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WT/DS162/R/Add.1 Page 99


Finally, in respect of Japan's complaints that the fact that the ongoing Geneva Steel and WheelingPittsburgh cases have compelled the defendants in both cases to incur the "expense and uncertainty" of litigation and that six of the nine defendants in the WheelingPittsburgh case have reached "outofcourt settlements" (presumably voluntarily), the United States argues that these two complaints have nothing to do with the issues at hand.  They are rather a product of the fact that if firms of one country choose to do business in another country, they must comply with the laws of that country, as well as their own.

(g) The requisite price differences and relative price levels


According to the United States, when it comes to establishing the requisite price discrimination as a function of both price differences and price levels relative to costs the 1916 Act treats foreign products more favourably than the RobinsonPatman Act treats domestic products, because it is more difficult to establish price discrimination that violates the 1916 Act than to establish price discrimination that violates the RobinsonPatman Act.


The United States argues, first, that the 1916 Act requires proof of a far larger number of illegal price differences imposed in a systematic way in order to establish liability.  In particular, the plaintiff must show that the defendant "commonly and systematically" made the sales prohibited by the Act.  By contrast, under the RobinsonPatman Act, liability can be established on the basis of as few as two consummated sales.336    


The United States further argues that the 1916 Act requires proof of a larger price difference than the RobinsonPatman Act in an absolute sense.  In particular, under the 1916 Act the plaintiff must establish that the Articles at issue are sold within the United States at a price "substantially less than actual market value or wholesale price of such Articles […] in the principal markets of the country of their production, or of other foreign countries to which they are commonly exported".


The United States notes that, by contrast, the RobinsonPatman Act simply requires a showing of a "cognizable" difference in price, which need only be greater than a de minimis difference.  Thus, for example, one circuit court of appeals recently held that a 2.38 per cent price difference provided a basis for liability under the RobinsonPatman Act.337  Such a small difference would hardly satisfy the requirement that the price be "substantially less" under the 1916 Act.  


The United States asserts, third, that even if the 1916 Act requirements with respect to price levels relative to costs are compared only to the corresponding requirements for establishing primary line liability under the RobinsonPatman Act and such an approach ignores the substantial and farreaching risk of liability for secondary line discrimination under the RobinsonPatman Act that domestic firms must confront under that statute the 1916 Act is more favourable to importers than the RobinsonPatman Act is to domestic firms.  Under the RobinsonPatman Act, the US Supreme Court has only stated that the plaintiff needs to "prove that the prices complained of are below an appropriate measure of the rival's cost".338  Lower courts, meanwhile, have not agreed on what the appropriate measure of a rival' s costs should be.  For example, while some courts have held  that the prices complained of need only be below average cost, other courts have held that they must be below average variable cost.

336 The United States refers to International Telephone & Telegraph Corp. et al., 104 F.T.C. 280, p. 417, citing E. Kintner, A RobinsonPatman Primer, 3d ed. (1979), p. 35.

337 The United States refers to Chroma Lighting v. GTE Products Corp., 19971 Trade Cas (CCH) ¶ 71,836 (9th Cir. 1997), para. 79,885.

338 The United States refers to Brooke Group, Op. Cit., pp. 22223.

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