July Antitrust Bulletin (2012)

Court Expands Extraterritorial Scope of U.S. Antitrust Law

On June 27, 2012, a federal appeals court issued an opinion that reversed prior precedent, extended the reach of federal antitrust law to foreign commerce in certain cases, and revived a class action brought by U.S. purchasers alleging that potash producers had operated a cartel outside the United States that had influenced the price of potash in the United States. Potash is a mineral used primarily in fertilizer. The world market for potash is highly concentrated and U.S. customers account for a high percentage of sales. In part of its opinion the court interpreted an import-related exception to the Foreign Trade Antitrust Improvements Act (FTAIA) - foreign trade or commerce that has "direct, substantial, and reasonably foreseeable" effects on U.S. domestic or import commerce - holding that "for FTAIA purposes, the term 'direct' means only a 'reasonably proximate causal nexus.'" In so holding, the court explicitly endorsed the U.S. Department of Justice's more expansive view of the foreign reach of federal antitrust law, which could give the Antitrust Division increased leverage in negotiating fines and doing volume of commerce calculations.

FTC Requirement of Full Divestiture in Acquisition of Rival Upheld

On July 11, 2012, a federal appeals court upheld a decision by the Federal Trade Commission (FTC) that Polypore's acquisition of its main rival, Microporous Products, "was reasonably likely to substantially lessen competition" in three relevant markets and that only complete divestiture would restore competition in those markets. Both...