How Far Is Too Far? Seagate v. NHK Spring and the Extraterritorial Reach of US Antitrust Law

The extraterritorial application of US antitrust law has long generated tension between effective enforcement and respect for the regulatory autonomy of foreign states. This blog post examines that tension through Seagate v. NHK Spring, a case currently before the US Supreme Court at the certiorari stage following the Ninth Circuit’s recent decision of 8 January 2026. The Ninth Circuit allowed private plaintiffs to pursue Sherman Act claims arising from purchases of allegedly price-fixed components made entirely in foreign commerce, relying in part on negotiations conducted in the United States and the alleged effects on US commerce. Drawing on the Foreign Trade Antitrust Improvements Act (FTAIA), the Supreme Court’s judgment in Empagran, and principles of prescriptive comity and international law, we question whether those connections are sufficient to justify the application of US antitrust law. We argue that extending the Sherman Act to such foreign-market injuries would exceed internationally acceptable limits on extraterritorial jurisdiction and unjustifiably interfere with the sovereign regulatory choices of other states.

What happened so far?

The dispute arose from an alleged global conspiracy to fix the prices of suspension assemblies, precision components used in hard disk drives. NHK Spring had previously pleaded guilty to participating in a conspiracy affecting suspension assemblies sold in the United States and elsewhere, after which Seagate Technology LLC and its subsidiaries in Thailand and Singapore brought federal and state antitrust claims, as well as a contractual claim, in the Northern District of California. Although the prices and quantities were negotiated centrally by Seagate’s US-based commodities-management team through a master supply agreement and quarterly requests for quotation, the suspension assemblies at issue were purchased and received by the foreign subsidiaries abroad and incorporated into hard disk drives outside the United States. In its order of 15 May 2023, the District Court held that claims concerning suspension assemblies that never entered the United States arose from wholly foreign transactions and were barred by the FTAIA; it initially allowed claims concerning assemblies incorporated abroad into finished hard disk drives that were subsequently imported into the United States to proceed under the import-commerce exclusion. On reconsideration, however, the District Court held on 17 November 2023 that the import-commerce exclusion was inapplicable because the allegedly price-fixed components themselves had not been imported directly into the United States, and that the domestic-effects exception was likewise unavailable because Seagate had not shown that a domestic effect of the conspiracy proximately caused the foreign subsidiaries’ alleged overpayments; it therefore granted partial summary judgment to NHK in full and denied Seagate leave to add indirect-purchaser claims. On 8 January 2026, the Ninth Circuit vacated that ruling. While agreeing that the import-commerce exclusion did not apply, the panel held that Seagate had advanced a potentially viable theory under the domestic-effects exception: the alleged price-fixing raised prices in the United States, and those US prices – established through negotiations and RFQs conducted in the United States – may in turn have directly determined the inflated prices paid by Seagate’s foreign subsidiaries. The case was remanded for the District Court to determine whether the evidence is sufficient to establish proximate causation at summary judgment. NHK filed a petition for certiorari on 4 June 2026, which remains pending before the Supreme Court.

Empagran and the Limited Reach of FTAIA

The FTAIA was adopted in 1982 after a wave of protests by foreign nations against US courts' application of US antitrust law to a global uranium cartel (In Re Uranium Antitrust Litigation, 480 F. Supp. 1138 (N.D. Ill. 1979)). Accordingly, the FTAIA was adopted “partially in response to the international protests about these cases”.

The US Supreme Court held in Empagran, “the FTAIA’s language and history suggest that Congress designed the FTAIA to clarify, perhaps to limit, but not to expand in any significant way, the Sherman Act's scope as applied to foreign commerce” (F. Hoffmann–La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 169 (2004), original emphasis). In Empagran, the Supreme Court espoused a deferential approach towards foreign nations’ interests, where it held that the FTAIA should be construed “to avoid unreasonable interference with the sovereign authority of other nations” – a rule of construction, that, according to the Court “reflects principles of customary international law” which “Congress ordinarily seeks to follow” (Empagran, 542 U.S. 164). The Court went on to state that excessive extraterritorial application of US law “creates a serious risk of interference with a foreign nation's ability independently to regulate its own commercial affairs” and questioned why American law should supplant other nations’ “own determination about how best to protect … customers from anticompetitive conduct engaged in significant part by … foreign companies” (Id. at 165). The Court pointed out that these considerations could not be overcome by “policy considerations, namely, that application of the Sherman Act in present circumstances will (through increased deterrence) help protect Americans against foreign-caused anticompetitive injury”. (Id., at 174-175).

International Law and Extraterritoriality

The concerns the Supreme Court expressed in Empagran, grounded in international law and prescriptive comity, bear directly on the case now before it. Allowing Seagate Plaintiffs to pursue their claims under the Sherman Act may run afoul of customary international law, particularly the international law against extraterritoriality and the principle of state sovereignty.

International law arguably allows states to prescribe and apply laws regarding foreign conduct that has a substantial effect within their territory (US Restatement (Fourth) of US Foreign Relations Law (2018), Section 402(1)(b)), e.g., substantial domestic effects of foreign antitrust conspiracies. Such effects may constitute a “genuine connection between the subject of the regulation and the state seeking to regulate,” allowing states to exercise authority in keeping with customary international law (Id., Section 407). The Restatement (Fourth) warns, however, that, in exercising such authority, states should heed the interests of foreign nations as a matter of prescriptive comity (Section 402(2)). This means that states should avoid unreasonable interference with the sovereign authority of foreign nations (Section 405, comment c). This limitation is, in fact, already implied in the seminal international antitrust judgment in Alcoa, in which Judge Learned Hand pointed out that “it is quite true that we are not to read general words, such as those in [the Sherman Act], without regard to the limitations customarily observed by nations upon the exercise of their powers” (United States v. Aluminum Co. of America, 148 F.2d 416, 443 (2d Cir. 1945)).

From an international law perspective, states should refrain from exercising jurisdiction were doing so would violate the customary principle of non-intervention, i.e., when their assertions bear on “matters in which each state is permitted, by the principle of state sovereignty, to decide freely” including the “choice of [its] economic system.” (International Court of Justice, Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. U.S.), Merits, Judgment of 27 June 1986, [1986] ICJ Rep. 14, para. 205). Excessive extraterritoriality may violate this principle.

By regulating the activities of foreign companies abroad, states not only assert their authority over these companies but also limit the ability of foreign nations to regulate their affairs at their own discretion; accordingly, states exercising extraterritorial authority may act in a hierarchical manner, undermining the sovereign equality of states.

Relatedly, extraterritoriality may violate a foreign people’s right to self-determination, i.e., a people’s right to choose the laws by which it is governed. For a (powerful) state to impose its legal views on a foreign people would amount to “foreign domination,” and “political disenfranchisement, and legal subjugation.”

The demands of prescriptive comity, non-intervention, and self-determination mean that even if the domestic effects of foreign antitrust conspiracies are direct, substantial, and reasonably foreseeable, applying US law can still be problematic under international law if it interferes with foreign nations’ ability to regulate their own economic and commercial affairs independently. The FTAIA strives to maintain this balance by establishing high barriers to extraterritorial application through the direct, substantial, and reasonably foreseeable effect standard.

Finally, it bears emphasis that, regardless of sovereignty concerns, the extraterritorial application severely complicates the business activities of foreign companies. These companies would have to account for legal rules across multiple jurisdictions, face the possibility of overlapping fines or damages awards, and be exposed to litigation outside their home States. This increases legal uncertainty and business costs and creates the risk of conflicting regulations.

The Unjustifiable Extraterritoriality of the Claims in Seagate v. NHK Spring

In the pending example case, the effects on US commerce caused by NHK Spring’s alleged conduct may well be sufficiently ‘direct, substantial, and reasonably foreseeable’ within the meaning of the FTAIA. Whether the adverse domestic effects of the alleged antitrust conspiracy to fix prices trigger the domestic-effects exception under the first prong of the FTAIA is therefore debatable.

But even if the domestic-effects exception were triggered for certain private plaintiffs, US courts must ensure that the extraterritorial application of the Sherman Act complies with prescriptive comity and international law. One should remember that over 140 countries nowadays have antitrust laws, many of which are based on Western (US and EU) models. The competition policies underlying those laws are not uniform: their content reflects different approaches to economic development, enforcement, and other social and economic considerations. That such laws and views may differ does not mean they are inadequate.

Foreign jurisdictions have also developed their own public and private antitrust remedies. The International Chamber of Commerce Compendium of Antitrust Damages Actions of December 15, 2023, for example, reports that the past decade has seen the adoption of new rules permitting private competition-law actions in almost 40 jurisdictions. There is little doubt that foreign antitrust laws are effectively enforced (see the national reports of various competition authorities, such as Germany, France, the United Kingdom, Japan, or China, etc. – simply have a look at the main developments posts, yearly published at the Kluwer Competition Law Blog), including through available private claims.

By allowing the plaintiffs to pursue their claims, the Ninth Circuit panel in Seagate v. NHK Spring applied US law to claims arising from wholly foreign commerce, thereby risking unjustifiable interference with the legitimate policy choices and legal regimes of foreign nations. Judge Posner of the Seventh Circuit captured this risk well in his opinion in Motorola – a case closely resembling Seagate v. NHK Spring – in which he warned against presuming the inadequacy of the antitrust laws of US allies. Such a presumption would, in his view, be inconsistent with international comity (Motorola Mobility LLC v AU Optronics Corp., 775 F.3d 816, 824-825 (7th Cir. 2015)). 

Against this background, the Ninth Circuit panel’s reliance on deterrence is unconvincing. The claimed deterrent effect of applying the Sherman Act, even if empirically significant, does not outweigh the risk of interference in foreign nations’ affairs. The panel’s observation that ‘the deterrent effect on future anticompetitive behavior’ resulting from applying the FTAIA in this case ‘will still benefit the US’ therefore flies in the face of the principle enunciated in Empagran. Moreover, deterrence is a central objective of private antitrust enforcement in other jurisdictions with materially closer connections to the dispute, such as Japan. Invoking the deterrent effect of US antitrust law to displace foreign choices concerning compensation, deterrence, leniency, and remedies is therefore unwarranted and risks encouraging forum shopping.

The risk that broad geographic constructions of the FTAIA’s effects exception can create international friction is not hypothetical. Foreign nations and competition authorities have regularly filed amicus briefs with US courts, objecting to the potentially overbroad reach of US antitrust law and the resulting interference with their sovereignty. In the aforementioned Empagran and Motorola cases, foreign nations highlighted that expansive assertions of US antitrust jurisdiction might undercut their own civil-recovery regimes, immunity and leniency programmes, and international cooperation arrangements based on mutual respect. Such assertions could effectively turn US courts into global competition regulators, contrary to international law and congressional intent. The objections raised by foreign governments thus provide concrete evidence of the international friction that an expansive interpretation of the FTAIA may cause.

The same concerns arise in Seagate v. NHK Spring. Competition authorities in other jurisdictions have initiated investigations under their own laws, subject to qualified versions of the effects doctrine and principles of international comity. Moreover, private actions have been initiated in at least three foreign jurisdictions. For example, Seagate has sought remedies in Japan for injuries allegedly suffered there. The case therefore illustrates a situation in which the relevant foreign actors have access to antitrust remedies in jurisdictions with substantially closer connections to the alleged conduct and injury.

Moreover, the proposed application of US antitrust law in this case cannot be based merely on the territoriality principle. While contractual negotiations concerning the Product Supply Agreement and the quarterly RFQs between certain plaintiffs and defendants may have occurred partly in the United States, this connection does not suffice to establish US prescriptive jurisdiction over a foreign conspiracy and foreign-market injuries without substantial effects on the US market. The scope of antitrust law does not depend on the territorial situs of contractual negotiations but principally on the territorial effects of anticompetitive conduct, subject to the principles of prescriptive comity, non-intervention, and self-determination explained above.

Modern commercial communications reinforce this conclusion. With the increasing use of digital communication technologies, including instant-messaging and videoconferencing services, cross-border negotiations may be conducted through platforms operated by US-based providers or routed through infrastructure, such as servers, located in the United States. Treating such incidental or technologically mediated contacts as sufficient to apply US antitrust law would create, at most, an indirect and fortuitous nexus to US territory. It would also risk an unwarranted expansion of US prescriptive jurisdiction over foreign transactions and foreign-market injuries.

Even if the US has an interest in applying its antitrust law to contractual negotiations conducted partly on US territory, that interest is outweighed by the legitimate interests of foreign nations in enforcing their own antitrust laws within their territories in relation to conduct having a substantial impact on their markets. The Ninth Circuit panel considered that any international-comity concerns ‘are addressed (and perhaps outweighed) by the price-fixing’s substantial impact on United States commerce’. However, simply factoring in the impact on US commerce, or on Americans in general, is misguided in the context of private antitrust claims.

In a private damages action, the relevant US interest should be assessed by reference to the plaintiff’s alleged injury and the transactions giving rise to it, rather than solely by reference to the aggregate effects of the alleged conduct on US commerce. In this case, the US plaintiff was not harmed directly: the allegedly overcharged purchases were made by its foreign subsidiaries. All relevant transactions – ordering, payment, and receipt – took place outside the US, namely in Asia. The products at issue were neither sold in the US nor sold directly to a US customer. Thus, the impact on the US plaintiff was at most indirect, and the US interest in applying its antitrust laws was consequently weak.

Foreign nations, by contrast, have a much stronger interest in the case, given their substantially closer connections to the dispute. They are the locations of the relevant transactions affected by the alleged price-fixing and the markets in which the alleged overcharge was paid and felt. Allowing the Sherman Act to govern such foreign-market injuries would displace the regulatory choices of foreign states and strain the principles of comity and reasonableness that limit extraterritoriality under international law. 

The Particular Case of Private Enforcement of US Antitrust Law

Foreign concerns over the reach of US antitrust law are brought into particularly stark relief in the case of private antitrust damages actions, such as the action at issue in this case. Unlike government prosecutions by the Department of Justice, ‘private attorney-generals’ enforcing US antitrust law tend not to consider the comity concerns of foreign nations. As previously held:

“The facilitating features of US litigation doubtless increase the number of international trust cases heard by US courts. Most high-profile international antitrust cases, such as Timberlane (1976), Uranium (1978), Laker Airways (1984), Hartford Fire (1993), and Empagran (2004), were not surprisingly brought by private plaintiffs. Private enforcement of regulatory law does not only increases the number of international cases in US courts, but also, in a disproportionate fashion, the risk of such courts establishing jurisdiction over international cases. Because the enforcement agencies are repeat-players, having to deal with foreign enforcement agencies on a daily basis, they tend to balance the interests of the US and other States in a given case. They might refrain from prosecution when a foreign State has an overriding regulatory interest. Private plaintiffs by contrast do not have a long-term incentive to embrace notions of comity, although their actions serve the same public interest that the regulatory authorities ordinarily serve when filing suit. Moreover, as under the Hartford Fire doctrine, a court may only refuse to exercise jurisdiction if a foreign State compels a particular conduct that violates US laws, a finding of jurisdiction is much more likely. Any such finding may happen without consultation with the political branches, and thus undermine their constitutional monopoly on the conduct of foreign relations, and vex other nations.” 

These concerns remain relevant today. To avoid international objections, the US Department of Justice consults with foreign nations when it initiates antitrust proceedings against foreign companies (see Motorola, 775 F.3d 825, 827). Private plaintiffs do not do so and have no interest in doing so. Therefore, to prevent extraterritorial overreach of US law and the ensuing international friction, the FTAIA is to be interpreted exactly as it is written, i.e., as excluding antitrust claims that request the court to regulate foreign conduct causing foreign harm.

Even where, as in Seagate v. NHK Spring, the Justice Department has already imposed criminal sanctions on the basis of the conspiracy’s effects on US commerce and customers, foreign nations may take issue with the imposition of the US system of treble damages to commerce outside of the US. Thus, the defendant's conviction in Motorola had no bearing on the existence of a private damages action claim under the FTAIA: the Seventh Circuit granted partial summary judgment in favor of the defendants (Motorola, 775 F.3d 827). Similarly, in Seagate v. NHK Spring, Defendant’s criminal conviction and its admission that its conspiracy “involved and had a direct, substantial, and reasonably foreseeable effect on the interstate and import trade and commerce” (3-ER- 312) does not imply that such an effect gives rise to a claim of allegedly injured foreign purchasers under US antitrust laws. While the Government, in the criminal case, did not seek restitution “in light of the availability of civil causes of action”, it did not stipulate that such causes of action arise under US law only. In fact, such causes of action may well arise under foreign law, as explained above. Therefore, accepting that foreign companies may sue under the FTAIA in respect of foreign harm, may unjustifiably trample on the rights of foreign nations under international law.    

Disclaimer: Please note that Cedric Ryngaert filed an amicus curiae statement during the Ninth Circuit court appeals.