Confusing Foreign Antitrust Laws Leaves U.S. Lawyers Scrambling
Anne Marie Squeo Bloomberg News, THE JOURNAL RECORD
WASHINGTON -- Last summer, the threat of a trade war hung heavier over the Atlantic than the humidity. The U.S. warned European officials: think twice before derailing Boeing's $15 billion acquisition of rival airplane maker McDonnell Douglas.
The confrontation, ultimately resolved without embargoes and tariffs, is symptomatic of a growing phenomenon in today's global economy, antitrust and trade experts say. As U.S. companies expand overseas, they are encountering more red tape as nations big and small step up enforcement of antitrust rules and try to protect firms on their home soil.
That leaves American firms to deal with a myriad of countries whose laws and cultures are at odds with the U.S. That likely will mean mounting legal bills to overcome new bureaucratic hurdles in countries with few traditional guideposts. "It's a nightmare just knowing every place in the world where you've got to file," said Washington antitrust attorney Marc Schildkraut. "Some of these countries have antitrust statutes and they don't even know what they mean." Countries most people couldn't find quickly on a map -- Moldova, Latvia, Gabon -- now have antitrust or competition laws, and U.S. companies must adhere to them. About 70 countries have such laws, with more than half requiring mandatory review of acquisitions and joint ventures. "And there are at least another 15 to 20 countries actively considering laws themselves," said William Kovacic, a law professor at George Mason University. He was interviewed recently by telephone from Benin where he was helping the government craft its own competition law. The irony is not lost on U.S. officials. American antitrust laws are the world's second oldest -- Canada beat the 1890 Sherman Antitrust Act by one year -- and U.S. enforcers are by far the most aggressive antitrust cops on the global beat. They've targeted foreign companies for years and have badgered other countries to be more diligent. Many of the new foreign laws follow the European model, adding to the confusing hassles for U.S. firms, antitrust attorneys said. Policies in the U.S. and Europe have different goals. In the U.S., antitrust officials can't file an antitrust suit simply because an acquisition would hurt a company's competitor. There must be some direct impact on American consumers that can be proven in court. "The U.S. jurisdictional thrust is consumer welfare, and in Europe the focus also is on producer welfare," said James Rill, a Washington lawyer and former head of the Justice Department's antitrust division. That certainly was the case with Boeing-McDonnell Douglas. European officials fought to protect Airbus Industrie, a European aircraft manufacturer, by forcing Boeing to scrap exclusive 20-year supplier agreements with three airlines unrelated to the purchase of McDonnell Douglas. Even after U.S. President Bill Clinton dispatched Justice Department antitrust chief Joel Klein to press U.S. concerns, European antitrust officials in Brussels wouldn't yield. Boeing, they argued, would dominate the world's aircraft market and have only one rival, Airbus. When Boeing eventually conceded, the Europeans claimed victory. "It will protect the interests of airlines purchasing aircraft in international markets and will thus be good for consumers," said European Commission President Jacques Santer at the time. …