A Tale of Legal Contortions: The Extraterritorial Application of EU Competition Law in the Global Economy (1/5)

This is the introduction 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

“The picture before us is that of an international society made up of adjacent cells, separated by frontiers; the concept of territory… illustrates that division between separate entities by physical and geographical boundaries. But it is clear… that frontiers are not only barriers, but also crossing points and economic life makes light of such barriers.”1

In these posts, I shall argue that the European Courts have, unlike the Commission, for the most part, been cautious in dealing with extraterritoriality, devising various tests with the aim of bringing offending foreign conduct within the purview of EU law. This concern explains their reluctance to rely on contentious interpretations of international law, such as the effects doctrine, in favour of more ‘European’ principles, such as the implementation criterion and economic entity doctrine.

In examining the ways in which the EU has been able to surmount the limitations of its territorial jurisdiction in order to address conduct by foreign entities which have an impact on the internal market, I will focus on the unilateral application of EU competition law extraterritorially, as opposed to other methods such as bilateral cooperation and multilateralism, which are beyond the scope of this essay.

To do so, I shall first briefly outline the bases for assertions of jurisdiction under public international law (part II). I shall then analyse the evolving bases used for the extraterritorial application of articles 101 and 102 (part III), before evaluating whether the implementation criterion is a sufficient base of jurisdiction, and reviewing the practical limitations of enforcement. I will then turn to the Merger Regulation and consider its controversial quantitative jurisdictional test (part IV), before examining whether negative comity has constrained the EU’s extraterritorial application of competition rules.

  1. Professor Prosper Weil, L’application extraterritoriale du droit économique (Montchrestien 1987) at 11 – quoted by Advocate General Darmon in A. Ahlström Osakeyhtiö and others v Commission (‘Woodpulp’) [1988] European Court Reports 5193 at [47] []