Table of Contents

Microsoft on Trial

Microsoft on Trial

Legal and Economic Analysis of a Transatlantic Antitrust Case

New Horizons in Competition Law and Economics series

Edited by Luca Rubini

This fascinating and highly relevant book facilitates discussion on the difficult technical, legal and economic issues with respect to innovation, competition and welfare raised, through the span of more than a decade, by the US and EC Microsoft antitrust cases. It assesses their impact on the evolution of European and US laws on competition and intellectual property in the IT sector and beyond.

Chapter 14: Beyond Microsoft: An International Agreement on Abuse of Market Power?

Carlo Petrucci

Subjects: economics and finance, competition policy, law and economics, law - academic, competition and antitrust law, european law, law and economics


Carlo Petrucci 1. INTRODUCTION Competition law of the United States, European Union and numerous other countries, applies to firms operating outside their territory. By relying on the distinction between conduct and effect, states and countries may assert jurisdiction to apply their competition law when the effects of business conduct materialize within their territory, regardless of where a firm is incorporated and/or operates. In the United States, the extraterritorial application of domestic competition law is called ‘effect doctrine’ (United States v Aluminium Co. of America),1 and in the European Union ‘implementation doctrine’ (Wood Pulp).2 In both cases the parties’ conduct took place outside the US and EU territory, but since the effects materialized in their territory, the US and EU courts asserted jurisdiction to apply domestic antitrust laws. Both cases concerned cartels, in the first case a quota system for imports among aluminium producers and in the second an agreement in the wood pulp market entered into by producers and trade associations. Although the foundational cases of extraterritorial application of competition law are cartels, there has been little doubt that all competition rules apply to international transactions such as regulation of mergers and unilateral conduct. Internationalization of competition law is not a new matter. In the past, initiatives towards common antitrust rules were promoted, but they have always been unsuccessful.3 The issues related to extraterritoriality of com- 148 F.2d 416 (2d Cir. 1945). Joined Cases 89, 104, 116-117 and 125–129/85 Ahlstrom Oy v Commission [1988] ECR 5193, para....

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