Recent decisions interpreting the Foreign Trade Antitrust Improvements Act (FTAIA) are bringing the courts into closer alignment on the extraterritorial reach of the U.S. antitrust laws, which has been the subject of substantial debate for years. While the trend seems to be toward more expansive extraterritorial reach, important questions about the scope of the FTAIA remain open.
The FTAIA, which applies to both criminal and civil antitrust claims, governs when federal antitrust laws apply to alleged anticompetitive conduct occurring outside the U.S. The FTAIA provides that the Sherman Act shall not apply to conduct involving trade or commerce (other than import trade or commerce) with foreign nations unless the “domestic effects” exception is met. Under that exception, the Sherman Act applies to non-import trade or commerce with foreign nations when the foreign conduct both has a “direct, substantial and reasonably foreseeable” effect on U.S. commerce and gives rise to an antitrust claim.