JURISDICTION

The 1994 Guidelines state that the international recognition of the "effect doctrine" of jurisdiction has widespread. However, it is only the U.S. which extends the "effect doctrine" to a conduct having effect on its export commerce, and no other major countries adopted such approach. Such statement on the "effect doctrine" of jurisdiction is misleading and inaccurate, and therefore, should be deleted.
In relation with the above, the case, cited in Footnote 44, decided by the European Court of Justice involves the conduct that took place outside of the EC market but produced effect within the EC market. This case is not appropriate as an example for "effect doctrine" exercised by EC, since it does not interpret the "effect doctrine" as wide as that of the U.S.

3.11 Jurisdiction Over Conduct Involving Import Commerce

Following Hartford Fire Insurance Co., v. California, the 1994 Guidelines adopt it as a measure for jurisdiction over conduct involving import commerce that "foreign conduct that was meant to produce and did in fact produce some substantial effect in the United State[,]" but it is doubtful that the "intent" requirement of Hartford Fire is satisfied almost invariably as long as imports are intended for sale in the United States. The 1994 Guidelines must be confined, only, to the case that was meant to produce some substantial effect.
The 1994 Guidelines state that "whether they in fact produce the requisite substantial effect will depend on the facts of each case." It should provide with more precise measure. Not only the quantity of import, but also in what respects such conduct is anticompetitive should be considered in deciding "substantive effect" of conduct in the market.

3.13 Jurisdiction Over Conduct Involving Other Commerce

3.131 The Foreign Trade Antitrust Improvements Act of 1982 (FTAIA)

The standard for deciding "a direct, substantial, and reasonably foreseeable effect" of conduct as set forth in the FTAIA should be described in more details.

ILLUSTRATIVE EXAMPLE C:

The 1994 Guidelines suggest that the U.S. would have jurisdiction over such conduct if the conduct 1) was aimed at the U.S. export commerce and 2) produced substantial effect to the U.S. export commerce. In this case, however, substantial effect is produced in the market of country Epsilon and it is an issue to be resolved through the enforcement of the competition laws and regulations of country Epsilon.

3.132 Jurisdiction in Cases Under Subsection 1(A) of the FTAIA

It is unthinkable that foreign vertical restrictions outside the U.S. have on direct and substantial anticompetitive effect on import transactions or commerce within the United States, therefore this clause should be deleted.

ILLUSTRATIVE EXAMPLE D:

The 1994 Guidelines suggest the U.S. Agencies follow FTAIA as to jurisdiction over conduct involving other commerce than import commerce. However, it states the U.S. Agencies will focus, in deciding the U.S. jurisdiction, "on the potential harm that would ensue as a result of the conduct not on whether the conduct in question itself have "direct, substantive and reasonably foreseeable effects" on U.S. commerce. If this means that the U.S. Agencies exercise jurisdiction over the challenged conduct itself even if it has no direct relation with U.S. commerce, such approach is controversial because it allows the U.S. to exercise wider jurisdiction than FTAIA confers.

ILLUSTRATIVE EXAMPLE E:

This ILLUSTRATIVE EXAMPLE is the case that should be resolved according to the competition laws of the country concerned, and the exercise of jurisdiction on the ground that such cartel affects the U.S. export transactions unreasonably expands the scope of jurisdiction. Further, rationale for effects that the cartel in other markets than the U.S. market produces on the price in the U.S. market is unclear, and remains in question as to whether such effect are direct or indirect.
In the case where foreign enterprises form a cartel as to export of their products except for the ones for the sale in the U.S. market and impose import restrictive measurements on the similar products into their country at the same time, the 1994 Guidelines say excess production of the products in such foreign country might find their way into the U.S. market and is likely to produce "direct, substantive and reasonable foreseeable effects" in the U.S. market. However, this is rather an issue falling within the scope of dumping than an object of the antitrust laws in nature. Example E may not be an appropriate example to be addressed in this 1994 Guidelines.
Furthermore, such case rather contributes to promotion of competition and convenience and benefits of U.S. consumers in the U.S. market. Any problems should be clarified in such case with regard to the antitrust laws.

Jurisdiction in Cases Involving Foreign Export Commerce

ILLUSTRATIVE EXAMPLE F:

The case where the producers of country Alpha agree to refuse to adopt any U.S. company technology in deciding an industry standard and exclude the U.S. companies from the Alpha's market, should be resolved according to the competition laws of the country Alpha. It is unreasonable expansion of the scope of jurisdiction recognized to find FTAIA jurisdiction over such conduct of the producers in country Alpha on the ground that there is a substantive effect to the U.S. exports only because equipment is expensive.

3.14 Jurisdiction When U.S. Government Finances or Purchases

In the case of the U.S. Government's procurement or the procurement by the enterprises financed by the U.S. Government, the 1994 Guidelines suggest the U.S. Agencies find jurisdiction over an anticompetitive conduct with respect to such procurement (in a foreign country) when the U.S. Government bears more than half of its costs because the effect of such conduct falls primarily on U.S. tax payers. However, considering FTAIA standard, it is unclear how this example satisfies such standard. In addition, its rationale is unclear. Therefore it needs to be clarified.

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