Research Handbooks in Comparative Law series
Edited by John Duns, Arlen Duke and Brendan Sweeney
Chapter 13: International governance of competition and the problem of extraterritorial jurisdiction
One of the challenges facing competition regulation is the ever-increasing internationalization of commerce. Radical improvements in transport and communications have ensured that commercial activities occurring in one state can have dramatic effects in other states. Unlike commerce, however, competition law remains essentially domestic. This disconnect between the realities of modern commerce and the source of its regulation has forced states to confront the boundaries of their legitimate regulatory reach and to investigate new regulatory models. In an interconnected world it is unrealistic to expect states to adopt a strict territorial approach to protecting their legitimate interests. A state has a legitimate right to intervene in activities that are directed at its economic well-being even where those activities occur outside its territorial boundaries. This is so because the state has a legitimate right to protect its citizens against economic exploitation. At the same time, the state in which the activities occur clearly has a legitimate right to regulate activities occurring within its borders. This right is rooted in the notion of state sovereignty, which traditionally accords the state authority over activities occurring in its own territory. Thus we have a situation of concurrent jurisdiction. These occasions of concurrent jurisdiction are constantly being created. This is because of regime diversity (both in competition law and, more generally, legal systems) and because competition rulings are based primarily on domestic considerations (that is, local welfare or other considerations, not the welfare or otherwise of foreigners), these occasions are also sometimes contested.
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