Abstract
This paper discusses the external competition law of the EU. The paper is structured as follows: Section 1 briefly introduces the concepts of competition law and international competition law. It then attempts to put in context the notion of the external competition law of the EU. Section 2 discusses extraterritoriality as a principle developed in the US and as a feature of the EU’s external competition law and policy. Section 3 discusses bilateral trade agreements signed by the EU, which include competition law provisions. Section 4 discusses the position that the EU has developed in relation to soft law bilateral competition enforcement cooperation agreements. Section 5 concludes by evaluating the development of the external competition law of the EU, at the various levels of its development.
This paper is based on my book entitled “The international dimension of EU competition law and policy,” 2010.
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Notes
- 1.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 15–17.
- 2.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 18–35.
- 3.
Economists would probably prefer the term “international economic integration,” referring to the integration of markets due to the increase of international economic activity. These are probably over-simplified definitions, in view of the debate regarding the meaning, or even the existence of globalisation. See Held, Golblatt, McGrew, and Perraton, Global Transformations: Politics, Economics and Culture, 1999, pp. 2–10, where the authors provide a number of alternative definitions on globalisation.
- 4.
Rodrik, How Far will International Economic Integration Go?, The Journal of Economic Perspectives, 14 (1999) 1, p. 177; Archibugi, and Pietrobelli, The Globalisation of Technology and its Implications for Developing Countries. Windows of Opportunity or Further Burdens?, Technological Forecasting and Social Change 70 (2002) 9, p 861 (864), where the authors identify three main categories of (economic) globalisation: the international exploitation of nationally produced technology, the global generation of innovation, and global technological cooperations.
- 5.
The list of such fields, includes, (not exclusively) intellectual property, corporate governance, money laundering, telecommunications, energy, environmental, transport, tax, and banking regulations that may also deal with business practices.
- 6.
Howse, From Politics to Technocracy-and Back Again: The Fate of the Multilateral Trading Regime, American Journal of International Law, 96 (2002) 1, p. 94 (96).
- 7.
OECD, Trade and Competition Policies- Options for a Greater Coherence, 2001.
- 8.
Marsden, A Competition Policy for the WTO, 2003, Chapter 3, and especially pp. 91–108.
- 9.
See International Competition Policy Advisory Committee (2000), ICPAC Final Report to the Attorney General and the Assistant Attorney General for Antitrust, (hereinafter ICPAC report) http://www.usdoj.gov/atr/icpac/finalreport.htm, at pp. 202–215.
- 10.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, chapter 6.
- 11.
Burley, Law Among Liberal States: Liberal Internationalism and the Act of State Doctrine, Columbia Law Review 92 (1992) 8, p. 1907 (1923–1926); See also Dabbah, The Internationalisation of Antitrust policy , 2003, at pp. 141–142.
- 12.
Preub, Political Order and Democracy: Carl Schmitt and his Influence, in: Ch. Mouffe, (ed.), The Challenge of Carl Schmitt, 1999, p. 167. Cited by Jayasuriya, Globalization, Sovereignty, and the Rule of Law: From Political to Economic Constitutionalism?, Constellations 8 (2001) 4, p. 442 (445).
- 13.
Philpott, Sovereignty: An Introduction and Brief History, Journal of International Affairs 48 (1995) 2, p. 353 (356–357).
- 14.
Shaw, International Law, 2004, 5th edition, pp. 175–223.
- 15.
Further, in this context, international agreements have been considered equivalent of a contract. Guzman, The Design of International Agreements, European Journal of International Law 16 (2005) 4, p. 579 (585).
- 16.
Terhechte, International Competition Enforcement Law Between Cooperation and Convergence—Mapping a New Field for Global Administrative Law, The University of Oxford Centre for Competition Law and Policy, Working Paper CCLP(L) 26 (2009), p. 7.
- 17.
Referring to agreements concluded by more than three states.
- 18.
See Maher, Competition Law in the International Domain: Networks as a New Form of Governance, 29 (2002) 1, Journal of Law and Society, p. 111; see Maher and Papadopoulos, Competition Agency Networks Around the World, in Ezrachi (ed): International Research Handbook on Competition Law, 2013.
- 19.
On the relation between EU law and international law and the various perspectives from which this relation has been discussed in the relevant literature, see Ziegler, International Law and EU Law: Between Asymetric Constitutionalisation and Frangmentation, in Orakhelashvili (Ed) Research Handbook on the Theory and History of International Law, 2011, p. 268.
- 20.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, chapter 5, where it is suggested that the EU in general and its competition regime in more particular has had an influence in the development of other similar regional settings.
- 21.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, chapter 6.
- 22.
See IBA (2006) Report of the Task Force on Extraterritorial Jurisdiction, p. 50 and p. 70, where it is noted that competition laws have been applied in an extraterritorial manner by Argentina, Austria, Belgium, Brazil, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Italy, Japan, Norway, Portugal, Russia, South Africa, South Korea, Spain, Switzerland and the UK.
- 23.
See generally Barnet, Conflicts of Jurisdiction and International Comity in Extraterritorial Antitrust, Emory International Law Review 18 (2004), p. 555.
- 24.
United States Court of Appeals for the 2nd Circuit, United States v. Aluminum Co. of America, 148 F.2d 416 (2ed Cir. 1945).
- 25.
United States Court of Appeals for the 9nd Circuit, Timberlane Lumber Co. v Bank of America, 549 F.2d 597 (9th Cir. 1976).
- 26.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 64–67.
- 27.
15 U.S.C s 6a (1994).
- 28.
Springman, Fix Prices Globally, Get Sued Locally? US Jurisdiction Over International Cartels, University of Chicago Law Review 72 (2005), p. 265 (271–273).
- 29.
United States Supreme Court, Hartford Fire Ins. Co. v. California, 509 U.S.764 (1993).
- 30.
United States of America v. Nippon Paper Industries Co. LTD, et al., p. 9, 109 F.3 d (1st Cir. 1997).
- 31.
United States Court of Appeals for the District of Columbia Circuit, Hoffman La Roche vs. Empagran, SA 124 2359 (2004). See Reinker, Case Comment: Roche vs. Empagran, Harvard Journal of Law and Public Policy 28 (2004) 1, p. 297.
- 32.
See Opinion of the Court of Appeals, Empagran S.A. v. Hoffman La Roche LTD., et al., No 01-7115c (2005).
- 33.
See Opinion of the Court of Appeals, Empagran S.A. v. Hoffman La Roche LTD., et al., No 01-7115c (2005).
- 34.
As Watson–Doig notes, in the period between 2000 and 2005, of the 80 individuals serving jail sentences in the US for cartel activity, 18 were foreign nationals. See Watson-Doig, Crime and Competition, Competition Law Insight of 10.4.2007 (2007), p. 8 (9). See also the discussion on the Ian Norris case, section 3.4.2.
- 35.
See Sato, Extraterritorial Application of EU Competition Law—Is it Possible for Japanese Companies to Steer Clear of EU Competition Law?, Journal of Political Science and Sociology (2009) 11, p. 23 (pp. 30 et seq.).
- 36.
The Commission has also published guidelines in relation to the assessment of the effect. See EU Commission, Guidelines on the effect of trade concept contained in Articles 81 and 82 of the treaty (2004/C 101/07), OJ C 101/81.
- 37.
ECJ, Joined Cases C-89, 104, 114, 116, 117 and 125-129/85, Ahlstrom and Others v. E.C. Commission (Re Wood Pulp Cartel), [1988] E.C.R. 5193.
- 38.
ECJ, Joined Cases C-89, 104, 114, 116, 117 and 125-129/85, Ahlstrom and Others v. E.C. Commission (Re Wood Pulp Cartel), [1988] E.C.R. 5193, para. 16: the decision reads: “[A]n infringement of Article 85 … [is] made up of two elements, the formation of the agreement, decision or concerted practice, and the implementation thereof.”
- 39.
See ECJ, Opinion of Advocate-General Darmon of 25 May 1988 in joined cases 89, 104, 114, 116, 117 and 125-129/85 [1988] E.C.R. 5214, para.57. See Geradin, Reysen and Henry, Extraterritoriality, Comity and Cooperation in EC Competition Law (2008), p. 6. Available at SSRN: http://ssrn.com/abstract=1175003.
- 40.
Banks, The Development of the Concept of Extraterritoriality under European Merger Law and its Effectiveness under the Merger Regulation following the Boeing/Mc Donnell Douglas Decision 1997, European Competition Law Review 19 (1998) 5, p. 306 (308).
- 41.
CFI, Case T-102/96, Gencor Ltd v Commission, [1999] ECR II-0753.
- 42.
CFI, Case T-102/96, Gencor Ltd v Commission, [1999] ECR II-0753, paras. 78–88.
- 43.
CFI, Case T-102/96, Gencor Ltd v Commission, [1999] ECR II-0753, para. 90.
- 44.
Former Commissioner Monti stated that “I am confident, however, that this uncertainty is now behind us: the European Court of First Instance … clearly states that the Community’s exercise of jurisdiction over a merger taking place wholly outside of the Community is compatible with the principles of public international law, where the merger produces direct substantial and foreseeable effects within the EU.” Monti, Cooperation Between Competition Authorities: A Vision for the Future,” speech delivered at the Japan Foundation Conference, Washington, DC, 23. June 2000, speech/00/234, available at: http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/00/234&f.
- 45.
Such agreements were signed with countries that eventually entered the EU in 2004 and 2007, and in particular with: Bulgaria, Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, and Slovenia.
- 46.
White Paper EC Commission Preparation of the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of the Union, (1995) COM (95) 163 final.
- 47.
See Devuyst, Kankanen, Lindberg, Orssich, and Roebling, EU enlargement and competition policy: where are we now?, Competition Policy Newsletter (2002) 1, p. 3; Geradin (ed) Modernization and Enlargement: Two Major Challenges for EC Competition Law, 2004, in particular chapters 13 to 17; Holscher and Stephan, Competition Policy in Central Eastern Europe in the Light of EU Accession, Journal of Common Market Studies 42 (2004) 2, p. 321; Sceres, Multi-Jurisdictional Competition Law Enforcement: The Interface Between European Competition Law and the Competition Laws of the New Member States, European Competition Journal 3 (2007) 2, p. 465.
- 48.
See the website of the Commission at http://ec.europa.eu/enlargement/the-polic7y/index_en.htm.
- 49.
In particular, it has been argued that in the context of their accession, candidate countries had to “swallow all 80,000 pages of European laws and adapt their own legislation to accommodate them,” and this whole process has been closely reviewed by EU officials. Leonard, Why Europe Will Run the 21st Century?, 2005, p. 45. On the way that the EU monitors the adoption and implementation of the Acquis, see the EC Commission website at http://ec.europa.eu/enlargement/enlargement_process/accession_process/how_does_a_country_join_the_eu/negotiations_croatia_turkey/index_en.htm#acquis.
- 50.
ENP was first outlined in a 2003 Commission Communication. Commission (EC), Wider Europe— Neighbourhood: A New Framework for Relations with our Eastern and Southern Neighbours, COM (2003) 104 final, which was followed by a more detailed Communication in 2004: Commission EC, Communication from the Commission, European Neighbourhood Policy; Strategy, COM (2004) 373 final.
- 51.
Such agreements have been signed with Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the Palestinian Authority, and Tunisia.
- 52.
Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukrain and Uzbekistan.
- 53.
See http://ec.europa.eu/enterprise/policies/international/facilitating-trade/free-trade/index_en.htm. The EU is also in the process of negotiating agreements with India, Malaysia, Singapore, and a more comprehensive agreement with Canada.
- 54.
In particular, this goal is explicitly expressed in agreements with candidate and accession countries, in the Euro-Med agreements, and in the agreements signed with Chile, South Africa, and Mexico.
- 55.
Commission EC, Communication from the Commission, European Neighbourhood Policy; Strategy, COM (2004) 373 final, p. 16.
- 56.
OECD Joint Group on Trade and Competition, Competition Provisions in Regional Trade Agreements, OECD Trade Policy Working Paper COM/DAF/TD(2005)3/FINAL (2006) 31. Available at: http://search.oecd.org/officialdocuments/displaydocumentpdf/?doclanguage=en&cote=com/daf/td(2005)3/final.
- 57.
See in detail Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 127–138.
- 58.
Egypt, Israel and Jordan.
- 59.
See in detail, Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 105–115.
- 60.
This has been in practice a demanding task. See Papadopoulos, The international dimension of EU competition law and policy, 2010, p. 120.
- 61.
With the exemptions of Algeria and Lebanon.
- 62.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, p. 123.
- 63.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 122–126.
- 64.
Glenn, From Nation-States to Member States: Accession Negotiations as an Instrument of Europeanization, Comparative European Politics 2 ( 2004) 1, p. 3.
- 65.
OECD, Recommendation of the Council, 27 and 28 July 1995, C(95)130 final.
- 66.
OECD, Recommendation of the Council, 27 and 28 July 1995, C(95)130 final, Art I.A and I.B.
- 67.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 58–62.
- 68.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, chapter 6.
- 69.
This position has been expressed by Stephen Ryan, of the European Commission at a CEPR meeting in Paris, December 2005.
- 70.
Due to an action brought by France that questioned the competence of the Commission to sign such an agreement on behalf of the EU. The agreement was later approved by the European Council and in this way, the conflict was resolved. See Riley, The Jellyfish Nailed? The Announcement of the EC/US Competition Co-operation Agreement, European Competition Law Review 16 (1995) 3, p. 185.
- 71.
See the website of the EU Commission at http://ec.europa.eu/competition/international/bilateral/index.html.
- 72.
See Wu, EU-China Competition Dialogue: A New Step in the Internationalisation of EU Competition Law?, European Law Journal 18 (2012) 3, p. 461 (466–467).
- 73.
The prominent examples here are the conflicts that arose in two merger cases in the 1990s and early 2000s, and the one between Boeing and McDonnell Douglas in 1996 and the other between GE and Honeywell in 2001, where the EU and US Authorities reached diverse outcomes. See Boeder and Dorman, The Boeing/Mc Donnell Douglas Merger: The Economics, Antitrust Law and Politics of the Aerospace Industry, Antitrust Bulletin XLV (2000) 1, p. 119; Patterson and Shapiro, Trans-Atlantic Divergence in GE/Honeywell Causes and Lessons, Antitrust Magazine (2001), p. 18. A similar conflict, not of the same scale nevertheless arose in relation to the recent Microsoft case, where the EU Commission imposed a very big fine to Microsoft for abuse of dominance, a decision that has been upheld by the Court (CFI, Case T-201/04, Microsoft v. Commission, [2007] ECR II-03601) and despite the fact that the company had reached a settlement on the same case with the US Authorities, more than two years before the issuance of the EU Commission’s decision.
- 74.
See Blauberger, The Governance of Overlaping Jurisdictions: How International Cooperation Enhances the Autonomy of Competition Authorities, TransState Working Papers (2009) 102, at p. 8.
- 75.
See Papadopoulos, The international dimension of EU competition law and policy, 2010, pp. 78–81.
- 76.
According to Article 12(3) of Regulation 1/2003 any exchange of information between the Commission and the Member States cannot be used by the receiving authority to impose custodial sanctions. Thus, Member States that have penalised cartels (such as the United Kingdom) may not use information received by the Commission or other Member States in order to impose custodial sanctions. In this regard, if the Commission entered into a second generation agreement that allowed for exchange of confidential information with the United States, where cartels are considered a criminal offence, it would in practice discriminate against certain other Member States that could only use such relevant information to a limited extent. See Papadopoulos, The international dimension of EU competition law and policy, 2010, p 84.
- 77.
See Schaffer and Polla, Hard vs Soft Law: Alternatives, Complements and Antagonists in International Governance, Minessota Law Review 94 (2009) 3, p. 706.
- 78.
Abbott, Keohane, Moravcsik, Slaughter and Snidal, The Concept of Legalisation, International Organisation, 54 (2000) 3, p. 401.
- 79.
Abbott, Keohane, Moravcsik, Slaughter and Snidal, The Concept of Legalisation, International Organisation, 54 (2000) 3, p. 401 (421–422). For a critique on this analysis, see Finnemore and S. J, Alternatives to “Legalization”: Risher Views of Law and Politics, International Organization 55 (2001) 1, p. 743, where the authors hold that the distinction made by Abbott and Snidal has certain limitations, as it does not take into account other important ingredients of law, such as the features and effects of legitimacy, including the need for a certain link between law and underlying social practice.
- 80.
Reismann, A Hard look at Soft Law: Panel Report, American Society of International Law, 82 (1991), p. 371 (427).
- 81.
Reismann, A Hard look at Soft Law: Panel Report, American Society of International Law, 82 (1991), p. 371 (375).
- 82.
From an international relations theory perspective, the outcome of such cooperation and development of common understandings, is the creation of transgovernmental networks. See Raustiala, The Architecture of International Cooperation: Transgovernmental Networks and the Future of International Law, Virginia Journal of International Law 43 ( 2002 ) 1, p. 51, where the author notes that power still plays a role in the relations between cooperating states and officials, nonetheless, such power is defined as “power to attract, which is different from traditional hard power, defined as the power to coerce.”
- 83.
See Parisi, Cooperation Among Competition Authorities in Merger Regulation, Cornell International Law Journal 43 (2010) 1, p. 55 (63–66), where the author nevertheless also notes that the convergence achieved is not absolute, and gives as an example the fact that the Merger Regulation of the EU provides that in the context of review of mergers a number of factors have to be taken into account, including the “economic and financial power of the merging parties,” a factor not taken into account by the US Authorities.
- 84.
See Wu, EU-China Competition Dialogue: A New Step in the Internationalisation of EU Competition Law?, European Law Journal 18 (2012) 3, p. 461.
- 85.
A notable example here is the development of EU merger rules, as noted in Parisi, Cooperation Among Competition Authorities in Merger Regulation, Cornell International Law Journal 43 (2010) 1, p. 55.
- 86.
This argument may be also linked to the work carried out in the context of international initiatives such as the ICN.
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Papadopoulos, A. (2013). External Competition Law of the EU. In: Herrmann, C., Krajewski, M., Terhechte, J. (eds) European Yearbook of International Economic Law 2013. European Yearbook of International Economic Law, vol 4. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-33917-2_5
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