"Jurisdiction beyond Our Borders: The Long Road to U.S. V. Alcoa and Extraterritorial Antitrust, 1909-1945"

In 1945, Judge Learned Hand penned 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 ingot, Hand revived an American anti-monopoly tradition that had appeared dormant over the preceding decades. The ruling is famous for several reasons: it narrowly defined market share in favor of the prosecution; it expanded the application of dominant firm conduct; it interpreted Congressional intent to protect an egalitarian business environment; and it declared that U.S. antitrust would apply to conduct of foreign firms if their actions effected the U.S. market. Each of those contributions has incited legal commentary; however, Hand’s decision to redraw the territorial application of U.S. antitrust has remained largely unexamined. This essay offers an historical explanation for the origins of antitrust extraterritoriality. It reconstructs the network of ideas and interests that created a sustained argument for the expansion of U.S. rules of competition abroad. Drawing from both archival sources, including Hand’s personal papers, and various case files, this essay reconstructs the liberal-progressive movement in law and economics that ultimately supported extraterritoriality and created the “effects doctrine.” Initially, legal reformers promoted American exports by exempting export-oriented trade associations from antitrust scrutiny. But, as concentrated industries abroad became linked with fascist governments and as the New Deal experiment with cartelized industries faltered, American antitrust reformers became increasingly interested in reorienting the Sherman Act against monopolistic multi-national corporations. While business corporations and groups undoubtedly influenced the political process and helped shape legal outcomes, this preliminary research paper focuses on the lawyers who drafted legislation, brought cases, and made U.S. antitrust international.