Foreign Price-Fixing Conspiracies

By Leslie, Christopher R. | Duke Law Journal, December 2017 | Go to article overview

Foreign Price-Fixing Conspiracies


Leslie, Christopher R., Duke Law Journal


ABSTRACT

Although price-fixing agreements remain per se illegal in the United States, courts have undermined the per se rule against price fixing by making it harder for plaintiffs to prove that such an agreement exists. For example, most courts that have considered the issue have held that defendants' price-fixing conduct in a foreign market is not probative of price fixing in the United States. This Article examines the relationship between foreign and domestic price-fixing activity and shows how expanding a price-fixing cartel from foreign markets into the United States benefits the cartel by reducing the risk of arbitrage, stabilizing the cartel, and concealing the conspiracy from global antitrust authorities. The Article then takes the insights from the empirical and theoretical cartel literature and applies them to antitrust doctrine in order to demonstrate why defendants' overseas price-fixing arrangements are relevant to proving the existence of an agreement in litigation claiming that the same defendants fixed prices in the American market. Finally, the Article encourages courts to better understand how international price-fixing cartels operate.

TABLE OF CONTENTS

Introduction
I. Price-Fixing Agreements and U.S. Antitrust Law
II. Judicial Treatment of Conspiracies to Fix Price in Foreign
       Markets as a Plus Factor
       A. Foreign Price Fixing Considered Irrelevant Unless
          Illegal
       B. Foreign Price Fixing Discounted as Disconnected
III. The Role of Agreements to Fix Prices Abroad in American
       Price-Fixing Conspiracies
       A. The Difficulty of Price Fixing and the Fragility of
          Cartels
       B. Foreign Conspiracies and Cartel Creep
          1. Foreign Conspiracies and the Creation of Trust
          2. Foreign Conspiracies and Coordination Problems
          3. Foreign Conspiracies and Cartel Enforcement
          4. Summary
       C. Foreign Conspiracies and the Motive To Fix Prices in the
          United States
IV. The Legal Significance of Foreign Price Fixing
      A. Price Fixing Outside the United States as a Plus Factor
      B. How Courts Mishandle Evidence of Foreign
         Conspiracies
         1. Legality as Irrelevant
         2. Connecting the Disconnect
         3. Confusing Plus Factors with Direct Proof
         4. The Discovery and Admissibility of Evidence of
            Defendants' Foreign Price Fixing
Conclusion

INTRODUCTION

For most of the first half of the twentieth century, price-fixing cartels controlled international trade in important commodities, from steel and aluminum to coffee and sugar. European countries did not have antitrust laws and European governments largely supported the efforts of their national companies to participate in international cartels. These cartels, after all, generated large profits for their nations' firms and transferred enormous wealth from consumers abroad to producers at home. Because the Sherman Antitrust Act of 1890 condemned price fixing, American firms could not legally join these international cartels.

Yet international cartels insinuated themselves into the American marketplace, often with the involvement of U.S. firms. Despite the risk of antitrust liability, many American firms participated in international cartels during the interwar period. (1) During this era, American firms played important roles in European-based international cartels in several ways: illegally, directly or through European parent companies; through export cartels; and "informally, through an 'understanding' with a formal cartel." (2) The Sherman Act made it harder to bring American firms into the fold, but many international cartels, such as the international steel cartel, persevered and convinced their American counterparts to join them. (3) European companies with U.S. subsidiaries often instructed their American divisions to follow the cartel policies of their European-based parents. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Foreign Price-Fixing Conspiracies
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.