to compete abroad and insure a flexible, efficient economy at home, we must insure the right of foreign firms to compete within the bounds of U.S. law. We at the Department seek to encourage vigorous competition by all firms within the U.S. economy. But that encouragement does not extend to any class of firms the prospect of less vigilant and effective antitrust enforcement. Foreign firms, like domestic ones, will not be discriminated against by antitrust enforcers; but when they participate in the U.S. economy, they must assume the responsibility of complying with U.S. laws, including the antitrust laws. On too many occasions, persons outside the United States have regarded that responsibility as a discriminatory or excessive burden. I believe that it is not. U.S. antitrust law is a set of rather broad principles that seek to preserve business freedom and promote efficiency. It is far less of a burden on a foreign firm than the hodge-podge of controls and restrictions that many countries impose on foreign firms simply because they are foreign. No principle of antitrust law subjects any firm to any liability or constraint simply because of its nationality, nor does it mandate more or less favorable antitrust enforcement policy. When possible, the Department tries to influence U.S. policy in a procompetitive, nondiscriminatory direction. For instance, we have participated in several antidumping proceedings at the U.S. International Trade Commission to argue that the antidumping laws should be interpreted so as to preserve healthy competition, including competition by foreign firms. Similarly I have testified to the Joint Committee on Atomic Energy that participation by foreign firms in the uranium enrichment industry in the United States may be a desirable competitive development. Unfortunately, some persons abroad claim that the U.S. antitrust laws discriminate against foreign firms. This concern probably arises from three factors: Many countries do not have antitrust laws similar to those of the United States, particularly laws similar to the Clayton Act's limitations on incipiently anticompetitive mergers; many persons abroad are unfamiliar with U.S. antitrust law; and finally, it is common knowledge that many countries do discriminate against foreign investment. I believe that a review of the cases, however, shows that U.S. antitrust enforcement has not been discriminatory. The Federal Trade Commission has estimated that there have been more than 200 international mergers per year for the last 10 years. During this period, the Justice Department and the FTC have challenged about 10 of these international mergers, and private antitrust actions have attacked a few more. Of the cases brought by the Justice Department, the majority actually have involved challenges to the acquisition of foreign companies by American firms rather than the contrary. This crude box score of course does not influence our decision whether to bring a given type of case or not; that decision depends upon the particular facts of individual cases. But I believe it does illustrate that the Department has been evenhanded in its enforcement of the antitrust laws related to foreign investments in the United States. The chairman's letter also inquired generally about the status of Societe Imetal's pending tender offer for the stock of Copperweld. That transaction is presently under investigation by the Antitrust Division, and is the subject of private litigation as well. In keeping with Justice Department policy, I do not believe it would be proper for me to comment further on the situation. Thank you, Mr. Chairman. [The prepared statement of Mr. Kauper follows:] Department of Justice Testimony of THOMAS E. KAUPER Antitrust Division Before the Subcommittee on International Trade, Investment and Monetary Policy of the Commitee on Banking, Currency and Housing On Foreign Investment in the United States September 24, 1975 I am pleased to appear before this Subcommittee today to discuss the Department's activities concerning foreign investments in the United States. As you know, the Department has responsibility for enforcing the antitrust laws and related statutes, primarily the Sherman and Clayton Acts. The Sherman Act forbids monopolies and restraints of trade, and the Clayton Act forbids acquisition by one corporation of the stock or the assets of another corporation when "the effect of such acquisition may be substantially to lessen competition or to tend to create a monopoly" with the requisite relationship to interstate or foreign commerce. An increasing number and variety of international business transactions have been subject to antitrust challenge in recent years, and the trend shows every prospect of continuing. The antitrust laws of the United States have been used since the early days of the Sherman Act to attack international cartels which affect U. S. commerce. Recently, a great deal of attention also has been given to international mergers, acquisitions, licensing agreements, and other transactions. Another form of trade restraint has particularly attracted the spotlight lately: the multilateral government-sponsored cartel. All of these international substantial supplier of the other firm under circumstances In some instances, the Department of Justice has chal- however, 1/ U. S. v. British Petroleum Company, 1970 Trade Cases, 72-988. |