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WT/DS162/R/Add.1 Page 38

engage in exclusionary and discriminatory conduct in international telecom markets.120  Similarly, in Silicon Graphics, Inc., the Federal Trade Commission approved a consent order settling allegations in an accompanying complaint that a proposed acquisition would violate Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act.  The complainant alleged, inter alia, that the proposed acquisition would facilitate the unilateral exercise of market power through price discrimination by the acquiring firm in the world-wide market for entertainment graphics workstations.121  As these cases demonstrate, dealing with international pricediscrimination is not an aberration from other antitrust concerns.


The United States submits that many other Members' antitrust laws have a similar international jurisdiction for example, the antitrust Articles of the Treaty of Amsterdam.  The United States recognizes that Japan for many years considered its Anti-Monopoly Act to have no international scope, but the United States understand that that policy is now changing.  Japan will now apply the Act to some conduct beyond its borders, such as the use of exclusive dealing contracts by foreign suppliers and foreign mergers with significant consequences in Japan.  There is no obvious reason why antitrust rules regarding price discrimination or predatory conduct should stop "at the water's edge" either.  Indeed, the United States reminds the Panel that on its web site the Japan Fair Trade Commission defines "unfair trade practices" to include "dumping".  It is interesting that in trying to explain away the use of the word "dumping" by the Fair Trade Commission, Japan now apparently concedes that the word "dumping" may be used in a context that does not fall within Article VI and the Antidumping Agreement.    


Japan disagrees with the US contention that "Japan for many years considered its AntiMonopoly Act to have no international scope, but the policy is now changing".  This is not only mischaracterizing Japan's position, but irrelevant.  Japan has never asserted that Japan's AntiMonopoly Act has no international dimension.122

5. The historical context and legislative history of the 1916 Act


According to Japan, the historical context and legislative history of the 1916 Act show that Congress sought to enact an antidumping law to address the commercial problem of dumping, i.e. international price discrimination.123  US government officials, legislators and industries feared that the end of World War I would wreak injury on US companies and industries as foreign companies and industries sought to revive themselves and recapture or increase their former share of the US market through unfair methods of competition, including dumping.  Some Senators and Congressmen proposed higher tariffs to fend off the threat.  The Wilson Administration advocated free, but fair, trade and proposed antidumping legislation instead.

120 The United States refers to United States v. Sprint Corporation, Competitive Impact Statement (D.D.C. 1995), available at "www.usdoj.gov/atr/cases/".

121 The United States refers to Silicon Graphics, Inc., 120 F.T.C. 928, 930, 933 (1995).

122 In response to a question of the United States regarding whether antitrust laws may apply to conduct outside their borders but affect competition inside their borders, Japan notes that some WTO Members' antitrust laws may apply to conduct that occurs outside their borders but affects competition inside their borders. However, any so-called "antitrust" law that addresses anti-competitive international business practices, as that conduct is also regulated by Article VI of the GATT 1994 and the AntiDumping Agreement, must be consistent with Article VI of the GATT 1994 and the AntiDumping Agreement if the relevant government is a WTO Member.  Thus, Article VI of the GATT 1994 and the AntiDumping Agreement apply to the 1916 Act.  Even though the United States is now attempting to characterize the 1916 Act as a pure antitrust statute (despite many official remarks to the contrary), the 1916 Act is inconsistent with these obligations as Japan has demonstrated. However, Japan does not deny the possibility that there may be laws addressing anti-competitive international business practices to which Article VI of the  GATT 1994 and the AntiDumping Agreement might not apply.  No such laws are at issue in the present case.

123 Japan refers to, e.g., Geneva Steel, Op. Cit., pp. 1223-24.

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