The Three Body Problem – Extraterritoriality, Comity and Cooperation in Competition Law

'Extraterritoriality of EU Economic Law ' (eds.Nuno Cunha Rodrigues), Forthcoming

29 Pages Posted: 26 Oct 2020 Last revised: 12 May 2021

See all articles by Pedro Caro de Sousa

Pedro Caro de Sousa

Organization for Economic Co-Operation and Development (OECD)

Date Written: July 23, 2020

Abstract

The three body problem in physics concerns the challenge of accurately calculating the interaction of three different bodies (e.g. planets). Examples include the motion of the Moon around the Earth as disturbed by the action of the Sun, or the movement of one planet around the Sun as disturbed by the action of another planet. Three body systems are chaotic, and despite centuries of work there is no general solution to this problem.

Understanding the extraterritorial effect of competition law raises challenges akin to the three body problem: while primarily governed by one dominant gravitational pull (a country’s rules on the scope of its competition law), in practice the extraterritorial effect of competition law is affected by other forces (in particular, international comity and cooperation against a common epistemic background). This means that a thorough analysis of extra-territorial effects requires us to look not only at legal/formal structures concerning the scope of a country’s law, but must also take into account ‘informal’ mechanisms– e.g., comity (i.e. unilateral self-restraint and tolerance on the part of the affected jurisdictions), cooperation (i.e. extra-legal mechanisms to coordinate between potentially conflicting legal regimes) and epistemic communities (i.e. relations between competition specialists) – that impact how law is applied in practice.

This paper reviews how these three concepts operate in practice in the context of (EU) competition law. It will argue that, as with the traditional three body problem, no purely legal and formal conceptual framework can explain how competition law is applied extra-jurisdictionally. The best we can is to approximate such a point through increasingly sophisticated application of three partially overlapping legal doctrines – extra-jurisdictional reach, international comity, and international cooperation – against a common epistemic background shared by the global (and regional) competition communities.

Keywords: Antitrust, Competition Law, Subject-Matter Jurisdiction, Extraterritoriality, Comity, International Cooperation

JEL Classification: K21, K29, K33, L40, L49

Suggested Citation

Caro de Sousa, Pedro, The Three Body Problem – Extraterritoriality, Comity and Cooperation in Competition Law (July 23, 2020). 'Extraterritoriality of EU Economic Law ' (eds.Nuno Cunha Rodrigues), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3659083 or http://dx.doi.org/10.2139/ssrn.3659083

Pedro Caro de Sousa (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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