Jurisdiction Beyond Our Borders: United States v. Alcoa and the Extraterritorial Reach of American Antitrust, 1909–1945

Jurisdiction Beyond Our Borders: United States v. Alcoa and the Extraterritorial Reach of American Antitrust, 1909–1945

 

Laura Phillips-Sawyer

University of Georgia School of Law

Abstract

In 1945 Judge Learned Hand wrote one of the most influential opinions in modern antitrust law. In declaring that the Aluminum Company of America (Alcoa) had illegally monopolized the industry for virgin aluminum and had participated in an illegal international cartel, Hand both revived and extended American antitrust law. The ruling is famous for several reasons: It narrowly defined the relevant market in favor of the government; it expanded the category of impermissible dominant firm conduct; it interpreted congressional intent as protecting an egalitarian business environment; and it established the extraterritorial reach of US antitrust laws. Although each of those contributions has incited legal commentary and critique, Hand’s decision to redraw the territorial application of US antitrust has remained largely unexamined. This essay offers a historical explanation for the origins of antitrust extraterritoriality and advances two arguments: First, before and during the interwar years, the antitrust doctrine of strict territoriality had been eroded through a series of distinguishing cases and contradictory congressional policies. Second, the well-documented connection between European fascism and cartelization provided strong external pressures to extend American antitrust law and policy abroad and to redouble anticartel and antimonopoly provisions at home. Thus, both internal and external pressures culminated in the Alcoa case, which signaled a new era in American antitrust law—renewing both anticartel and anti-monopolization policy while at the same time linking market competition to the protection of American territorial and popular sovereignty. By 1945 extraterritorial antitrust emerged as an acceptable means of governance to curtail international cartel behavior, discipline monopolies at home, and impose an American-led liberal—and hegemonic—internationalism on its trade partners.