Extraterritoriality, Comity and Cooperation in EC Competition Law
Tilburg Law & Economics Center (TILEC); University College London - Faculty of Laws
affiliation not provided to SSRN
University of Liege
The EC competition law regime, with the European Commission ("the Commission") at the apex of its enforcement structure, has steadily evolved to become one of the most mature regimes in the world. Its core provisions, namely Articles 81 and 82 EC, do not, however, explicitly indicate whether they find extraterritorial application or not. Based on the principles of nationality and territoriality, the extraterritorial application of Articles 81 and 82 EC is therefore ensured through the use of three legal constructs, namely the "economic entity" doctrine, the "implementation" doctrine and the "effects doctrine". The former two doctrines are established doctrines of EC law, as recognized by the European Court of Justice ("ECJ"). In the absence of formal recognition by the ECJ, however, it remains unresolved whether the "effects doctrine" enjoys the same status. In the vast majority of cases, however, the fact that the "effects doctrine" has not been formally recognized by the ECJ will have no bearing on the ability to assert subject-matter jurisdiction over non-EU undertakings located outside the EU. The economic entity and implementation doctrines should be more than adequate in this respect.
The assertion of extraterritorial jurisdiction can lead to what some nations regard as an impingement on their sovereignty a corollary of which is the promulgation and/or activation of blocking statutes on their part. Moreover, review by different antitrust authorities of anti-competitive conduct can lead to undesirable outcomes, such as divergent results. In order to temper the effects of the unilateral assertion of extra-territorial jurisdiction, comity principles have come to the fore. Primary Community legislation is silent on the principle of comity, however. Comity does form an integral part of the EU's bilateral antitrust cooperation agreements with the US, Canada and Japan. Unfortunately, comity provisions in those agreements remain weak. Beyond those arrangements comity is only deemed to come into play in those circumstances in which the conduct in question is compelled in the relevant third country. Indeed, one can go so far as to say that where there is a real conflict between competition authorities each will very likely seek to claim an overriding interest in enforcement and disregard comity.
Against the backdrop of comity's lack of mandatory effect, and in order to achieve more effective antitrust enforcement on a European and global level, the Commission has placed itself at the heart of a network of cooperative arrangements. It cooperates closely with Member State national competition authorities ("NCAs") through the European Competition Network ("ECN") and is party to a series of cooperative arrangements with third countries. In addition, the Commission is closely involved in multi-national antitrust fora which provide for a platform for discussion of practical competition policy enforcement and policy issues, for disseminating best practice and encouraging procedural and substantive convergence. Avoidance of conflict is another reason for entering into cooperative arrangements. Conflict does, however, continue to subsist not for want of cooperative effort but invariably on account of stark differences in the manner allegedly anti-competitive conduct is appraised. In this respect witness the Commission's decisions in Microsoft and GE/Honeywell with regard to refusal to license and tying, and conglomerate effects respectively. In the greater scheme of things, however, such conflicts are rare occurrences and cooperation between the EU and US, for example, has been a great success.
In view of the above, the purpose of this paper is to provide the reader with a brief overview of the EC competition law regime (Part II) and to demonstrate how its provisions are used to assert subject-matter jurisdiction over non-EU undertakings located outside the EU which engage in alleged violations of EC competition law (Part III). The subject of comity will then be looked at with the discussion essentially focusing on the comity provisions found in the EU/US cooperation agreements (Part IV). The EU's internal and external cooperative arrangements will then be looked at (Part V). Finally, a short conclusion will be provided (Part VI).
Number of Pages in PDF File: 18
Keywords: Extraterritoriality, Competition, Antitrust, Committee, Jurisdiction, European Union, Globalization, Cartels, Mergers
JEL Classification: D40, K10, K21, K33, L40
Date posted: July 30, 2008