Antitrust Laws: Foreign Companies And Us Jurisdiction

The applicability of US antitrust laws to foreign companies is determined by the nature and extent of the company's operations in the US. While the laws apply to foreign commerce, the specific jurisdictional requirements and comity considerations vary across different statutes, including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act.

The Sherman Act, which outlaws contracts and conspiracies restraining trade and monopolisation, applies to foreign commerce where the conduct has a substantial effect on US commerce. The Clayton Act, which addresses anticompetitive mergers and acquisitions, applies to foreign firms engaged in commerce or activities affecting US commerce. The Federal Trade Commission Act, which bans unfair competition methods and deceptive practices, applies to foreign commerce with a direct, substantial, and reasonably foreseeable effect on US commerce.

The US Department of Justice and the Federal Trade Commission are responsible for enforcing these laws and often work together to investigate and address anticompetitive practices. They may also cooperate with foreign authorities to resolve conflicts and promote international cooperation.

Foreign companies should be aware of the potential applicability of US antitrust laws to their operations and seek legal advice to ensure compliance. Non-compliance can result in civil and criminal penalties, including fines, injunctions, and imprisonment.

The US has two antitrust agencies: the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ)

The DOJ is the only one of the two to enforce criminal antitrust laws, so if a company is entangled in a cartel investigation, they will likely hear from the DOJ. The DOJ and FTC both review mergers and acquisitions (including joint ventures), once again informally divided by subject.

The FTC mainly focuses on segments of the economy where consumer spending is high, including healthcare, drugs, food, energy, technology, and anything related to digital communications. The DOJ holds sole antitrust jurisdiction in sectors such as telecommunications, banks, railroads, and airlines and has the power to impose criminal sanctions.

The federal government, via both the DOJ and FTC, can bring civil lawsuits enforcing the laws. The DOJ alone may bring criminal antitrust suits under federal antitrust laws.

The DOJ is the only one of the two to enforce criminal antitrust laws

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) are the two federal agencies that enforce antitrust laws in the United States. While both agencies enforce federal antitrust laws, the DOJ is the only one of the two that enforces criminal antitrust laws. The DOJ's Antitrust Division has the authority to impose criminal sanctions and holds sole antitrust jurisdiction in certain industries, such as telecommunications, banking, railroads, and airlines.

The DOJ and FTC have an interagency clearance process to determine which agency will handle an antitrust case, and conflicts between the two agencies are infrequent. The agencies have developed expertise in particular industries or markets over time, and this is the primary factor considered in the clearance process.

The DOJ's Antitrust Division works to promote economic competition by enforcing and providing guidance on antitrust laws and principles. It has the authority to prosecute antitrust crimes and related schemes in government procurement, grant, and program funding at all levels of government. The DOJ also works with other federal agencies, such as the Federal Bureau of Investigation (FBI), to combat antitrust crimes.

In addition to the federal antitrust laws enforced by the DOJ and FTC, state governments may also enforce their own antitrust laws, which often mirror federal laws but may have important differences. State attorneys general can play a significant role in antitrust enforcement, particularly on matters of concern to local businesses or consumers. They may bring federal antitrust suits on behalf of individuals residing within their states or enforce state antitrust laws.

The FTC and DOJ review mergers and acquisitions, divided informally by subject

The Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) review mergers and acquisitions, divided informally by subject. The FTC is an independent federal agency controlled by several commissioners, while the Antitrust Division of the DOJ is part of the Executive Branch. The two agencies' jurisdictions technically overlap, but they tend to have informal agreements, with one or the other handling certain industries or subjects.

The DOJ is the only one of the two to enforce criminal antitrust laws, so if a company is entangled in a cartel investigation, it will likely hear from the DOJ. The DOJ and FTC review mergers and acquisitions (including joint ventures), and companies with significant transactions in the US must determine whether they must prepare a Hart-Scott-Rodino Act filing with the US antitrust agencies.

The FTC and DOJ share jurisdiction over merger review, and transactions requiring further review are assigned to one agency on a case-by-case basis, depending on which agency has more expertise with the industry involved. After the companies report a proposed deal, the agencies will do a preliminary review to determine whether it raises any antitrust concerns that warrant closer examination.

The vast majority of deals reviewed by the FTC and the DOJ are allowed to proceed after the first, preliminary review. However, if a second request is issued, the companies must provide more information. Once the parties have certified that they have substantially complied with the request, the investigating agency has 30 additional days to complete its review of the transaction and take action if necessary.

The FTC focuses on segments of the economy where consumer spending is high, including healthcare, drugs, food, energy, technology, and anything related to digital communications

The Federal Trade Commission (FTC) is one of the two main bodies responsible for enforcing federal antitrust laws in the US, the other being the US Department of Justice (DOJ). The FTC focuses on segments of the economy where consumer spending is high, such as healthcare, pharmaceuticals, food, energy, and technology. This focus ensures that the FTC's efforts have a significant impact on protecting consumers and promoting competition.

The FTC's mission is to enforce the rules of the competitive marketplace through antitrust laws. These laws are designed to promote vigorous competition and protect consumers from anticompetitive mergers and business practices. By focusing on areas of high consumer spending, the FTC can effectively safeguard consumers' interests and ensure a level playing field for businesses.

Healthcare, drugs, and pharmaceuticals are sectors where consumer spending is significant. The FTC devotes resources to these areas to ensure fair competition and protect consumers from unfair practices. For example, the FTC investigates potential violations, such as price-fixing or collusion between pharmaceutical companies, which could result in higher drug prices for consumers.

Food and energy are also sectors of focus for the FTC. These industries are essential to consumers' daily lives, and spending in these areas can be substantial. The FTC monitors these sectors to prevent anticompetitive behaviour, such as price-fixing or market allocation agreements, which could harm consumers by driving up prices or limiting choices.

Technology, including computer technology and internet services, is another area of high consumer spending. The FTC pays close attention to this sector due to its rapid innovation and potential for anticompetitive practices. The FTC investigates companies in this sector to ensure they are not engaging in behaviour that stifles competition, such as forming monopolies or acquiring smaller competitors to eliminate competition.

Anything related to digital communications is also within the FTC's scope. This includes internet service providers and other entities that facilitate digital communication. The FTC ensures fair competition in this sector to protect consumers from potential harm, such as price gouging or limited options for communication services.

By focusing on these segments of the economy, the FTC plays a crucial role in protecting consumers and promoting competition. The FTC's efforts in these high-spending areas help maintain a vibrant economy and ensure that consumers benefit from lower prices, higher-quality products and services, more choices, and greater innovation.

The DOJ has sole antitrust jurisdiction in sectors such as telecommunications, banks, railroads, and airlines and can impose criminal sanctions

The US Department of Justice (DOJ) has sole jurisdiction in imposing criminal sanctions in antitrust cases in sectors such as telecommunications, banks, railroads, and airlines. The DOJ's Antitrust Division is the only body that can enforce criminal antitrust laws.

The DOJ and the Federal Trade Commission (FTC) are the two federal agencies that enforce federal antitrust laws. While their jurisdictions technically overlap, they have an interagency clearance process to identify which agency will take on a case, and instances of conflict rarely occur. The DOJ and FTC have developed expertise in particular industries or markets over time, although there can be overlap. For example, in fiscal year 2020, both agencies reviewed an equal number of transactions related to internet service providers, web service portals, and data processing services.

The DOJ and FTC have a good relationship and generally share the same interpretation of antitrust matters. The FTC focuses on segments of the economy where consumer spending is high, such as healthcare, pharmaceuticals, professional services, food, energy, and certain high-tech industries like computer technology and internet services. The FTC can attempt to obtain voluntary compliance by entering into a consent order with the company if it believes a violation has occurred. If a consent agreement cannot be reached, the FTC may issue an administrative complaint and/or seek injunctive relief in federal court.

The FTC might also refer evidence of criminal antitrust violations to the DOJ. The DOJ has the authority to impose criminal sanctions and can bring criminal antitrust suits under federal antitrust laws.

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