U.S. expands power to enforce antitrust laws Companies and cartels overseas are target of move

April 04, 1992|By Ronald J. Ostrow | Ronald J. Ostrow,Los Angeles Times

WASHINGTON -- In an effort to defend U.S. business interests overseas, the Department of Justice amended its antitrust enforcement policy yesterday to enable it to challenge foreign businesses that boycott U.S. products, rig bids or otherwise block access to their markets.

Although department officials said that the shift was "not aimed at particular foreign markets," the Japanese Foreign Ministry immediately objected to the move on grounds that it is "not permissible under international law."

The change is a response to growing concern that foreign business interests, particularly in Japan, have benefited from relatively unrestrained access to U.S. markets but have prevented U.S. companies from enjoying the same entry to their markets.

Since 1988, the Department of Justice's antitrust division has followed an enforcement guideline barring it from challenging anti-competitive conduct in foreign markets unless it could show direct harm to U.S. consumers. That requirement has been removed.

"Applying the antitrust laws to remove illegal barriers to export competition makes sense as a matter of law and policy," said Attorney General William P. Barr, explaining the policy change. "Our antitrust laws are designed to preserve and foster competition, and in today's global economy competition is international."

To assert legal jurisdiction over foreign business interests, however, the government will have to show that the target company or individual "had a physical presence in the United States" sufficient to bring it under the reach of U.S. courts, said James F. Rill, assistant attorney general for antitrust.

In the case of Japan, the policy could be applied to a wide range of commercial interests with manufacturing operations, sales outlets or other business connections in the United States,including automakers and electronics companies.

The Japanese Foreign Ministry said in a statement that it had objected repeatedly to the policy, most recently in a March 25 letter to Mr. Barr and Secretary of State James A. Baker III.

"The position of the government of Japan on this matter is that such application of the U.S. antitrust law would constitute extraterritorial application of domestic laws which is not permissible under international law," it said. "It is regrettable that such a policy change was made in spite of Japan's repeated appeals."

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