One Response to “Exclusionary Conduct and the Extraterritorial Application of US Antitrust Law”

1. Paul Stancil Says:
   February 20th, 2006 at 4:51 pm

   One minor clarification/question (without wading into the Empagran/FTAIA swamp): It it wholly accurate to equate injury and overcharge in the cartel context? As a legal matter, perhaps, but only because of Illinois Brick and Hanover Shoe and the convenience-driven shortcutting they engender. In the typical direct purchaser case involving at least one further level of distribution, the legal harm is the amount of the overcharge, but the actual harm is and should be the lost profits, if any, suffered by the direct purchaser (typically because the passed-through overcharges carry with them some movement down the end-user’s demand curve). In fact, even in a low pass-through environment (e.g., price fixing on an essential component X of product Y, for which product A is a close substitute, where A does not contain X), the proper economic measure of harm is still lost profits, isn’t it? In that case, the producer of Y might find it difficult to pass through overcharges, because he’s competing with an X-free product A. He’s harmed by sales lost to A and the attendant drop in profits, not by the amount of the overcharge, right.

   This may all be semantics, insofar as you’re talking about the legal harm rather than the economic harm, but I think the distinction is ultimately critical in light of the Illinois Brick rule and the guestimation it explicitly endorses. But I’d tend to agree with your analysis as to extraterritoriality and exclusionary conduct as the most likely extrapolation of current antitrust doctrine into that context.

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