SW Legal studies in Business

Injury to Competition Outside the U.S. Not Subject to Antitrust Laws
Description Appeals court held that U.S. courts do not have jurisdiction to hear antitrust cases where the alleged violation by U.S. firms took place outside of the U.S. The Foreign Trade Antitrust Improvements Act denies standing to plaintiffs when the actions take place entirely outside of the U.S.
Topic Antitrust
Key Words Price Fixing; Foreign Trade Antitrust Improvements Act; Jurisdiction
C A S E   S U M M A R Y
Facts Travel agents in Latin America sued the International Air Transport Association (IATA) and its U.S. airline members for horizontal price fixing. IATA is supervised by the Department of Transportation. All travel agents must have an IATA license to access reservation systems of U.S.-based airlines. IATA sets commission rates for travel agents, which had been seven percent for travel agents in Central America. In 1999 all major airlines announced that they would pay six percent commissions for tickets sold in Central America. The travel agents sued, contending there was a conspiracy to reduce the price they were paid. The district court dismissed the suit. The travel agents appealed.

Affirmed. U.S. courts do not have jurisdiction over this matter because the travel agents do not have standing. The Foreign Trade Antitrust Improvements Act exempts from the Sherman Act export transactions that do not injure the U.S. economy. The alleged price conspiracy, and the injury suffered by travel agents, took place outside of the U.S. "Generally, federal antitrust laws do not extend to protect foreign markets from anticompetitive effects and do not regulate the competitive conditions of other nations' economies."

Citation Turicentro, S.A. v. American Airlines, 303 F.3d 293 (3rd Cir., 2002)

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