Foreign Compulsion

Foreign compulsion has been a recognized defense in antitrust prosecutions, although not always a successful one. Basically, the defense boils down to saying that the defendant should not be held criminally liable for anti competitive actions he took because the action was an involuntary one. Rather, a foreign law forced him to engage in the unlawful practice. This would most commonly arise in the setting of a US citizen who does business internationally, and was conducting business with a domestic company while in another country. If he acted pursuant to the laws of the foreign country he was in when he took the anti competitive business action (e.g. consulting a competitor on what price to set), then this can be a successful defense if the laws required such consultation with competitors as part of a mandated price-fixing statute (there are stranger things).

If the foreign governmental action rises no higher than mere approval, then the foreign compulsion defense will not be recognized in an antitrust action. In order to invoke the foreign compulsion defense, it is necessary that foreign law coerced the defendant into violating American antitrust law. The defense is not available if the defendant could have legally refused to accede to the foreign power’s wishes. Thus, a business may not engage in anti competitive business practices overseas simply because there is no statute prohibiting such conduct in that country. Instead, for the foreign compulsion defense to be available, the foreign country must have a law on the books that required the defendant to engage in the activity.