952).

51 Ibid, 236.

52 105 F. Supp. 215, 229 (S.D.N.Y. 1952).

53 Ibid, 237.

54 Supra note 32.

55 British Nylon Spinners, Ltd. v. Imperial Chemical Industries, Ltd., [1952] 2 All E.R. 780 (CA.).

56 U.S. v. Radio Corporation of America, CCH 1958 Tr. Cases No. 69, 164.

57 U.S. v. Holopkane Co., Inc., 119 F. Supp. 114 (S.D. Ohio 1954); CCH 1954 Tr. Cases No. 67, 679 (S.D. Ohio 1954).

58 U.S. v. General Electric Company, Westinghouse Electric Corporation, and N.V. Philips, 82 F. Supp. 753 (D.C.N.J. 1949); CCH 1948-49 Tr. Cases No. 62, 518 (D.C. Cal.).

59 395 U.S. 100 (1969).

60 Supra note 16.

61 Supra note 59, at 131–32.

62 Supra note 59, at 110.

63 Supra note 31.

64 Supra note 50.

65 Supra notes 31 and 47.

66 1 U.B.C. L. Rev. 340, 351–52 (1960).

67 Supra note 50.

68 Supra note 55.

69 Supra note 16.

70 [1952] a All E.R. 780, 784.

71 Supra note 58.

72 H.G. Deb. (Can.), 1959, Vol. I, at 618.

73 Supra note 58.

74 Supra note 72, at 618.

75 Ibid., 618–19.

76 Ibid., 619.

77 Infra 270–72.

78 Charter of the International Trade Organization, March 24, 1948, U.S. Department of State Pub. No. 3206; Commercial Policy Series 114.

79 Report of Fifty-first Conference of the International Law Association held at Tokyo, August 16–22, 1964, at xxviii (1965). See the full discussion in these proceedings of the problems of extraterritoriality: ibid., 304–592. At the Fifty-fourth Conference at The Hague in August 1970, the I.L.A. recommended a procedure for the prevention and settlement of disputes Concerning the extraterritorial application of laws on restrictive business practices. Essentially the procedure calls for notification and consultation between states, unless prohibited by law, where anti-trust proceedings in one country would substantially affect interests in another; the objective is to avoid disputes over extraterritoriality and, where necessary, to settle them through negotiation, arbitration or adjudication.

80 O.E.C.D. Document No. C(67)53(Final) October io, 1967.

81 Supra note 15.

82 H.C. Deb. (Can.), 1969, Vol. I, at 574–75.

83 U.S. v. Wilson and Geo. Meyer & Co. and Sunshine Garden Products Inc., 1961 Tr. Cases 70,020 (D.C. N.Cal.).

84 Supra note 58.

85 In re Grand Jury Subpoena Duces Tecum Addressed to Canadian International Paper Company et al., 72 F. Supp. 1013 (S.D.N.Y. 1947).

86 Ibid., 1020.

87 Ibid.

88 For other cases involving production of documents from foreign sources, see Fugate, W.L., “Antitrust Law and International Trade,” supra note 7, at 397–99.Google Scholar See also the texts of diplomatic exchanges between Ottawa and Washington, and other official comments in I.L.A. Report, supra note 79, at 565 et seq.

89 R.S.O. 1960, c. 44.

90 R.S.Q. 1964, c. 278.

91 Supra note 1.

92 Supra note 3.

93 Supra note 16.

94 Supra note 15. Section 32 prohibits agreements in restraint of trade, with an exception for export agreements.

95 Supra note 16.

96 Supra note 18.

97 Supra note 15.

98 Supra note 2, at 112, 118.

99 Ibid.

100 In the Swiss Watch case, the government accepted Swiss representations that the decree did not sufficiently recognize Swiss sovereignty and had the order modified accordingly. Fugate in 13 The Practical Lawyer, 25 (1967). See also re compulsion by a foreign government, Interamerican Refining Corp. v. Texaco Maracaibo Inc., 1970 CCH Tr. Cases No. 73, 069 D.C. Delaware).

101 U.S. v. Jos. Schlitz Brewing Co. et al., (1966) 253 F. Supp. 199 (D.C. Cal. 1966); affd. by the Supreme Court without an opinion; 1966 Tr. Cases No. 71. 916.

102 Some preliminary work has been done by Mr. K. Wayne McCracken, of Messrs. Campbell, Godfrey & Lewtas, Toronto, in an unpublished paper prepared for the Director of Investigation and Research, Ottawa, in 1964.

103 Supra note 31.

104 Supra note 50.

105 U.S. v. Diamond Match Co. et al, (1947) CGH Tr. Cases No. 57, 456 (D.C.N.Y.).

106 Supra note 58.

107 Supra note 83.

108 Supra 269–70.

109 Supra note 59.

110 See, for example, European press reaction to the BP-Sohio Merger; this type of reaction was one aspect discussed at the Cambridge Conference in September 1969: supra note 5.