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B? was in effect an American concern with a sub-
Chairman Rees also asked if existing Department
policy adequately handles the growing number of foreign
investments in the United States.
I believe that non
discriminatory and vigorous antitrust enforcement represents the best antitrust policy for the United States
internationally as well as domestically, and the Department intends to continue that type of policy. Your final
question was whether we see a need for improved or expanded
where before the Congress in Support of s. 1284, a pending
bill that would give us such premerger nutification. The provisions of s. 1284 would greatly improve antitrust enforcement by allowing an orderly and prompt antitrust
Antitrust Policy Today, An Address Before the National Industrial Conference Board, Inc., New York, New York, March 5, 1970, p. 7.
review of escer transactions before they go into effect. 31
These benefits would be just as applicable to mergers
involving foreign firms as totally domestic mergers, and
they may be even more applicable.
I have said that we apply the same antitrust principles
to merger transactions, regardless of whether they involve
foreign firms or not.
But mergers involving foreign firms
are one of several types of mergers which frequently re
quire us to make unusually difficult judgments as to the
facts relevant to the transaction, thus increasing our
need for notice of the transaction some reasonable period
in advance of its consummation.
For instance, the market
share of a foreign firm in a U. S. domestic market may
overstate or understate its actual competitive influence on that market, depending upon the facts surrounding that
firm's participation in the U. S. market.
If the firm's
position in the U. S. market is the best it can do after
a substantial effort, it may be subject to a great downside
risk because of currency devaluation, changes in tariffs,
and the other uncertainties of international trade.
if the firm is a very substantial global competitor which
has only begun penetrating the United States market, its existing market share may greatly underestimate its potential competitive impact on the United States.
3 Testimony of Thomas E. Kauper, Assistant Attorney General, Antitrust Division, Before the Subcommittee on Antitrust and Monopoly, Senate Judiciary Committee, May 7, 1975.
Consiċerations such as these will require increasing sophistication in our investigation of mergers involving foreign firms. This will not require a change in policy
or law relevant to antitrust enforcement, but it probably
will require an increase in the resources which we devote
to such transactions.
Assuming that our resources keep
pace with the demands of international antitrust law
enforcement, and assuming that we obtain premerger notification
similar to that provided for in s. 1284, I believe there
is no antitrust reason for the Congress to enact special
procedures related to foreign investments in the United
I would like to take this opportunity to emphasize
a point that has been made frequently by my predecessors
and colleagues in the Federal antitrust enforcement agencies.
That is that the United States antitrust laws are blind
to the nationality of the businesses to which they apply.
Antitrust law is a traditional and fundamental economic
policy of the United States.
The most basic objective
of antitrust law is to preserve an environment within which business enterprises are free to compete in a flexible
and productive manner. It would be totally inconsistent with that basic objective to restrict the competitive
60-146 0 - 75 - 2
freedom of any enterprise, domestic or foreign, simply
because of its nationality.
Thus, the .Department is not sympathetic to the enhancement of the competitive opportunities of domestic firms by arbitrarily limiting the opportunities of foreign firms.
A set of government restrictions that seek to alter the
ordinary flow of business from foreign firms to domestic
firms may have short-term domestic economic advantages. But to the extent that such restrictions result in a pattern of economic development based on arbitrary government
decisions rather than the efficiency-seeking process of
competition, both the foreign and domestic economies are less efficient, and poorer as a result.
U. S. discrimination against foreign firms also would
encourage discrimination by foreign governments against
U. S. firms when they seek to compete abroad.
order to maximize our own firms' ability 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 United States law.
We at the Department seek to encourage vigorous com
petition by all firms within the U. S. economy.
encouragement does not extend to any class of firms the
prospect of less vigilant and effective antitrust enforce
Foreign firms, like domestic ones, will not be
discriminatei against by antitrust enforcers; but when they participate in the United States economy, they must assume the responsibility of complying with U. s. laws, including
foreign firm than the hodge-podge of controls and restric
tions 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
United States 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, includ
ing 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-v