Competition, Comity, and Confusion: Reconciling the FTAIA’s Import Exclusion with Its Direct Effects Provision

Authors

Elliot Lam, Fordham University School of Law

Keywords

antitrust; sherman act; 15 U.S.C. 1; 15 U.S.C. 2; 15 U.S.C. 6a; foreign trade antitrust improvements act; ftaia; extraterritoriality; extraterritorial application; international comity; prescriptive comity; comity of courts; limits of U.S. law; effects test; direct effects provision; import exclusion; import commerce; domestic effects; “gives rise to” requirement; proximate cause; reasonably proximate causal nexus; immediate consequence; reasonably foreseeable effect; substantial effect; direct purchaser rule; indirect purchaser doctrine; treble damages; leniency programs; antitrust guidelines for international enforcement and cooperation; enforcement discretion; public versus private enforcement; sovereign authority; sovereignty; foreign affairs; foreign policy; conflict of laws; prescriptive jurisdiction; blocking statutes; market allocation; price fixing; per se unlawful restraints; global trade regulation; global monopolies; global cartels; trade and competition policy; cross-border antitrust enforcement; international antitrust; clayton act; section 4 of the clayton act; enforcement cooperation; import market definition; conduct directed at an import market; narrow import definition; broad import definition; DOJ; Department of Justice; FTC; Federal Trade Commission; American Banana; Alcoa; Hartford Fire; Empagran; Empagran II; LSL Biotechnologies; Minn-Chem; Lotes; Animal Science Products; Motorola Mobility; Apple v. Pepper; Illinois Brick; In re Monosodium Glutamate Antitrust Litigation; Biocad JSC; Nippon Paper; Hui Hsiung; Carrier Corp. v. Outokumpu; In re Vitamin C Antitrust Litigation; Restatement (Third) of the Foreign Relations Law; Restatement (First) of Conflict of Laws; FSIA; foreign sovereign immunity; international cooperation; antitrust comity; import trade versus foreign commerce; enforcement agencies; treble damages incentives; cartels and leniency; policy of competition; consumer protection; competition and comity

Abstract

The debate surrounding the Sherman Act’s extraterritorial scope represents a tension between two competing objectives: protecting the U.S. economy from foreign anticompetitive conduct on one hand and respecting the sovereign authority of other nation-states on the other. Applying U.S. law abroad risks undermining sovereign authority by regulating foreign economies, though such regulation appears necessary in some cases to protect U.S. consumers.

Congress’s attempt to square these objectives through enacting the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA) failed to settle the matter. The statute left courts with two new questions: how to distinguish “import” from “nonimport” commerce, and how to determine when anticompetitive conduct that exclusively occurs abroad has a direct effect on the U.S. economy.

This Note examines the circuit split over both questions. This Note then argues that reading the FTAIA’s two provisions together necessitates a narrow interpretation of “import commerce” and a proximate cause standard for the direct effects provision. By construing “imports” narrowly and “direct” broadly, courts can balance protecting competition and respecting international comity. This interpretation not only aligns with the text and legislative intent of the FTAIA but also promotes a more coherent and effective approach to antitrust enforcement for both the U.S. enforcement agencies and private plaintiffs seeking redress for antitrust harms originating from outside the United States.

Recommended Citation

Elliot Lam, Competition, Comity, and Confusion: Reconciling the FTAIA’s Import Exclusion with Its Direct Effects Provision, 94 Fordham L. Rev. 719 (2025).
Available at: https://ir.lawnet.fordham.edu/flr/vol94/iss2/13