AMERICAN ANTITRUST LAW does not travel well. The recent attempts of U.S. courts to reach across international borders to regulate the foreign operations of American companies -- and sometimes the foreign operations of foreign companies -- demonstrate that. The argument in favor of the practice is that it's necessary to control the activities, both competitive and anti-competitive, of the multi-national corporations. But the friction -- unsurprisingly -- rises when other governments, in particular in Western Europe and Canada, pursue national policies that openly conflict with American antitrust law. They frequently encourage -- and sometimes even require -- kinds of industrial cooperation that the United States regards as criminal conspiracy. In a pointed rebuke to the United States, the british government has now drafted legislation to shield companies in Britain from American courts.
The big and brilliant example is the Westinghouse uranium case -- a head-on collision between two different concepts of justice and public interest. Westinghouse had promised cheap fuel to its nuclear customers and, when the price shot up in the early 1970s, the company was badly hurt. It charged that it was the victim of a price-fixing conspiracy based in Canada.
The Canadian government replied that it was no conspiracy -- it was Canadian national policy to enforce a minimum price. American protectionism had driven the world price of uranium artificially low, the Canadians said (accurately), and they were acting to protect their own resources and their national interest from American exploitation.
But the Justice Department prosecuted the Gulf Oil Corporation, whose Canadian subsidiary was involved, and last year a federal judge fined it $40,000. Now, with far more money at stake, Westinghouse is in federal court in Chicago pursuing a civil suit against all of the companies that operated under the Canadian uranium scheme. The others are Australian, South African and British.
The British response is explicit. The bill now moving rapidly through Parliament not only would block any American attempt to subpoena evidence in Britain; if an American company were to get punitive damages against a British company, this bill would also provide that the British defendant could get compensation from the American company's British assets.
Especially in Europe, it is common for governments to promote industrial policies requiring mergers, division of product lines and markets, and pricing agreements. This is frequently done to create industries capable of competing with bigger and better established American companies. Americans have worked out their rules of competition at home, and are now trying to extend them into international commerce as sort of an afterthought. But to most Europeans and Canadians, competition mainly means international competition, with industry at home organized above all to meet the pressures of that unforgiving environment. The Sherman Antitrust Act is not a suitable instrument for the regulation of world trade. Maintaining international competition is the proper business of diplomats and negotiation, not federal judges and litigation.