A New Global Corporate Regulatory Power?: Market Entry as the Basis for Prescriptive Jurisdiction

28 Pages Posted: 12 Feb 2024

Date Written: January 29, 2024

Abstract

The rules of international economic law are changing. In a range of areas, governments are asserting that if a multinational firm touches the state’s market, the state can claim the authority to regulate the firm everywhere. This departure from multilateral economic coordination and towards more unilateral regulatory power over firms’ global operations represents an important shift in international economic policy. We have entered an era where governments are embracing more unilateral tools to resist foreign economic influence and reinvigorating national industrial policies. This Article examines the political dynamics that lead states to use access to their national markets as the basis for global corporate regulation in the national security and corporate social responsibility (CSR) fields. Specifically, this Article analyzes how market-entry-based global regulations represent an expansive conception of states’ extraterritorial jurisdiction and what constraints there are on states’ exercise of these jurisdictional claims. For national security and CSR regulation, the Article addresses three questions: (1) how states are using entry into their markets to gain global regulatory power, (2) why states are adopting this approach, and (3) what the limits are to this market-entry-based extraterritorial jurisdiction. The Article concludes by exploring how the jurisdictional claims will likely intensify conflict between governments as nations seek to push their own priorities on foreign corporations. These conflicts will exist between allies and adversaries as states disagree over the ideal level of corporate regulation, as well as the best means to implement it.

Keywords: export controls, prescriptive jurisdiction, CSR, extraterritorial

JEL Classification: K20, F02, P16

Suggested Citation

Brewster, Rachel, A New Global Corporate Regulatory Power?: Market Entry as the Basis for Prescriptive Jurisdiction (January 29, 2024). University of Chicago Legal Forum, Vol. 2023, No. 3, 2024, Duke Law School Public Law & Legal Theory Series No. 2024-11, Available at SSRN: https://ssrn.com/abstract=4709517

Rachel Brewster (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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