Abstract
A glance at the many antitrust1 statutes of Western countries might suggest that the antitrust problem is purely domestic in character, since these laws are largely, sometimes exclusively, concerned with restrictions affecting the home market. But there is in truth no reason to expect that the antitrust problem ends at the water’s edge. Just as enterprises collude in fixing prices and allocating customers in home markets, so they concert policy in fixing export prices and allocating the world market. The major legal issue in the study is concerned with the fact that enterprises operating under the law of one country can act in a way which has anticompetitive effects in another country. To be able to control such restrictions — which are often referred to in literature as international restrictive business practices2 — and to do so in an equitable way, it may be necessary for a country to claim, or to appear to claim, “extraterritorial jurisdiction”.
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References
In North America competition law would be referred to as antitrust law. In this study these two terms are used quite interchangeably. In fact the term “antitrust law” is more convenient in the present context of law against restrictive business practices since the European Economic Community has explored many other avenues concerning competition, such as.State aids, taxes and technical barriers to trade which are not topics under the study (see 1–7).
The use of the terms “restrictive business practices” and “restraints of trade” is to replace the term “cartel”. These terms have a wider sense than the latter, i.e. they include both restrictive agreements (whether cartels among competitors or arrangements between business units from different lines of business who are not necessarily competitors) and monopolies. Such terms as are used in the study refer to all situations in which competition is absent or restricted (see Sheffer, “The Restrictive Business Practices Law” 14 Economic Quarterly 163 (H) (No. 54–55, Oct. 1967).
See H. Kronstein, The Law of International Cartels 450–456 (1973), where a survey of limited methods to ease the position of plaintiffs in matters of enforcement is given.
K. Brewster, Antitrust and American Business Abroad 39 (1958).
See United Nations Department of Economic and Social Affairs, The Impact of Multinational Corporations on Development and on International Relations Report of Group of Eminent Persons 83–86 UN Doc. E/5500/Rev. 1 St/ESA/6 (1974). See also European Parliament, Initial Report on the Communication from the Commission of the EEC to the Council (Doc.261/73) on Multinational Undertakings and Community Regulation Working Documents 1974–1975, No. 292/74, p.15, para. 20.
Treaty Establishing the European Economic Community Rome, March 1957, UNIS 298, 4 Cmnd. 5179-II.
Arts. 87 through 89 prescribe how these rules are to be implemented and administered. Art. 90 applies to public utility undertakings. Art. 91 aims at bringing to an end dumping practices, and Arts. 92 to 94 are concerned with aids granted by States.
The meaning of the term “undertaking” is set out in Chapter II of the study. See also 1–29 to 1–30. It is sufficient here to point out that this term is interchangeable with the term “enterprise”.
Normally references to nationality of enterprises, or other related corporations, are relevant with regard to the place of incorporation, a feature which often composes the traditional definition in private law of a “foreign company” (see Gower, The Principles of Modern Company Law 668 (3rd ed. 1969). However, since the doctrine of nationality may be excluded by the Treaty’s competition rules and by the facts of cases, as applicable in antitrust matters, references in the study to NCES relate to international enterprises, comprised of companies or branch-establishments, primarily operating outside the Community. References to Community enterprises relate to enterprises primarily carrying on business within the Common Market.
W. Friedmann and P. VerLoren Van Themaat, “International Cartels and Combines” in Antitrust Law; A Comparative Symposium 483 Criedmann ed. 1956).
Allen, “The Development of European Community Antitrust Jurisdiction Over Alien Undertakings” in 2 Legal Issues of European Integration 35 (1974).
Clarification of the term “legislative jurisdiction” is given in 1–16.
Jurisdiction over NCES is mentioned in the text not in the sense of personal jurisdiction but only as distinct from jurisdiction on the basis of anticompetitive conduct, although this distinction in Community law is often unclear.
Cf. A. Crotti, Trading Under EEC and United States Antitrust Laws 13–14 (1977).
See references in Bellamy, Child and Morris Common Market Law of Competition secs. 2–71 to 2–75 (2nd ed. 1978).
Jennings, “The Limits of State Jurisdiction” 32 Nordisk Tidskrift for International Ret. 209 (1962).
See Whiteman, Digest of International Law vol. 1, p.1 (1963).
For example, see Restatement (Second) of Foreign Relations Law of the United States Sec. 165 (1965) (hereinafter cited “Restatement of Foreign Relations Law”).
For an extensive treatment of the subject of jurisdiction see Whiteman supra note 19, at 216–219, and vol. 6, pp.88–183 (1965); Akehurst, “Jurisdiction in International Law” 46 Brit. Y.B. Int. L. (1975) pp.145–212; Jennings, “General Course on Principles of International Law” 121 Recueil (1967-II) pp. 515–526; Mann “The Doctrine of Jurisdiction in International Law” 111 Recueil (1964-I) pp.9–158; Jennings, supra note 18, at 209–229; Jennings “Extraterritorial Jurisdiction and the United States Antitrust Law” 33 Brit. Y.B. Int. L. (1957) 146–175.
See Oppenheim, International Law vol. 1, 19 (8th ed., Lautherpacht 1963); Salmond, Jurisprudence 75 (11th ed., Glanville Williams 1957); Fitzmaurice “The General Principles of International Law” 92 Recueil (1957-II) 216–217; Johnson, Bases of International Jurisdiction, Report of the International Law Conference 1962 (The David Davis Memorial Institute of International Studies) 33–35; Jennings, supra note 18, at 212–213; Brownlie Principles of Public International Law (2nd ed. 1973).
Research in International Law Under the Auspices of the Harvard Law School, Jurisdiction With Respect to Crime 29 Am. J. Int. L. Supp. 435 et seq. (1935)(Including an extensive bibliography of the literature)(hereinafter cited the “Harvard Research”).
For example, see the Montevideo Convention, 1940 (Secundo Congresso Sudamericano, Buenos Aires 1940) p.376 et seq.; the Draft Convention on Jurisdiction with Respect to Crime, of the Harvard Group 29 Am. J. Int. L. Supp. 439 (1935); the Report by Brierly - C. De Visscher to the League of Nations in 19 Am. J. Int. L. Supp. 253 (1926); the Resolution on International Penal Law, adopted at the International Congress for Comparative Law, held at The Hague, printed at the end of the above mentioned draft, p.644; the Resolution of the Institute de Droit International, Cambridge 1931 (Ann. II, 1931, p.235); the Conference for Unification of International Penal Law, Warsaw, 5th November, 1927 (Actes de la Conference I p.131).
See Lord Finlay, in The Case of the S.S. “Lotus”,P.C.I.J. Ser. A. No. 9 p.56 (1927). See also the opinion in this case of Judges Loder (pp.34, 35), Weiss (p.44), Nyholm (p.63), Moore (pp.92–94) and Altamira (p.95); Wheaton, Elements of International Law 270–274 (6th Eng. ed., Keith,1929); Hanbury, “The Territorial Limits of Criminal Jurisdiction” 37 Prob. of Pub. and Private Int’l Law, The Grotius Society 171 (1952); Beckett,“The Exercise of Criminal Jurisdiction Over Foreigners” 6 Brit. Y.B. Int. L. (1925) p.44; “Criminal Jurisdiction Over Foreigners” 8 Brit. Y.B. Int. L. (1927)1J8. For the viewpoint of conflict of laws see uooelrich and scoles, Conflict of Laws (1964); Cheatham, Griswold and Reese, Cases and Materials on Conflict of Laws 93 (5th ed. 1964).
Jennings, “Extraterritorial Jurisdiction and the United States Antitrust Law” 33 Brit. Y.B. Int. L. (1957) p.148.
Harvard Research, supra note 24, at 486.
Harvard Research, supra note 24, at 487.
For example, the French Code of Criminal Procedure, Art. 693.
Jennings in I.L.A., Tokyo Conference 355.
Harvard Research, supra note 24 at 494–495.
The Lotus Case, supra note 27, at 30.
Schwartz,“Applicability of National Law on Restraints of Competition to International Restraints of Competition” in Cartel and Monopoly in Modern Law vol. 2, p.715 (1961).
According to the OECD Committee of Experts on Restrictive Business Practices the criterion of “effects” is embodied in the legislation of Germany, Austria, Denmark, Spain, France, Sweden and Finalnd; it has moreover been recognized in the case law of Canada, Japan, Switzerland, the United States and the European Communities and attested by doctrine in Belgium (see OECD, Committee of Experts on Restrictive Business Practices, Restrictive Business Practices of Multinational Enterprises“ sec. 120 (1977)). See also a detailed survey of legislation of the Member States of the EEC and U.S., in that respect, in Chap. V.
Jennings in I.L.A., Tokyo Conference 356.
See Jennings, supra note 29, at 153–154.
See Brownlie, supra note 23, at 409. See also note 9 below.
See Sarkar, “The Proper Law of Crime in International Law” 11 I.C.L.Q. 462–466 (1962).
The use of these principles as a basis for jurisdiction is confined to certain qualified circumstances only; see Brownlie, supra note 23, at 297–298.
Cf. Akehurst, supra note 21, at 170; Jennings, supra note 18, at 210.
See Jennings in I.L.A., Tokyo Conference 354. Even in private law cases limitations on the extraterritorial application of the law exist where its application to events occurring in another State would thwart the economic policy of the other State.
In the Dyestuffs Cases (Cases 48, 49, 51–57/69)[1972] E.C.R. 619) the Advocate-General stated that sanctions under Arts. 85 and 86 are of administrative nature (p.697).
Regulation 17 of the Council of 6 February 1962, First Regulation Implementing Articles 85 and 86 of the Treaty, J.0. 1962, 204; 0.J. (Special Edition 1959–1962) p.87.
See Akehurst, supra note 21 at 190; Oberdorfer, Gleiss and Hirsh, Common Market Cartel Law sec. 22 at pp.33–34 (2nd. ed. 1971); Steindorff “Annotations on the Decisbn of the European Court in the Dyestuffs Cases of July 14 1972” 9 C.M.L. Rev. 510 (1972); Hug “The Applicability of the Provisions of the European Community Treaties Against Restraints of Competition to Restraints of Competition Caused in Non Member States, but Affecting the Common Market” in Cartel and Monopoly in Modern Law vol. 2, 656 (1961).
See Columbia Law School Project on European Legal Institutions; The Law of the European Economic Community vol. 2, sec. 85–04 (Surit and Herzog eds. 1976) (hereinafter cited as “Surit and Herzog”); K. Lipstein, The Law of the European Economic Community 21–45 (1974). See generally for the principle of “direct applicability” Dashwood “The Principle of Direct Effect in European Community Law” 16 J. of C.M. Studies 229 (1978).
For the meaning of “national authorities” see Barounos, Hall and James, EEC Antitrust Law; Principles and Practice 292–293 (1975).
The question. when the Commission initiates a procedure was decided by the Court in the Haecht (No.2) Case (Case 48/72 [1972] E.C.R. 77).
See Barounos, Hall and James, supra note 54, at 292–293.
La Répration des Conséquences Dommageables d’une Violation des Articles 85 et 86 du Traité Instituant la CEE, Serie Concurrence 1 (Brussels 1966). Opinions differ as to whether such private suits are possible in the U.K. According to J. Cunningham a private suit is not possible in the U.K. (Competition Law of the EEC; A Practical Guide 62 (1973)). However, for Bellamy, Child and Morris it is still an open question (see supra note 16, at 4–10).
An interview in Brussels, 2nd October, 1979. Temple-Lang indicates that a tort action could be for triple damage as is the practice in the U.S.
Cf. Akehurst, supra note 21, at 190 (see particularly n.30) and 191. See also European Parliament, Working Documents 531/76, p.10, at para. 8.
Art. 15, para. 4, provides: “Decisions taken pursuant to paras. 1 and 2 shall not be of a criminal nature”.
Act Against Restraints of Competition of 27 July 1957, as amended (the Act was consolidated in 1973). For the full text in English see OECD, Guide to Legislation on Restrictive Business Practices vol. 2, Germany 1.
Cf. Kruithof, “The Application of the Common Market Antitrust Provisions to International Restraints of Trade” 2 C.M.L. Rev. 71 (1964).
Referring to the U.S. antitrust laws Jennings states that antitrust offences manifestly come within the definition of “crime” whatever the procedure which is used. Nevertheless, “crime”, according to this opinion, never includes mere civil wrongs which may be expiated by restitution or reparation to the injured individual. See Jennings supra note 29, at 147 (the definition of “crime” in the article is based inter alia on the Harvard Research).
See Kapteyn and VerLoren van Themaat, Introduction to the Law of the European Communities: After the Accession of New Member States 25 (1973).
The subject of “public policy” in conflict of laws and its implications is discussed in every text book on the conflict of laws. See, for example, Cheshire and North, Private International Law 148 et seq (9th ed. 1974); Wolff, Private International Law 165 et seq. (2nd Ed. 1950); Ehrenzweig, A Treatise on the Conflict of Laws 342 et seq (1962).
For example, see Restatement (Second) of Conflicts of Laws Sec. 187 (1971).
See Mann, supra note 21, at 69–70; Ehrenzweig, supra note 66, at 312. A comparative study of the operation of antitrust laws which contain no specific conflict rules is found in C. Edwards, Control of Cartels and Monopolies; An International Comparison 30 (1967).
Schwartz, supra note 40, at 707 et seq. Compare the implementation of the principle of “hidden rules of conflict of laws” in U.S. antitrust jurisdiction in Kronstein, Miller and Schwartz, Modern American Antitrust Law 284–289 (1958). However, much has also been written in the U.S. in objection to this principle on the basis that normal contract law has been abandoned for the aims of antitrust policy (e.g. Haight, “International Law and Extraterritorial Application of the Antitrust Laws” and Whitney “Sources of Conflict Between International Law and Antitrust Laws” 63 Yale L.J. 639 and 655 resp. (1954).
See Smit and Herzog, supra note 33, sec. 86.04(a).
References to “undertakings” are also to be found in Arts. 52 and 80 of the EEC Treaty. Both the ECSC Treaty (Art. 80) and the EURATOM Treaty (Art. 196) contain definitions of an “undertaking” for the purposes of those treaties.
See Cohn and Simitis, “Lifting the Veil in the Company Laws of the European Continent” 12 Int. and Comp. L.Q. 218–219 (1963).
Cf. A. Deringer, The Competition Law of the European Economic Community sec. 105 (CCH ed. 1968).
Ibid. See also Bebr, Judicial Control of the European Communities Z3-7)962). However, it is noteworthy that the term “unternehmen” in the German Act Against Restraints of Competition (supra note 61), sec.1, bears the same sense as the term “undertaking” in the Treaty. The German term was translated to “enterprise” in the OECD, Guide to Legislation (see supra note 61).
Cf. R. Joliet, Monopolization and Abuse of Dominant Position: A Comparative Study ofthe American and European Approaches to the Control of Economic Power 237 (1970).
See Nebolsine, “Foreign Enterprises Under the Common Market Antitrust Rules” 38 N.Y.U.L. Rev. 481 (1963).
Cf. Jennings, supra note 29, at 153–154.
Related corporations include parents and their subsidiaries, two or more subsidiaries of a common parent (affiliates), or two or more corporations, the stock in each of which is owned by the same natural person or persons; cf. Report of the Attorney General’s National Committee on the Antitrust Laws 30 (1955).
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Barack, B. (1981). The International Dimensions of the European Economic Community Competition Rules. In: The Application of the Competition Rules (Antitrust Law) of the European Economic Community to Enterprises and Arrangements External to the Common Market. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-4482-9_1
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