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WT/DS162/R/Add.1 Page 49

"Representative Kitchin, explaining his bill at the outset of its consideration by the full House of Representatives, explained:

We believe that the same unfair competition law which now applies to the domestic trader should apply to the foreign import trader."175


The United States further notes that the Zenith III court also explained that, at the time of the enactment of the 1916 Act, "unfair competition" which also is the caption of the title under which the 1916 Act was enacted referred to the activities addressed by the antitrust laws of the era.  As the Secretary of Commerce, William Redfield, explained in 1915:

"'Unfair competition' is forbidden by law in domestic trade, and the Federal Trade Commission exists to determine the facts and takes steps to abate the evil wherever found. The door, however, is still open to 'unfair competition' from abroad which may seriously affect American industries for the worse. It is not normal competition of which I speak, but abnormal. […] If it shall pass beyond fair competition and exert or seek to exert a monopolistic power over any part of our commerce, we ought to prevent it."176


The United States points out that the Zenith III court ultimately concluded that it would be guided by the following principles when interpreting the 1916 Act:

"The principal lesson which we draw from the legislative history of the 1916 Act, viewed against the historical background of the first [Woodrow] Wilson Administration, is that the statute should be interpreted whenever possible to parallel the 'unfair competition' law applicable to domestic commerce.  Since the 1916 Antidumping Act is a price discrimination law, it should be read in tandem with the domestic price discrimination law, section 2 of the Clayton Act, which was amended by the RobinsonPatman Act in 1936.  And, in order to be faithful to the intention of Congress to subject importers to the 'same unfair competition law,' we should not interpret the 1916 Act to impose on importers legal strictures which are more rigorous than those applied to domestic enterprises."177


The United States notes that the Zenith III court's analysis was affirmed on appeal in 1983.178  In that opinion, the appellate court stated that the 1916 Act was enacted "to do with unfair competition" and the court then held that "we will interpret the Act in light of its motivating purpose."179


The United States recalls that, in 1986, the Third Circuit Court of Appeals again had an opportunity to consider the plaintiffs' 1916 Act claims in Zenith III when the case was remanded from the US Supreme Court.  Some background information is helpful to fully understand the Third Circuit's 1986 decision.


The United States points out that Zenith (and another US company named NEU) commenced litigation against Japanese television set manufacturers in the early 1970s, complaining of Sherman

175 Ibid., p. 1222 (footnote omitted by the United States) (quoting 53 Cong. Rec. App. 1938 (1916)) (emphasis added by the United States).

176 Ibid., p. 1219 (quoting Annual Report of the Secretary of Commerce 43 (1915).

177 Ibid., p. 1223 (footnote omitted and emphasis added by the United States).

178 The United States refers to In re Japanese Electronic Products Litigation II, Op. Cit.

179 Ibid., p. 325, n.4.  

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