68 Am. U. L. Rev. 621 (2018).

*Senior Staff Member, American University Law Review, Volume 68; J.D. Candidate, May 2019, American University Washington College of Law; B.A., Spanish Studies and Business Studies, 2016, Bentley University. Thank you to the entire Law Review staff, and especially to Cecilia Diedrich and Samantha Primeaux, for their diligent review and valuable suggestions in preparing this Comment. I would also like to thank my faculty advisor, Professor Andrew Popper, for his continued guidance and feedback. To my incredible family and friends, I am truly grateful for your constant encouragement and unwavering support.

In an increasingly connected global economy, complicated by webs of supply chains and foreign subsidiaries, the impact of foreign conduct will inevitably trickle into countries around the globe, including the United States. Often, such foreign conduct will not abide by the strict laws and regulations enforced by the United States. In the recent cases surrounding foreign price-fixing cartels for liquid-crystal-display panels (LCD) panels, a common component in electronics, the question arose of whether such foreign conduct fell within the scope of U.S. antitrust law under the Sherman Act. If the extraterritorial arm of the law extended to allow foreign plaintiffs to bring a claim in these suits, it would leave the door wide open for the numerous foreign subsidiaries of U.S. parent companies, governed by foreign jurisdictions, to seek redress in the United States.
In 1982, Congress enacted the Foreign Trade Antitrust Improvements Act (FTAIA) seeking to ease concerns surfacing in the business community that the then-current antitrust laws hindered global operations. The purpose of enacting the legislation was to clarify the broad scope of the prominent antitrust law in the United States, the Sherman Act. Unfortunately, the FTAIA was ambiguous and has created even greater confusion among the courts regarding when foreign conduct is to be governed by U.S. antitrust law. The issue has grown particularly unclear in cases involving the activities of foreign component cartels where the link between foreign subsidiaries and their U.S. parent companies becomes interrupted by foreign manufacturers and incorporators along the way. As seen in two factually similar cases, the Seventh and Ninth Circuits have provided inconsistent interpretations of the language of the FTAIA, leaving many questions unanswered. Though the Supreme Court denied the opportunity to address the sharp contrast in approaches between the circuits, the Court has not been entirely silent on the reach of the U.S. laws.
In RJR Nabisco v. European Community, the Court analyzed the extraterritorial application of the Racketeer Influenced and Corrupt Organizations Act (RICO). In its discussion, the Supreme Court analogized to antitrust law and shed light on its view regarding extraterritorial application of U.S. laws. This Comment argues that RJR Nabisco is instructive on the extraterritorial scope of the FTAIA as it pertains to foreign component cartel activity. Further, the Seventh Circuit’s narrow interpretation of the FTAIA, as seen in Motorola Mobility v. AU Optronics Corp., is most consistent with the Supreme Court’s reasoning in RJR Nabisco and thus, should provide the standard in future cases. In applying such a standard, clarity, consistency, and predictability for these cases can be achieved, allowing companies to make reasoned decisions about where to do business and avoiding serious judicial capacity and foreign sovereignty concerns.