THE Department of Justice is studying the possibility of stretching the jurisdiction of United States antitrust laws outside US borders to include collusion to exclude US exports. Although the Justice study is just beginning, James Rill, assistant attorney general for antitrust, says the review will be complete in a few months. One of the reasons for the study is to determine if the Bush administration needs to submit any legislation to Congress to clarify US antitrust laws.
From the tone of Mr. Rill's comments, made Monday at a press briefing, it appears there is a strong likelihood that the Justice Department will follow through with some lawsuits.
``We intend to use the full reach of the law to be sure US export opportunities are not impaired or restricted by violations of the US antitrust laws,'' Rill says.
Rill's decision caught other governmental agencies by surprise. Ambassador Linn Williams, deputy US trade representative, indicated he was unaware of the initiative. A spokeswoman at the State Department said Rill's move was news as well.
The Justice move follows an agreement with the Japanese last week to enforce their own antitrust laws. The Japanese said they will prosecute more criminal cases and impose higher fines. Rill was part of the US team that won these agreements. The Japanese Embassy said it was unaware of the new Justice Department study.
Antitrust experts are generally pleased with Rill's decision. James Miller III, a former chairman of the Federal Trade Commission, says, ``It's a great idea, and if it's successful it could work to open up some markets for US sellers.''
William E. Perry, leave in initial a former attorney with the International Trade Commission, says he is surprised the government has not tried to use the antitrust statutes before. ``It is a tactic that is long overdue,'' says Mr. Perry, now with the law firm of Skadden, Arps, Slate, Meagher and Flom. In fact, Perry says the law could be extended to include price fixing on imports as well.
A major reason that former US attorneys have not tried to enforce antitrust laws abroad is the difficulty of getting evidence. Charles Rule, Rill's predecessor at the antitrust job, says, ``There are all kinds of allegations of these kinds of cartels, but actual evidence that will stand up in court is near to impossible to get.''
The US would have to rely on foreign governments to obtain much of the information, says Mr. Rule, now with the law firm of Covington and Burling. It also can be very expensive - the government has to hire scores of translators because few of the documents are in English.
In the past, the US has also been cautious about filing charges for foreign-policy reasons. ``It can be a delicate issue when the two governments deal with each other,'' says William Kovacic, a law professor at George Mason University. Britain, for example, passed a statute which limits the ability of American plaintiffs to get treble damages against British companies.
Although the Justice Department study is not aimed at a specific country, Japanese companies could find themselves targeted. In Japan, ``dango,'' or bid rigging, takes place.
In fact, last year the Japanese Fair Trade Commission - the equivalent of the US FTC - investigated 140 companies to see if they were rigging bids at the Yokosuka Naval Base in Japan. The JFTC found that winning bids were routinely rotated among cartel members. The JFTC charged 70 companies which agreed to pay a combined fine of $2 million.
Later, 90 of the companies agreed to pay the US $33 million.
On Feb. 14, the JFTC raided 20 Japanese corporate offices in Tokyo, including that of a NEC subsidiary, to investigate bid rigging on telecommunications maintenance contracts at US military bases, including Yokota Air Force Base.
Sen. Frank Murkowski (R) of Alaska has charged that this bid rigging is coming at the expense of US firms that do not have the chance to get the contracts. In a letter to President Bush, Senator Murkowski said Japanese general contractors have warned their subcontractors not to work for US firms or they will be blacklisted.
But Japanese firms could find this type of action very costly to their US subsidiaries. If found guilty of antitrust actions in the US, the companies would have to pay treble damages.