The Year So Far in FTAIA


Article originally Published in Competition Law360 on October 14, 2011.

Congress enacted the Foreign Trade Antitrust Improvements Act of 1982, 15 U.S.C. § 6a (“FTAIA”), in 1982 with the stated goal of clarifying the extent to which United States antitrust laws apply to foreign or international transactions. FTAIA provides, in part, that the Sherman Act “shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless 1) such conduct has a direct, substantial and reasonably foreseeable effect . . . [on United States domestic commerce] . . . and 2) such effect gives rise to a claim” under the Sherman Act. FTAIA has been described as “inelegantly phrased” and using “rather convoluted language.” Turicentro, S.A. v. Am. Airlines, Inc., 303 F.3d 293, 300 (3d Cir. 2002); see also Minn-Chem, Inc. v. Agrium, Inc., No. 10-1712, 2011 U.S. App. LEXIS 19433, at *17 (7th Cir. Sept. 23, 2011) (FTAIA “awkwardly phrased”). In sum and substance, however, FTAIA articulates a general rule that U.S. antitrust laws do not apply to trade or commerce with foreign nations. The statute then creates two exceptions to this general rule, when the conduct at issue either: (1) involves import trade or commerce, or (2) has sufficient effects in the United States to give rise to a Sherman Act claim.

During the first nine-plus months of 2011, several courts —including two federal Courts of Appeal — have grappled with FTAIA in the context of antitrust claims involving foreign and international commerce. This article provides a brief survey of the FTAIA landscape so far this year.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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