While many details of the extraterritorial application of the US antitrust laws are still very much subject to debate, the basics are relatively straightforward, if one strips away a number of potentially confusing concepts. Since Alcoa (1945), the most important jurisdictional trigger is the effect of the anticompetitive conduct on US commerce. In price fixing cases, the effect is identical to the harm suffered by the plaintiff. In other words, the overcharge (= harm) is the price effect. Why is that important? Because the harm is geographically tied to the customer, i.e., wherever the customer is located at the time of the purchase, that’s where the harm and the anticompetitive effect occur. Thus, it is misleading to analyze a foreign cartel problem as follows:

The conspiracy had price effects both in the US and in Germany, i.e., prices were inflated in both territories. I understand that customer C, based in the US, can recover for goods that he purchased in the US. But can he also recover for goods that he ordered from Germany?

In this example, any price effects “in Germany” are entirely irrelevant. The harm, and the effect, occur where the customer is located: in the US. The above analysis incorrectly suggests that the concept of “harm” and “effect” can somehow be divorced from each other. (Of course, not every harm automatically qualifies as a jurisdiction-triggering effect. For example, in some instances, the harm must be significant, direct, and reasonably foreseeable.) Essentially, there are only five basic constellations, illustrated below in the context of a hypothetical price-fixing conspiracy (= conduct) between A and B to the detriment (= effect and harm) of customers C and D.

1. As a result of A’s and B’s domestic price fixing (= conduct), C, a domestic buyer, pays inflated prices (= harm = effect). C can sue for damages under §1 of the Sherman Act and §4 of the Clayton Act.
2. As a result of A’s and B’s foreign price fixing, C, a foreign buyer, pays inflated prices. If that’s all, then C has no standing to sue in the US.
3. As a result of A’s and B’s foreign price fixing, C, a domestic buyer, pays inflated prices. C can sue for damages under §1 of the Sherman Act and §4 of the Clayton Act, provided that C’s harm (= effect) was “direct, substantial, and reasonably foreseeable.” That’s the law since Alcoa (1945) and the FTAIA.
4. As a result of A’s and B’s domestic price fixing, C, a foreign buyer, pays inflated prices. If that’s all, then C has no standing to sue in the US. Export cartels are exempt from US antitrust scrutiny under the FTAIA. (Why? Because the only politically relevant constituency in this situation are the domestic producers. The harmed foreign customers don’t vote in the US.)
5. This is the Empagran (2004) situation, which is a combination of (3) and (2). As a result of A’s and B’s foreign price fixing, D, a foreign buyer, pays inflated prices. But D is not the only one harmed by the cartel. C, a domestic buyer, also pays inflated prices. In that situation, does D have standing to sue in the US for its (foreign) harm? The answer to this question is still subject to controversy, but a conservative answer is: “Yes, provided that harm to C (= domestic harm) is the proximate cause of D’s (foreign) harm.” (But not vice versa.)

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