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WT/DS162/R/Add.1 Page 96

provide for meeting competition and cost justification defences, "[t]hese considerations would appear relevant to predatory intent and thus should implicitly be included in the 1916 Act".322  In particular, if the defendant charged the prices at issue with the intent of meeting competition in the form of comparable prices charged by other sellers, it is unlikely that a court would conclude that the defendant nevertheless intended to restrain or monopolise the line of commerce at issue, or intended to injure, destroy, or prevent the establishment of an US industry.  Similarly, if the defendant charged the prices at issue in order to respond to changing market conditions, such as the deterioration of perishable commodities, it is unlikely that the requisite level of predatory intent could be established.  In addition, if the defendant charged the prices at issue in order to account for cost savings, and in effect to pass those cost savings on to consumers, it is unlikely that a court would nevertheless conclude that the defendant acted with predatory intent.  Indeed, in Geneva Steel, the court explained that one reason why it is difficult to prove the requisite intent under the 1916 Act is that "evidence of normal pricing cuts […] would be insufficient to establish liability under the 1916 Act".323


In short, the United States considers that the affirmative defences to which Japan refers, which are available to defendants in RobinsonPatman Act cases, are also, in effect, available to defendants in 1916 Act cases.  The evidence establishing these defences does not, however, have to be presented as a defence.  It instead can be presented to rebut any evidence the plaintiff may otherwise have on the subject of the defendant's intentions in charging the prices at issue.


Japan replies that, as a factual matter, the US arguments are incorrect.  Evidence which establishes the "meeting competition" or "changing conditions" defences under the Robinson-Patman Act will not be sufficient to negate the "intent requirement" under the 1916 Act.  In addition, the US assertion is mere speculation.  There is a huge difference between explicit provision of stipulated defences under the Robinson-Patman Act and the speculative possibility of asserting defences under the 1916 Act.


The United States maintains its view that the affirmative defences which are available to defendants in RobinsonPatman Act cases are also, in effect, available to defendants in 1916 Act cases.

(e) The conduct subject to penalties


Japan asserts that the conduct subject to penalties under the 1916 Act exceed those conduct under the Robinson-Patman Act.  Both the 1916 Act and US antitrust laws (through section 4 of the Clayton Act) provide for treble civil damage actions and recovery of the cost of the suit, including reasonable attorney's fees.  However, the 1916 Act provides for all types of violations criminal fines of up to $5,000 or imprisonment not more than one year, or both.  Section 3 of the Robinson-Patman Act, in contrast, provides the same penalties only for a limited subset of price discrimination practices that overlap with Section 2(a) of the Robinson-Patman Act and for "selling at unreasonably low prices" for the purpose of destroying competition or eliminating a competitor.324


According to Japan, the application by the US of criminal penalties to a broader range of foreign than domestic conduct is inconsistent with Article III:4 of the GATT 1994.


The United States recalls that the RobinsonPatman Act, like the 1916 Act, contains a criminal liability provision.  In brief, Section 3 of the Act, 15 U.S.C. §  13a, prohibits

322 The United States refers to B. Hawk, United States, Common Market and International Antitrust (19961 Suppl.), p. 357.

323 Geneva Steel, Op. Cit., p. 1220.

324 The United States refers to 15 U.S.C. § 13a (1997).

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