EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE WASHINGTON, DC I SEPTEMBER 28, 2015

3rd Annual Joint Conference - Concurrences Review & GW Law ATTENDEES

A Turquoise Heenan Paris Airbus America Heritage Foundation Allen & Overy India Competition Apellate Tribunal American Antitrust Institute Inter-American Development Bank Axinn Veltrop & Harkrider Intesa Sanpaolo Baker & Miller Kim & Chang Baker Botts Kroll Ontrack Bates White Maersk Bird & Bird Marval, O’Farrell & Mairal Bloom Strategic Counsel Mlex Bloomberg BNA Morgan, Lewis & Bockius Brown Rudnick Morrison & Foerster Bryan Cave National University of Advanced Legal Studies Cadwalader, Wickersham & Taft O’Melveny & Myers Cleary Gottlieb Steen & Hamilton OECD Competition Commission Clifford Chance Paul Hastings Contribuyentes por Respeto Paul, Weiss, Rifkind, Wharton & Garrison Cornerstone Research PayPal Covington & Burling Policy & Regulatory Report Criterion Economics Qualcomm Davies Ward Phillips & Vineberg Ropes & Gray Davis Polk Rubin Delegation of the European Union to the USA Scott and Scott Deloitte Shell Oil Company Dunlap Bennett & Ludwig Shin & Kim / Kobre & Kim Economists Incorporated Sidley Austin Eimer Stahl SNCF Geodis eTERA EUROPE Souto Correa Advogados Eton Park Steptoe & Johnson Fedders Lloyd Corporation Limited The Chisholm Group Florida Evergreen The World Bank Group Fountain Court Chambers University of Illinois Freshfields Bruckhaus Deringer University of Pennsylvania Garrigues US Department of Justice George Mason University US Federal Trade Commission George Washington University White & Case Georgetown University Wilson Sonsini Goodrich & Rosati GeyerGorey Winston & Strawn Global Competition Review Yale School of Management Hausfeld Yulchon

2 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE PROGRAM

2:30 pm WELCOME REMARKS 4:15 pm NEW MEANINGS William E. KOVACIC I Professor, George Washington University Law School, Washington DC FOR DIRECT EFFECT AND CAUSATION

2:40 pm James FREDRICKS I Assistant Chief, Department OPENING KEYNOTE SPEECH of Justice, Antitrust Appellate Section, Washington DC

WHAT’S THE ROLE OF COMITY Camilla HOLTSE I Chief Legal Counsel, Maersk, Copenhagen

IN THE INTERNATIONAL ANTITRUST David RODI I Senior Antitrust Legal Counsel, ENFORCEMENT? Shell Oil Company, Houston

Diane P. WOOD I Chief Judge, US Court of Appeals MJ MOLTENBREY I Partner, Paul Hastings, Washington DC for the Seventh Circuit, Chicago Michael SPAFFORD I Partner, Paul Hastings, Washington DC

Moderator: Jeremy EVANS I Partner, Paul Hastings, Washington DC 3:00 pm CHALLENGES TO INTERNATIONAL COMITY? 5:15 pm GOOD VS. BAD

Frédéric JENNY I Chairman, OECD Competition EXTRATERRITORIALLY: Committee, Paris WHAT IS THE DESIRABLE Joseph HARRINGTON I Professor, The Wharton School, University of Pennsylvania LEVEL OF GOVERNMENT James RILL I Senior Counsel, Baker Botts, Washington DC ENFORCEMENT? Donald BAKER I Partner, Baker & Miller, Washington DC Douglas H. GINSBURG I Judge, US Court of Appeals Daniel BITTON I Partner, Axinn, Veltrop & Harkrider, New York for the District of Columbia Circuit I Professor of Law, George Mason University School of Law Moderator: John DeQ. BRIGGS I Managing Partner, Axinn, Veltrop & Harkrider, Washington DC John TERZAKEN I Partner, Allen & Overy, Washington DC

Mark POPOFSKY I Partner, Ropes & Gray, Washington DC Michael HAUSFELD I Chairman, Hausfeld, Washington DC Moderator: Ian SIMMONS I Partner & Co-Chairman of Antitrust Practice Group, O’Melveny & Myers, Washington DC

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 3 Concurrences Review and The Competition Law Center of GW Law organized, on September 28, 2015, the 3rd annual conference on «Extraterritoriality of Antitrust Law in the US and Abroad: A Hot Issue.» The event was supported by Axinn, Veltrop & Harkrider, O’Melveny & Myers LLP, and Paul Hastings. Chief Judge Diane P. Wood addressed the keynote speech.

KEYNOTE SPEECH WHAT’S THE ROLE OF COMITY IN THE INTERNATIONAL ANTITRUST ENFORCEMENT? Chief Justice Diane P. WOOD

Bill KOVACIC (Director of the George Wash- the way it sees the application of its antitrust of competition laws worldwide and its positive ington Competition Law Center) welcomed laws. In the views of chief Judge, in the early effects for consumer as long as such laws the audience and opened the conference by days, the US imposed self-restrictions to do not slide over businesses practices. remarking the importance of extraterritoriality questions such as the effect on US markets, In this international context, the allocation of in antitrust enforcement. Kovacic highlighted the compatibility or lack thereof with other responsibility for the regulation of anticom- the increase in number of existing competition regimes, as well as the role that comity should petitive activities is not solvable by a simple plus authorities (currently approximately 130) play. As a matter of example, the 9th circuit formula. As such, the resurgence of attention and the fact that some of them are becoming came up with the timberlane decision sugges- to comity is not surprising. Wood offered her very powerful in practice. Kovacic discussed ting a multifactor test on comity. positive opinion over cooperation as a strategy how the USA ‘monopoly’ relating to antitrust to enforce competition laws despite the fact enforcement became a US-EU duopoly when Chief Justice noted that the current thinking that it is difficult to find another system like the EC adopted its first merger regulations. is different. Since 2002, the Supreme Court the US that relies on private enforcement. In These days, an oligopoly is being developed, has been tightening up the vocabulary relating this regard, chief justice Wood argued that if particularly with China, South Africa, India, to the concept of jurisdiction in many areas of there is an 80% agreement it would be advi- and Brazil. law. Furthermore, chief justice raised the point sable to cooperate in such percentage and that there is a need to draw a line between a agree respectfully to the disagreement on the Consequently, international transactions as true jurisdictional rule and other type of rules. remainder of the 20%. well as monopoly cases are being structured The practical difference of making such distinc- differently. Kovacic anticipated that soon eight tion relies on the fact that subject matter juris- Finally, chief justice Wood concluded by arguing to ten gatekeepers will be key to the struc- dictions can be raised any time, whereas the in favor of comity to be administered by the turing of business transactions. Against this matter of the statute reach will be raised under executive and even by other social actors. background, Kovacic concluded that there a motion to dismiss. Chief justice determined Chief justice understands that it is extremely is disappointment as to comity not having that the FTAIA is not a question of subject difficult to ask a court to administer comity had a stronger role. matter jurisdiction and therefore falls under the as the courts hands are tight. In her view, timberlane was a good effort, but the seven Diane P. WOOD (Chief Judge, US Court of latter category, i.e., motion to dismiss. Then, factors included in such decision without Appeals for the Seventh Circuit, Chicago) upon discussing the split interpretations of the weighting what goes to each factor is not delivered the opening keynote speech on the FTAIA by the ninth and second circuits, Wood optimal. Further, she reminded the audience role of comity in the international antitrust predicted that eventually the Supreme Court that the Supreme Court has moved away enforcement scenario. will decide on the matter. from these types of balancing tests. Eventually, Speaking from her experience, Chief Judge In line with Kovacic’s opening remarks, chief she expressed her concerns relating to judicial understands that the USA has changed in justice commented on the increasing number comity becoming a reality.

4 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE PANEL 1 CHALLENGES TO INTERNATIONAL COMITY?

John BRIGGS (Managing Partner, Axinn, Veltrop did not require the Commission to take into account James RILL (Senior Counsel, Baker Botts, Wash- & Harkrider, Washington DC) opened the first panel other penalties imposed on the same conduct abroad. ington DC) focused his remarks on his extended by pointing to the importance of understanding This judicial decision applies different principles than experience. He stressed how much the antitrust the different approaches taken by the EU and the Motorola decision in the US. With respect to enforcement landscape had changed and how other USA relating to comity. Then, he gave the floor mergers Mr Jenny observed that competition autho- jurisdictions’ decisions could impact American busi- to the panelist to discuss such different approaches rities are in the driver’s seat and that international nesses. Mr. Rill broadly agreed with the rest of the and to comment on convergence thereof. cooperation on mergers between competition autho- panelists and concluded that international comity rities has been developing very fast, with the result would be desirable albeit difficult to implement. Frédéric JENNY (Chairman, OECD Competition that that there are many fewer transnational conflicts Committee, Paris) began his remarks by clarifying Daniel BITTON (Partner, Axinn, Veltrop & Harkri- than they used to be in the 1990s. Mr. Jenny concluded that it is challenging to define convergence as the der, New York) expressed his personal views as that comity principles are not usually considered by number of jurisdictions having a competition law an American and European trained attorney dealing courts as principles they should respect. But comity increase. Mr. Jenny explained that there is a territo- with multijurisdictional investigations, litigation and principles seem to be more widely applied by compe- rial dimension to article 101 and 102 of the TFUE. transactions. Mr. Bitton pointed to another aspect tition authorities which cooperate on transnational Within the EU there is no need for an FTAIA type of of the reciprocity inherent in the concept of inter- merger cases. legislation as antitrust laws are not applicable in the national comity: whether the US is ready to see EU if there is not intra EU commerce effect. Mr. Joseph HARRINGTON (Patrick Harker Professor, other jurisdictions follow its lead in aggressive Jenny continued to comment on the need to make The Wharton School, University of Pennsylvania) antitrust enforcement. He took the US v. Apple a distinction, when discussing international comity, opened his remarks by noting that the primary case as an example. In that case, the US govern- between merger control and antitrust. With respect rationale for comity is reciprocity; it is a quid pro ment alleged a per se horizontal cartel, yet pursued to antitrust, Mr. Jenny commented on the recent quo that both countries will limit their intervention a civil instead of criminal case against Apple as a Inno Lux case in which the EU Court of Justice confir- on certain matters. In determining whether the cartel facilitator. He posed the following questions: med the EC commission decision which held that exercise of comity is warranted, he argued that What if antitrust regulators in China adopt criminal when a vertically integrated undertaking incorporates one should assess whether the implicit reciprocal antitrust enforcement like the US and prosecute the goods in respect of which the infringement was behavior is actually desirable. In the case of antitrust, a US corporation and its executives criminally in committed into the finished products in its production the guiding principle is the protection of consumers a case like that? Would the US permit that to units situated outside the EEA, the EU Treaty compe- which led him to conclude that comity should be happen, as it so often expects other countries to tition provisions apply to the sale of those finished assessed in terms of its impact on consumer welfare. do when DOJ criminally prosecutes their corpo- products by the subsidiaries in the EU. In this decision He warned against consumer harm being the rations and citizens for cartel violations? If not, , the court recognized that the same conduct could collateral damage associated with comity and to then should the US perhaps be more restrained thus be sanctioned in different jurisdictions but it held instead translate the benefits and costs of comity in its criminal prosecution of foreign corporations that the concept of non bis in idem ( or double jeopardy) into the common currency of consumer welfare. and nationals?

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 5 PANEL 2 NEW MEANINGS FOR DIRECT EFFECT AND CAUSATION

Jeremy EVANS (Partner, Paul Hastings, tive conduct, calculation of a fine, or a merger. and that because the jurisdictional lines are blurry, Washington DC) opened the second panel She remarked that according to well-established any company that launches its products into by providing an overview of the FTAIA and EU case law foreign conduct must have effect the stream of global commerce should assume asking the panelists a series of questions in the EU, whether it applies to anticompeti- that it could be subject to a price-fixing charge designed to explore their views on the scope tive agreements or mergers. With respects somewhere. On the other hand, vague juris- of the extraterritorial reach of the Sherman to mergers, she highlighted that it has never- dictional dividing lines may cause international Act and future trends. The questions elicited theless been the practice of the EU Commis- companies to avoid conduct in that would be a range of perspectives from the panelists sion to require EU merger notification of non-EEA legal where it occurred based on the possibility based on their different roles as counsel for joint ventures where the joint ventures parents’ of extraterritorial claims. Mr. Rodi emphasized the government, the defense bar and US and turnover meet the thresholds in the EU Merger the lack of practical difference between the two European in-house role. Mr. Evans also offered Regulation, but where the joint venture has competing US standards—‘immediate hypotheticals to the panelists designed to no effects on EEA. Recently, the EU Commis- consequence’ versus and ‘proximate cause.’ discuss the legal standards and explore what sion has however proposed to change this He observed that the distinction between these conduct satisfies the “direct effects” test set practice and propose to exclude such non-EEA two standards are so legalistic, and difficult for out in the FTAIA. joint ventures from EU merger control. This business-people to understand, that in-house James FREDRICKS (Assistant Chief, Depart- would provide more legal certainty for compa- counselors rarely rely on this difference in advising ment of Justice, Antitrust Appellate Section, nies and the proposal is therefore welcomed. clients. Finally, Mr. Rodi criticized the ‘proximate Washington DC) explained that the DOJ’s Upon providing the audience with very illus- cause’ standard as being so amorphous that approach to extraterritoriality is very important trative examples on how the company Ms. a company often will not know whether its for two main reasons. First, DOJ takes into Holtse represents is affected by the multipli- conduct is subject to US jurisdiction until it is in consideration international comity when bringing city of existing competition laws and requi- court litigating the issue. rements, she urged for the need for clarity an enforcement action. Second, the connec- Michael SPAFFORD (Partner, Paul Hastings, and certainty. She concluded by expressing tion to the US commerce needs to be esta- Washington DC) opened his remarks by her concerns relating to the lack of legal blished, since US antitrust law does not provide explaining that since it is not clear where the certainty that can lead to bad results on redress for every injury in the world. Mr. US law ends it has to be assumed that it competition enforcement. Finally, she stated Fredricks also responded to the moderator’s applies everywhere. In reference to the inter- that jurisdiction boundaries are necessary questions by clearly arguing in favor of the pretation of the FTAIA, Mr. Spafford opined especially for corporations such as Maersk ‘proximate cause’ interpretation of the FTAIA. that if legislators would have wanted to way that operate globally on globally interlinked Mr. Fredricks concluded by stating that the proximate cause they would have, but instead markets. proximate cause test is a flexible concept they said direct to mean direct effect on the well-suited to addressing concerns about David RODI (Senior Antitrust Legal Counsel, US markets. Then he commented on the remoteness and courts have a great deal of Shell Oil Company, Houston) in line with the existing tension between flexibility and certainty experiencing applying it in many legal contexts previous panelist, claimed that legal clarity would in view of the increase in foreign enforcement including in antitrust. be welcome. He expressed his concerns relating program reaching out to every corner parti- Camilla HOLTSE (Chief Legal Counsel, Maersk, to the lack of current understanding on where cularly relating to cartels. He argued that on Copenhagen) argued in favor of legal certain- the boundaries of national competition laws the one hand proximate cause grants flexi- ties as a way to set precise boundaries in the are. Mr. Rodi observed, however, that for global bility and leverage, but that, on the other hand, application of competition laws. Then, Ms. multinational companies, where compliance is certainty promoted compliance and made Holtse expressed her views from a European a priority, the question of precisely where the counseling easier. Mr. Spafford concluded perspective, and recalled the discussion of jurisdictional line falls makes little difference in by stating that there is not enough guidance the first panel on the different tests applied practice. As an example, Mr. Rodi noted that yet to resolve this tension, making legal coun- in the EU when dealing with an anticompeti- price fixing that is illegal in most jurisdictions, seling a challenge.

6 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE PANEL 3 GOOD vs. BAD EXTRATERRITORIALLY: WHAT IS THE DESIRABLE LEVEL OF GOVERNMENT ENFORCEMENT?

Ian SIMMONS (Partner & Co-Chairman of effect that gives rise to a claim. In this respect, Mark POPOFSKY (Partner, Ropes & Gray, Antitrust Practice Group, O’Melveny & Myers he explained to the audience that when advan- Washington DC; Adjunct Professor, George- LLP, Washington DC) opened the third panel cing a novel theory the Government first brings town Law Center) stressed the importance by reviewing with the audience the literal text a civil action to establish the legitimacy of its of clarifying when the FATA applies to conduct of the FTAIA provisions. He expressed his interpretation, i.e., a precedent; as an example, that involves both domestic and foreign view that the FTAIA provided for a broad he pointed to the civil case against American elements, an issue few courts have addressed. exclusion to the Sherman Act unless the two Airlines first establishing that soliciting an This could prove important in future criminal cumulative conditions in the statute were met. agreement to fix prices is unlawful. Only prosecutions, when the government declines The first, the “import” provision, brings conduct after the precedent has been established is to rely on import commerce. In practice, Mr. Popofsky explained, the government tends involving foreign trade back into the reach of the conduct prosecuted criminally. He concluded to invoke import commerce and count indirect the Sherman Act if the conduct involves import by highlighting the uncertainties and interpre- US sales differently in negotiating criminal trade or commerce. Simmons pointed out tative difficulties posed by the wording of the fines; but if a defendant elects to go to trial, that there are a host of unsettled questions FTAIA. concerning the “import” provision: for example, cases such as AUO show that juries will decide in a case alleging a conspiracy as to “compo- Michael HAUSFELD (Chairman, Hausfeld, whether the conduct is sufficiently within the nents” (for example, price fixing of compres- Washington DC) initiated his remarks by pointing Sherman Act’s territorial scope. Mr. Popofsky sors), is the import clause triggered if refrige- to the fact that the decline in US antitrust also explained the reasons why State antitrust rators are imported which contain the enforcement is no longer at the core of the laws ought not be construed to have a broader compressors? In other words, is the import competition law determinant factors. Diffe- territorial scope than Federal antitrust laws, provision only triggered when the product rently, the rise of antitrust enforcement in other a recurring issue in indirect purchaser litigation. that was subjected to the conduct is imported? jurisdictions is relevant. Mr. Hausfeld opined John TERZAKEN (Partner, Allen & Overy, The second, the “domestic effects” provision, that with respect to extraterritoriality and public Washington DC) explained that, in his personal makes clear that the “claim” must arise from enforcement, the US felt isolated as other experience working for the DOJ, extraterritoria- the domestic effects of the conduct, not from antitrust regimes covering offenses sanctioned lity and positive comity play an important role. the conduct itself. Does that therefore mean by the US appeared. In his view, the US had He stressed the fact that the DOJ is amongst plaintiffs must allege and prove their injury a restrictive approach towards territoriality major international cartel enforcers and that, as flows not from the price fixing (the conduct) not to make other nations feel that it was such, he anticipated that it will continue to rely but from the US effects of the conspiracy? imposing the American views and thus invading on extraterritoriality principles to fight against Simmons, referencing his recent ABA Antitrust sovereignty. Mr. Hausfeld underlined that cartels. That said, Mr. Terzaken expressed his Section article, also raised the issue as to the views on extraterritoriality differ when concerns on the limits of criminal enforcement whether a criminal prosecution can be based discussing collusion, mergers or abuse of and concluded that such limits are at the crossroads solely on the domestic effects provision, power and monopolies. Whereas in collusion of the future of extraterritoriality and comity. because an indictment is not a “claim.” cases interests are aligned, the same is not Douglas H. GINSBURG (Judge, US Court the case in mergers or monopolization cases. Editor: Marianela López-Galdos, Principal Mr. Hausfeld concluded by highlighting that of Appeals for the District of Columbia Circuit; Researcher at George Washington Competition Law Professor of Law, George Mason University in the new world with numerous competition Center School of Law) in response to the moderator’s systems, international comity and extraterri- Views expressed cannot be regarded opening remarks, anticipated further cases toriality will have a more significant meaning as stating an official position of any of the that will determine what constitutes a direct than ever. institutional speakers.

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 7 VIDEOS

During the Conference some of the speakers summarized some of their ideas in short videos. These can be watched at Concurrences.com website (Events > September 28, 2015 > Washington, DC).

Daniel Bitton John Briggs Jeremy Evans Partner, Axinn, Veltrop & Harkrider, New York Managing Partner, Axinn, Partner, Paul Hastings, Washington DC Veltrop & Harkrider, Washington DC

Michael Hausfeld Frédéric Jenny Bill Kovacic Chairman, Hausfeld, Washington DC Chairman, OECD Competition Committee, Paris Professor, George Washington University Law School, Washington DC

Michael Spafford Partner, Paul Hastings, Washington DC

8 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE PRESS REPORTS

REPORT BY LAW360© DOJ official defends foreign antitrust enforcement By Jimmy Hoover Law360, Washington

A top official in the US Department of Justice’s James Fredricks, a top official in the division’s joint ventures,” Fredricks said. “There’s no Antitrust Division fought back at criticism of appellate section, said Wednesday at an event way Congress could have provided a mecha- its loose enforcement of US competition laws at George Washington University Law School. nical role.” abroad, saying Monday that the agency needs … … the flexibility to assess each case’s circums- According to panelist Michael Spafford, a tances. Speaking to the GWU audience Monday via partner at Paul Hastings LLP, the new standard teleconference, US Circuit Judge Diane P. Congress curtailed the federal government’s reaches beyond the original text of the FTAIA, Wood, who authored the opinion adopting ability to prosecute antitrust violations occur- which explicitly called for a “direct” cause. the proximate cause standard for the Seventh ring outside the US when it passed the Foreign “If they meant proximate cause, they would Circuit, said the court did not think the Ninth Trade Antitrust Improvements Act of 1982. have put it in the statute,” Spafford said. Circuit’s immediate consequence standard However, it also provided exceptions for conduct “would not be a good definition” for “direct” … that has a direct effect on domestic markets. under the statute given additional requirements During the panel, Fredricks suggested that by the FTAIA. Under that exception to the FTAIA, the Anti- clarity was unrealistic given the variety of trust Division has now stretched its foreign On the possibility of the Supreme Court conduct prohibited by the antitrust laws. reach to conduct that proximately causes resolving that disagreement some time in domestic effects—a new standard that helps “There could be all kinds of different conduct the future, Judge Wood said, “That of course the agency weigh multiple aspects of a case, from price-fixing to exclusionary conduct to would be fine.”

Read the full article on Law360.

REPORT BY MLEX© Courts aren’t the right place for international comity arguments, appeals court judge says By Leah Nylen

Courts aren’t the right venue to weigh inter- …. governments, including Japan, South Korea national comity considerations raised by and Belgium, submitted briefs urging the court Speaking on a different panel at the same companies or other defendants, the chief conference, James Fredricks, assistant chief against an expansive view of when plaintiffs judge of a US appeals court and leading anti- of the DOJ’s Antitrust Appellate Section, can seek damages because of comity concerns. trust expert said Monday. emphasized that the agency is cognizant of …. Defendants would do better to argue to the comity issues. “International comity is at the US Congress that it should change the law forefront of our thinking in these cases,” he “The ability to get to foreign commerce exists or to the executive branch that it should exercise said. for the government,” she said. “To the extent prosecutorial discretion, such as by not pursuing In her remarks, Wood also addressed a this reveals a wedge between private enfor- antitrust cases related to foreign conduct if it November 2014 decision by her court that cement and government enforcement, which is also being punished by a foreign regulator, prohibited Motorola Mobility from pursuing it does, it seems to me it’s Illinois Brick that said Chief Judge Diane Wood of the US Court antitrust damages for purchases made by its creates the wedge and not the FTAIA – and of Appeals for the Seventh Circuit. foreign subsidiaries. In that case, several foreign certainly not the Seventh Circuit.”

Read the full article on MLex.

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 9 REPORTS BY GLOBAL COMPETITION REVIEW© DOJ lawyer defends Agency’s reading of FTAIA By Pallavi Guniganti

The “proximate cause” interpretation of the are placing them where private plaintiffs areas of law taught to first-year law students. Foreign Trade Antitrust Improvements Act aren’t happy.” The FTAIA has the difficult job of limiting the advocated by the Department of Justice is a Paul Hastings partner Michael Spafford, flexible yet familiar standard for courts to apply, reach of the Sherman Act, even though the however, took issue with the DOJ’s desire for the assistant chief of the appellate section in Sherman Act itself is broadly written and covers the DOJ’s antitrust division said yesterday. flexibility, which he said is in tension with busi- a variety of conduct, Fredricks said. nesses’ ability to be certain about what the ... James Fredricks, who argued for the govern- law is. Such certainty promotes compliance ment in the Motorola Mobility litigation and and enables lawyers to explain to clients where “We brought our LCD cases in the Ninth Circuit, has co-authored amicus briefs in other cases the lines between legal and illegal conduct which applies the stricter ‘immediate dealing with the FTAIA, spoke on a panel lie, he said. consequences’ standard, and we were comfor- discussing “new meanings for direct effect table doing that,” he said. “We never thought and causation” at a conference on the extra- The “proximate cause” standard of the FTAIA, ‘immediate consequences,’ properly under- territoriality of antitrust law. under which foreign conduct is deemed to stood, meant immediacy in a temporal sense.” have a “direct” effect on the US and thus ... The division cares about how the Act is inter- come within the antitrust laws, is an example preted by courts because when the DOJ brings of such flexibility, Spafford said. Fredricks and Spafford were joined on the actions, it carefully considers the implications ... panel by Camilla Holtse, chief legal counsel for the US’s relations with foreign nations, for shipping company Maersk, and David Rodi, Fredricks agreed that in some ways, the proxi- Fredricks said. Shell Oil senior legal antitrust counsel. The mate cause test gives flexibility, but said it is ... discussion was moderated by Paul Hastings not a new concept invented by the DOJ. The antitrust division is “not always advo- partner Jeremy Evans and was part of a cating for a maximalist reach” of the antitrust “Proximate cause should be familiar to everyone conference hosted by George Washington laws, he said, and “oftentimes we are helping who went to a US law school,” he said. It is University law school and Concurrences. The to describe the limits, and sometimes we a prominent part of torts liability and other event ended yesterday.

Courts are wrong audience for comity arguments, says Judge Wood By Pallavi Guniganti

Judge Diane Wood, formerly an attorney at The decision to prosecute a foreign corpo- “If you look at 130 antitrust laws, it’s hard to the Department of State and a deputy assis- ration represents the executive branch’s decision find one that relies the way US does on private tant attorney general in the Department of that such prosecution will further US interests, enforcement,” she said of the many jurisdic- Justice’s antitrust division, gave the keynote Judge Wood said, and it is not for the court tions that have developed competition regimes. to a conference on the extraterritoriality of to consult with interested entities about whether “There has never been a time the internatio- antitrust law in the US and abroad. the case should have been brought despite nal dimensions have been more interesting.” Calling the Foreign Trade Antitrust Improve- other governments’ opposition. Judge Wood acknowledged that recent Supreme ments Act “a miracle of bad drafting,” she “I’m not fond of the word ‘never’, but it is Court decisions may have increased the diffi- discussed how the courts had interpreted its extremely difficult to ask a court to be the culty of private enforcement, such as the requirement that foreign commerce have a institution that administers comity,” she said. Twombly ruling that required antitrust plaintiffs direct, substantial and foreseeable effect in to make a “plausible” factual claim in their the US to be caught by the US antitrust laws. ... complaints. She said Justice David Souter’s ... The Illinois Brick Supreme Court precedent choice of that word was “unfortunate” because prohibiting such lawsuits is well established, the court is not supposed to determine litigants’ She said non-judicial actors can urge Congress credibility on a motion to dismiss. to change laws, and the executive branch and but it does not apply to government litigation, Federal Trade Commission to exercise prose- which is why the DOJ could prosecute AU ... cutorial discretion due to foreign relations, and Optronics criminally for price fixing. Judge Wood spoke at a conference held at keep litigation from occurring in the first place. If this difference puts a wedge between govern- George Washington University law school, which But once a case shows up in federal court, ment and private enforcement, Judge Wood was co-sponsored by Concurrences, Axinn she said, judicial comity is “a very difficult thing said, it was Illinois Brick and not the FTAIA Veltrop & Harkrider, O’Melveny & Myers and to give reality to.” that created the wedge. Paul Hastings. The event ended yesterday.

Read the full articles on Global Competition Review.

10 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE INTERVIEWS

INTERVIEW WITH JAMES RILL > BY JOHN DEQ. BRIGGS THE ANTITRUST ENFORCEMENT ACTIONS OF ONE JURISDICTION VERY OFTEN AFFECT CONDUCT WELL BEYOND ITS BORDERS. THIS SITUATION IS PARTICULARLY RELEVANT TO THE INTERSECTION OF COMPETITION LAW ENFORCEMENT AND INTELLECTUAL PROPERTY.

> Concurrences Review, August 26, 2015

John DeQ. Briggs – Axinn, Veltrop & Harkrider – has interviewed James Rill – Baker Botts. They both participated on the panel "Challenges to International Comity?".

John Briggs: What international and other John Briggs: What efforts, if any, have matters affecting the extent of US antitrust developments have elevated concerns the United States enforcement agencies policy and US commercial interests. with the application of comity principles made to address concern with global to competition enforcement? application of comity principles? John Briggs: Does comity play, or should it play, a different role in antitrust cases James Rill: Comity principles have certainly James Rill: The United States enforcement than in other cases? attracted increasing attention and, indeed, agencies have made significant efforts to significance over the past few years. Part of promote international acceptance of comity James Rill: I would not say that different the reason is, of course, important court deci- principles. First, bilateral cooperation agree- comity principles should apply to competitive sions. A more overarching reason, however, ments between the enforcement agencies matters. The fact is, however, that cross- in my opinion, is the dramatic expansion of and their counterpart agencies have incor- border issues are very often particularly impli- not only competition regimes around the world, porated detailed elements of traditional comity. cated in competition matters. World trade but the increased enforcement activity, parti- For example the US-EU antitrust cooperation issues regularly involve elements of antitrust cularly in Asian and Latin American jurisdictions. agreement of 1991 contains a precise listing. law and policy. The antitrust enforcement Relatively recent entrants into the antitrust Second, the International Competition Network actions of one jurisdiction very often affect field, many of these jurisdictions reach out provides a forum for the cross-fertilization of conduct well beyond its borders. This situa- for both substantial and procedural experience views respecting not only substance but of more mature antitrust institutions. Their process and an opportunity, not yet fully realized, tion is particularly relevant to the intersection support and dissemination of experience is, for the mutual respect of sister agencies’ of competition law enforcement and intellec- or could be, substantially enhanced by the interests in the spirit of comity. A third oppor- tual property. Accordingly, through different global adoption of the sound principles of tunity sometimes, but not so frequently exer- basic principles might not apply, the need for traditional comity. Challenges remain in advan- cised might be the agencies’ direct commu- strong adherence to comity policy is essen- cing this goal, however. nication with their foreign counterparts in tial to sound competition enforcement.

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 11 INTERVIEW WITH JUDGE DOUGLAS GINSBURG > BY IAN SIMMONS

...IT IS UNCLEAR WHETHER THE GOVERNMENT MAY SECURE A CRIMINAL CONVICTION AGAINST A FOREIGN DEFENDANT ON THE THEORY THAT ITS CONDUCT OVERSEAS CAUSED A DIRECT, SUBSTANTIAL, AND REASONABLY FORESEEABLE EFFECT ON DOMESTIC COMMERCE.

> Concurrences Review, September 1, 2015

Ian Simmons – O’Melveny & Myers LLP – has interviewed Judge Douglas Ginsburg - US Court of Appeals for the District of Columbia Circuit. They participated on the panel "Good vs. Bad Extraterritoriality: What is the Desirable Level of Government Enforcement?".

12 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE Ian Simmons: The courts have divided United States under these circumstances reasonably foreseeable effect on domestic over how to interpret several provisions because the statute requires only that the effect commerce. Liability attaches only if the effect of the FTAIA. What are some of the most of the unlawful conduct give rise to “a claim” of the conduct “gives rise to a claim” under important issues confronted by the courts under the Sherman Act, not that it give rise to the Sherman Act, and the word “claim” is in applying the Act and why has it been “the claim” filed by the plaintiff. Because an ordinarily used to denote a civil action for so difficult to reach a consensus? American purchaser would have “a claim” against damages rather than a criminal prosecution. the foreign cartel, the courts held the foreign The Ninth Circuit nevertheless affirmed the Douglas Ginsburg: The FTAIA begins with plaintiff, too, may file its claim in a US court. conviction of a corporation and its executives a straightforward rule: the Sherman Act does The Supreme Court disagreed, however, holding for their role in the LCD panel cartel. not apply to “conduct involving trade or that a foreign plaintiff may not sue in the United commerce ... with foreign nations.” 15 U.S.C. States to recover for harm that is “independent” Ian Simmons: Several courts have recently § 6a. The Act then creates three exceptions, of the harm inflicted upon the American market. held the FTAIA does not limit the subject one of which applies the Sherman Act to matter jurisdiction of the federal courts, foreign conduct that has a “direct, substantial, A recent decision by the Seventh Circuit but rather sets forth substantive elements and reasonably foreseeable effect” on domestic involving the LCD panel cartel illustrates the that must be satisfied in cases subject commerce if that effect “gives rise to a claim” importance of the requirement that the effect to the Act. How can results vary depen- under the Sherman Act. Id. of the defendant’s conduct “gives rise to a ding upon whether the statute affects claim” under the Sherman Act. Motorola, an The courts have understandably struggled the court’s subject matter jurisdiction? American company, purchased from its Chinese with how to interpret each of these ambiguous subsidiaries smartphones that included LCD Douglas Ginsburg: Into the early 2000s the phrases, beginning with whether conduct has panels the subsidiaries had bought from courts believed the FTAIA deprived them of a “direct” effect on domestic commerce. members of the cartel. The court concluded jurisdiction to hear cases not subject to one Consider, for example, the recent case of the Motorola could not recover from the foreign of its exceptions. Starting in 2006 the Supreme LCD panel cartel: Manufacturers in Korea cartel members because it was an indirect Court set out to clarify the distinction between and Taiwan fixed the price of LCD panels they purchaser of the LCD panels. US antitrust a statute that deprives the courts of jurisdic- sold to companies in China and elsewhere, law prohibits an indirect purchaser from reco- tion and one that defines the claim. E.g., which then installed the panels in computers vering under these circumstances, and the Arbaugh v. Y&H Corp., 546 U.S. 500, 511-12 and smartphones they sold in markets around effect of the defendants’ conduct therefore (2006). As a result of these decisions, several the world, including the United States. How did not “give rise to a claim” under the Sherman courts have reversed course and held the does a court determine whether the cartel’s Act. It is up to the subsidiaries of Motorola requirements in the FTAIA are elements of a conduct had a “direct” effect on the American to seek relief under the laws of the countries claim under the Sherman Act rather than market? The Ninth Circuit Court held an effect in which they are located or do business. jurisdictional prerequisites. The plaintiff will is “direct” only if it “follows as an immediate not prevail unless it can show its claim is not consequence of the defendant’s activity.” The court’s reasoning is in tension with the barred by the FTAIA, but it has a greater Other circuits have made it easier for a plain- recent decision of the European Court of opportunity to do so than if the statute is tiff to sue a foreign cartelist in the US, holding Justice upholding a fine assessed against a interpreted as a jurisdictional requirement. the statute requires only “a reasonably proxi- member of the same cartel. InnoLux, Case The court must accept as true the factual mate causal nexus” between the unlawful C-231/14P (July 9, 2015). The court held allegations in a plaintiff’s complaint, which will conduct and the effect on the American market. the European Commission may impose a fine survive a motion to dismiss if its claim for relief that accounts for the harm inflicted upon The courts also divided over what it means is merely “plausible.” If the plaintiff’s claim is European purchasers of televisions and other for the effect of unlawful conduct to “gives not implausible on its face, then in order to finished products that included the LCD panels rise to a claim” under the Sherman Act. bolster its factual allegations, the plaintiff may if the finished product was sold by a member Consider, for example, a foreign purchaser engage in discovery—which is notoriously of the same corporate group, such as a subsi- that bought a product at a price inflated by expensive for defendants in antitrust cases. diary, that manufactured the panel. a foreign cartel. May it file suit in a US court Therefore, in a court that views the FTAIA as and avail itself of the American antitrust laws, Finally, it is unclear whether the Government a substantive rather than as a jurisdictional which are more attractive to private plaintiffs may secure a criminal conviction against a limitation, a defendant may be more likely than are those of most other countries? Some foreign defendant on the theory that its conduct to settle than to endure the prospect of courts allowed a foreign plaintiff to sue in the overseas caused a direct, substantial, and protracted litigation.

EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE - 13 TESTIMONIALS

This conference brought together many of the Fantastic conference, as always.” practitioners and present and former government MARK S. POPOFSKY, Partner, Ropes & Gray. lawyers who have been most involved in the leading cases raising issues under the FTAIA. I learned a great deal from them.”

DOUGLAS GINSBURG, Judge, US Court of Appeals for the District of Columbia Circuit; Professor, George Mason University School of Law.

The Program was stimulating and especially timely Judge Diane Wood’s keynote remarks se a perfect Speaking as an academic economist, it was a highly stage. It was a privilege to be on the comity and stimulating examination of the practical implications convergence panel with such icons of international of extraterritoriality with a broader view on the design antitrust as Fred Jenny. The topic has immediate of appropriate judicial standards. I left feeling both currency as more nations undertake competition invigorated and challenged by these increasingly enforcement and grapple with the elements of important antitrust issues.» procedural fairness. Congratulations on an outstanding JOSEPH HARRINGTON, Professor, The Wharton School, program.” University of Pennsylvania. JAMES RILL, Senior Counsel, Baker Botts.

As one of the former heads of DG Comp stated, This was one of the best antitrust seminars when “faced with global problems we…design truly I’ve attended: over a few hours a star-studded group global solutions.” This is precisely the situation in an of panellists crisply gave nuanced presentations in a ever-changing and dynamic area of competition challenging area of antitrust law. Who could ask for infringements. Public authorities throughout the world more than this?” are actively engaged in price-fixing, mergers and acquisitions and abuse of dominant power investigations. DAVID R. WINGFIELD, former Head of the Competition law Private enforcement is an integral part of individual section of the Canadian Department of Justice and Barrister at Fountain Court Chambers, London. victims’ rights for full enforcement for many of these unlawful activities. As the public bar grows, so will the private bar, and there will need to be rules and processes to address effective access to justice in this

field. The Concurrences + GWU Law Extraterritoriality of Antitrust Law Conference was a perfect forum in which this emerging field was explored.”

MICHAEL HAUSFELD, Chairman, Hausfeld.

Concurrences has gained a well deserve d reputation for organizing on both sides of the Atlantic and in Asia lively conferences and debates on the most important cutting edge antitrust topics among highly knowledgeable specialists. This contribution to the elaboration and the dissemination of new ideas in antitrust is invaluable. The very successful conference organized by Concurrences with George Washington University Law school on Extraterritoriality of Antitrust law in the US and Abroad at a time when high profile public and private enforcement cases in Europe and in the United states raise complex issues regarding the boundaries of national jurisdictions, the application of the principle of comity and the prospects for internatio- nal cooperation is an excellent example of the ability of Concurrences to stimulate antitrust thinking.”

FRÉDÉRIC JENNY, Chairman, OECD Competition Commission.

14 - EXTRATERRITORIALITY OF ANTITRUST LAW IN THE US AND ABROAD: A HOT ISSUE Antitrust Writing Board Awards 2016

Douglas H. GINSBURG, George Mason University Frédéric JENNY, OECD Competition Committee William E. KOVACIC, George Washington University Law School Andreas MUNDT, Bundeskartellamt - ICN Edith RAMIREZ, Federal Trade Commission Stanley WONG, Hong Kong Competition Commission Joshua WRIGHT, George Mason University Law School

Business Steering Committee

Andrea APPELLA, 21st Century Fox Rosie LIPSCOMB, Google Timothy BOYLE, Eaton Corporation Jenni LUKANDER, Nokia Marc BROTMAN, Pfi zer Robert MAHNKE, PayPal Charles CAVALLO, Tesoro Tilman MAKATSCH, Deutche Bahn Olaf CHRISTIANSEN, Bertelsmann Gabriel MCGANN, The Coca-Cola Company Danielle CLARK, Hewlett-Packard James MURRAY, Intel Anna ROSA, SanDisk Gil OHANA, Cisco Martin DAJANI, Etihad Airways Johanne PEYRE, Pearson Ben GRAHAM, AB In-Bev Anne RILEY, Shell International Wolfgang HECKENBERGER, Siemens Greg SIVINSKY, Microsoft Mathew HEIM, Qualcomm Abigail SLATER, Internet Association Camilla HOLTSE, Maersk Dominique SPEEKENBRINK, ABB Dina KALLAY, Ericsson Suzanne WACHSSTOCK, American Express Gail LEVINE, Verizon

Academic Steering Committee

Caron BEATON-WELLS, Melbourne Law School Joseph HARRINGTON, Wharton School, William PAGE, Levin College of Law Margaret BLOOM, King’s College London University of Pennsylvania Simon ROBERTS, University of Johannesburg Michael CARRIER, Rutgers Law School Angela HUYUE ZHANG, King’s College London Daniel RUBINFELD, New York University School of Law Andy CHEN, Chung Yuan Christian University Keith HYLTON, Boston University School of Law Marius SCHWARTZ, Georgetown University Daniel CRANE, University of Michigan Law School Alison JONES, King’s College London Tadashi SHIRAISHI, University of Tokyo Josef DREXL, Max Plant Institute Kai-Uwe KÜHN, University of Michigan Daniel SOKOL, University of Florida Levin College of Law Nicholas ECONOMIDES, NYU Stern Mark LEMLEY, Stanford Law School Florian WAGNER-VON PAPP, University College London Einer ELAUGHE, Harvard Law School Christopher LESLIE, Law School Spencer WEBER WALLER, Loyola University of Chicago Harry FIRST, New York University School of Law at University of California Xyaoie WANG, Chinese Academy of Social Sciences Amelia FLETCHER, University of East Anglia Ioannis LIANOS, University College London Mark WILLIAMS, University of Melbourne Eleanor FOX, New York University School of Law Leslie MARX, Duke University Wouter WILS, King’s College London Michal GAL, University of Haifa Ian McEWIN, University of Malaya Frank WOLAK, Stanford University Andrew GAVIL, Howard University School of Law Doug MELAMED, Stanford Law School Tim WU, Columbia Law School David GERBER, Kent College of Law, Chicago University Avivo NEVO, Northwestern University Huang YONG, UIBE www.awards.concurrences.com Antitrust Writing Awards 2016

Washington DC, 5 April 2016

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