What role does the United States play in policing international commerce? At what point do the laws of the United States end and those of other nations begin? These questions, among others, arise in determining when U.S. antitrust laws apply to foreign conduct. Looking back, the Sherman Act, for some time, has applied to foreign conduct so long as that conduct satisfied certain requirements. However, common law tests proved inconsistent and difficult to apply. As a result, ninety-two years after the enactment of the Sherman Act, Congress intervened with the intent to clarify the common law by way of the Foreign Trade Antitrust Improvements Act (FTAIA). Unfortunately, congressional efforts failed.
Today, as international commerce flourishes and political borders figuratively dissipate, the questions become even more difficult. Federal courts attempting to apply the FTAIA have labored over the statute’s difficult language and structure. The FTAIA bars the Sherman Act from applying to foreign conduct involving non-import commerce unless such conduct has an effect on domestic commerce and the effect gives rise to the plaintiff’s injury. Therefore, the statute distinguishes between conduct, effect, and injury. The causal link between each distinction has been the subject of much debate. In 2005, the D.C. Circuit required a proximate cause relationship between the effect and injury. Similarly, a recent decision from the Seventh Circuit required a proximate cause nexus between the conduct and effect. In doing so, the Seventh Circuit highlighted an error within the D.C. Circuit’s holding. This Note rejects the D.C. Circuit’s interpretation and argues that a but-for nexus between the effect and injury adheres more correctly to the statute’s text, legislative history, and international comity.