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Extraterritorial Competence of the United States, the EU, and China Competition Laws

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Abstract

The external outreach of both the Sherman Act and the Clayton Act took quite some time to become part of the U.S. doctrine. The two U.S. antitrust provisions that most frequently give rise to extraterritorial jurisdiction are Sections 1 and 2 of the Sherman Act. Section 1 declares illegal “every contract, combination … or conspiracy,” in restraint of trade or commerce among the several states, or with foreign nations, while Section 2 makes it a felony for any person to “monopolize … or combine or conspire…, to monopolize any part of the trade or commerce among the several states, or with foreign nations.” The United States is not alone. The European Union Merger Regulation, which came into force in 1990 and was revised in 2004, gives the European Commission the authority to review any concentration, which is deemed to have a “Community” (in other words, an EU) dimension. Last but not least, Article 2, China’s AML is applicable to monopolistic conducts outside the territory of the People’s Republic of China, which serve to eliminate or restrict competition on the domestic market of China.

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Notes

  1. 1.

    American Banana Co. v. United Fruit Co., 213 U.S. 347 (1909).

  2. 2.

    Roger P. Alford (1992): The Extraterritorial Application of Antitrust Laws: The United States and European Community Approaches, Virginia Journal of International Law, pp. 6–7.

  3. 3.

    Timberlane Lumber Co. vs. Bank of America, 549 F.2d 1287 (3rd Cir. 1979).

  4. 4.

    United States v. Aluminium Co. of America, 148 F.2d 416, 444 (2nd Cir. 1945).

  5. 5.

    Am. Banana v. United Fruit Co., 213 U.S. 347 (1909).

  6. 6.

    F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 164 (2004).

  7. 7.

    U.S. Department of Justice and Federal Trade Commission, Antitrust Enforcement Guidelines for International Operations, 4 Trade Reg. Rep. (CCH) ¶ 13,107 (1995).

  8. 8.

    Richard W. Beckler (2003): Extraterritorial Application of U.S. Antitrust Law: What Is a “Direct, Substantial, and Reasonably Foreseeable Effect” Under the Foreign Trade Antitrust Improvements Act? Texas International Law Review, Vol. 38, No. 11, p. 19.

  9. 9.

    Phillips Petroleum Co. v. Heeremac, No. H-98-1698 (S.D. Tex. Jan. 22, 1999).

  10. 10.

    Richard W. Beckler (2003): Extraterritorial Application of U.S. Antitrust Law: What Is a “Direct, Substantial, and Reasonably Foreseeable Effect” Under the Foreign Trade Antitrust Improvements Act? Texas International Law Review, Vol. 38, No. 11, p. 18.

  11. 11.

    McGlinch v. Shell Chemical Co., 845 F.2d 802, 812–13 (9th Cir. 1988).

  12. 12.

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  13. 13.

    Richard W. Beckler (2003): Extraterritorial Application of U.S. Antitrust Law: What Is a “Direct, Substantial, and Reasonably Foreseeable Effect” Under the Foreign Trade Antitrust Improvements Act? Texas International Law Review, Vol. 38, No. 11, p. 18.

  14. 14.

    Timberlane Lumber Co. v. Bank of America, 549 F.2d 597 (9th Cir. 1976).

  15. 15.

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  16. 16.

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  17. 17.

    Motorola Mobility LLC v. AU Optronics Corp., 775 F.3d 816 (7th Cir.), cert. denied, 135 S. Ct. 2837 (2015).

  18. 18.

    Council Regulation 139/2004 of 20 January 2004 on the Control of Concentrations between Undertakings, 2004 O.J. (L 24) 1 (EC) [hereinafter EC Merger Regulation].

  19. 19.

    Working Party No. 3 on Co-operation and Enforcement Roundtable on the Extraterritorial Reach of Competition Remedies, p. 6.

  20. 20.

    Council Regulation 139/2004 of 20 January 2004 on the Control of Concentrations between Undertakings, 2004 O.J. (L 24) 1 (EC) [hereinafter EC Merger Regulation].

  21. 21.

    Georgios Kiriaziz: Jurisdiction and Cooperation Issues in the Investigation of International Cartels, DG COMP-A-4, p. 1.

  22. 22.

    Georgios Kiriaziz: Jurisdiction and Cooperation Issues in the Investigation of International Cartels, DG COMP-A-4, p. 14.

  23. 23.

    Cases 89/85, 114/85, 116–117/85, 125–129/85, a. Ahlstrom Osakeyhtid v. Commission (Wood Pulp) Decision of 27 September 1988.

  24. 24.

    Paras. 16, 17, 18.

  25. 25.

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  26. 26.

    OECD (2017): Working Party No. 3 on Co-operation and Enforcement Roundtable on the Extraterritorial Reach of Competition Remedies, p. 6.

  27. 27.

    Google/Motorola Mobility, case No. COMP/M.6381.

  28. 28.

    (i) Google owned the IPR to the Android mobile OS, (ii) Google was responsible for releasing each new version of the Android mobile OS, (iii) Google effectively had to approve each smartphone or tablet running on Android which was built as an Android device and had to approve the implementation of its applications on devices that ship with Google applications preinstalled, (iv) even though the source code for the Android mobile OS was released by Google for free under an open source licence, Android OEMs still remained highly dependent on Google, and (v) a Google internal document showed that Google exerted control over Android.

  29. 29.

    Commission Decision COMP/M.2220—General Electric/Honeywell, 2001 O.J. (L.48) 1 (EC).

  30. 30.

    Its avionics (e.g. aircraft communication and navigation equipment) and non-avionics products (e.g. wheels, lights and landing gear) with engines, at a discount to single product purchases, which competitors could not match.

  31. 31.

    Jeremy Grant (2005): The Attempted Merger Between General Electric and Honeywell: A Case Study of Transatlantic Conflict, Graduate Institute of International Studies, Geneva, p. 4.

  32. 32.

    Testimony given at Honeywell appeal hearing, Luxembourg, May 25, 2004.

  33. 33.

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  34. 34.

    Zhan Hao, Song Yin, and Stephanie Wu (2019): Global Legal Insights, Cartel 2019-China.

  35. 35.

    Yee Wah Chin (2012): M&A Under China’s Anti-Monopoly Laws, Victoria University of Wellington Law School.

  36. 36.

    MOFCOM Announcement [2011] no. 33 regarding the Anti-Monopoly Review Decision for Conditional Clearance of the Combination of Joint Stock Company Uralkali with Joint Stock Company Silvinit, http://fldj.mofcom.gov.cn/aarticle/zcfb/201106/20110607583288.html (in Chinese) (visited February 17, 2012).

  37. 37.

    MOFCOM Announcement [2011] no. 73 Regarding anti-monopoly review decision granting conditional approval of the acquisition by Penelope Company Ltd. of Savio Macchine Tessili S.P.A, http://fldj.mofcom.gov.cn/aarticle/zcfb/201111/20111107809156.html?149782665=840603354 (in Chinese) (visited February 17, 2012).

  38. 38.

    MOFCOM Announcement [2011] no. 74 regarding the Anti-Monopoly Review Decision for Conditional Clearance of Contemplated Joint Venture between General Electric (China) Co. Ltd. and China Shenhua Coal to Liquid and Chemical Co. Ltd., http://fldj.mofcom.gov.cn/aarticle/zcfb/201111/20111107824342.html?1104118153=840603354 (in Chinese) (visited February 16, 2012).

  39. 39.

    MOFCOM Announcement no. 90 (2011) regarding anti-monopoly review decision granting conditional approval of Seagate Technology LLC acquisition of Samsung Electronics Co. Ltd. hard disk drive business, http://fldj.mofcom.gov.cn/aarticle/zcfb/201112/20111207874274.html?3102376073=840603354 (in Chinese) (visited February 17, 2012).

  40. 40.

    Press Release IP/11/1213, October 19, 2011, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/1213.

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Lessambo, F.I. (2020). Extraterritorial Competence of the United States, the EU, and China Competition Laws. In: Mergers in the Global Markets. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-43558-5_6

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  • DOI: https://doi.org/10.1007/978-3-030-43558-5_6

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