This is the part II to a series of blog posts on the topic of the unilateral application of EU Competition Law beyond the confines of EU territory.
Go to: Introduction -> Part II -> Part III -> Part IV -> Conclusion
A state’s, and by analogy the EU’s1, ability to apply its competition laws extraterritorially is governed by public international law2. Accordingly, a state has the power to make laws governing conduct within its territory (the territoriality principle3 ), as well as to regulate the conduct of its citizens and undertakings abroad (the nationality principle4 ). Objective territoriality recognises the State’s jurisdiction where the infringing conduct originates abroad but is then completed or implemented within the State’s territory5.
Applying the latter principle to competition law, especially if based solely on the effect of an agreement or conduct which has not been committed within the territory of the state asserting jurisdiction, has proven extremely controversial6 ).
It has long been the position of the United States7 that their competition rules may be applied where foreign conduct is show to have an effect on US commerce8 ).
This has led a number of countries, including the United Kingdom9 ), to pass ‘blocking statutes’ which attempt to counter excessive assertions of jurisdiction10.The EU institutional response towards extra-territorial applications of US laws can be said to be equally hostile11. As a result of this viewpoint, the EU institutions have had to find more palatable justifications for addressing the anti-competitive conduct of foreign undertakings which have an effect within the EU12.
- Reparations for Injuries Suffered in the Service of the United Nations [1949] ICJ Rep 174; article 47 Treaty on European Union; Case 22/70 Commission v Council (ERTA) [1971] ECR 263; Robert Lane, EC Competition Law (Longman 2001) at 278 [↩]
- Richard Wish, Competition Law (6th ed. Oxford University Press 2008) – Chapter 12: The International Dimension of Competition Law – at [12.4] [↩]
- S.S. Lotus (Fr. v. Turk.), 1927 P.C.I.J. (ser. A) No. 10; Robert Lane, EC Competition Law (Longman 2001) at 179 [↩]
- Andre R Fiebig, ‘International law limits on the extraterritorial application of the European Merger Control Regulation and suggestions for reform’ [1998] 19 European Competition Law Review 326 [↩]
- Ibid. [↩]
- Joseph Griffin, ‘Foreign Governmental Reactions to US Assertions of Extraterritorial Jurisdiction’ [1998] George Mason Law Review 505 [↩]
- United States v Alcoa, [1945] 148 F.2d 416 (2d Cir.); Hartford Fire Insurance Co. v California [1993] 113 S.Ct. 2891 [↩]
- See now: 15 U.S.C. § 6(a)(1) (conduct involving trade or commerce with foreign nations [↩]
- See now: 15 U.S.C. § 6(a)(1) (conduct involving trade or commerce with foreign nations [↩]
- Mark Furse (ed), Butterworths Competition Law Service/Division XII Extra-territoriality [2011] at [363]; Joseph Griffin, ‘Foreign Governmental Reactions to US Assertions of Extraterritorial Jurisdiction’ [1998] George Mason Law Review at 506 [↩]
- For eg. Council Regulation (EC) No 2271/96; Alexander Layton and Angharad M Parry, ‘Extraterritorial Jurisdiction – European Responses’ [2004] 26 Houston Journal of International Law 315 [↩]
- Joanna Goyder and Albertina Albors-Llorens, Goyder’s EC Competition Law (5th ed, Oxford University Press 2008) at 581; Richard Wish, Competition Law (6th ed. Oxford University Press 2008) – Chapter 12: The International Dimension of Competition Law – at [12.5] [↩]