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Extraterritorial application of the EEC–competition law*

Published online by Cambridge University Press:  07 July 2009

A.Th. S. Leenen
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Extract

The scope of application of Articles 85 and 86 of the EEC Treaty is not limited to undertakings which have been established within the Community. Undertakings which have been established outside the Community and which restrain competition inside the Common Market can come within the scope of application of the EEC competition law. In a growing Number of cases, the EuropeanCommission and the Court of Justice of the EEC have applied the Articles 85 and 86 to undertakings which had their seats in third countries.

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Articles
Information
Netherlands Yearbook of International Law , Volume 15 , December 1984 , pp. 139 - 166
Copyright
Copyright © T.M.C. Asser Press 1984

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References

1. See about the practice of the Commission in recent years especially the Sixth Report on Competition Policy, para. 37 et seq.; Eighth Report on Competition Policy, p. 16: Eleventh Report on Competition Policy, para. 38 et seq.; Twelfth Report on Competition Policy, para. 157.

2. Case 36/74, Walrave and Koch v. Union Cycliste Internationale, Judgment of 12 December 1974, ECR (1974) p. 1421.

3. Eleventh Report on Competition Policy, para. 36.

4. J. Thiesing, in: van der Groeben, H. et al. , Handbuch für Europäische Wirtschaft, Bd. 6 A, IA 50, p. 13Google Scholar; Kapteyn, P.J.G. and VerLoren van Themaat, P., Inleiding tot het recht van de Europese Gemeenschappen (1980) p.321.Google Scholar

5. Thiesing, loc.cit.

6. See the translation of the decision reproduced in: D.J. Gijlstra (ed.), Competition law in Western Europe and the USA, Kluwer, looseleaf, Part BCM/M/I-6.

7. Gijlstra (ed.), loc.cit., p. 246.

8. OJ (1978) L 70/54.

9. OJ (1979) L 21/16.

10. Common Market Law Reports 1983, p.703.

11. Gijlstra (ed.), loc. cit., Part A, p. C.M.L. III-15.

12. Sixth Report on Competition Policy, para. 37.

13. Eleventh Report on Competition Policy, para. 34–35.

14. Eleventh Report on Competition Policy, loc. cit.

15. Text of the speech of Mr. F. Andriessen of 12 June 1982, p.9.

16. See Eleventh Report on Competition Policy, para. 35.

17. ECR 1972, p. 693.

18. ECR 1972, loc. cit.

19. Case 22/71, Béguelin v. Import-Export, Judgment of 25 November 1971, ECR (1971) p. 959.

20. Thiesing, loc. cit.; Meng, W., “Neuere Entwicklungen im Streit um die Jurisdiktionshoheit der Staaten im Bereich der Wettbewerbsbeschränkungen”, 41 ZaöRV (1981) p. 490Google Scholar; Mok, M.R. and Duk, R.A.A., Handelingen van de Nederkndse Juristenvereniging, (1980) Part One, Second Piece, p. 83.Google Scholar

21. See the observations of the Commission in the Eleventh Report on Competition, para. 36.

22. Case 28/77, Tepea v. Commission, Judgment of 20 June 1978, ECR (1978) p. 1391.

23. See on the meaning of this term: case 9/69, Völk v. Vervaecke, Judgment of 9 July, 1969, ECR 1969, p. 295 and the Announcement of the Commission of 19 December 1977 concerning minor agreements which are not covered by Article 85(1) of the EEC Treaty, OJ (1977) C 313/3.

24. Case 60/81, IBM v. Commission, Judgment of 11 November 1981, ECR (1981) p. 2639.

25. See Meessen, K.M., Völkerrechtliche Grundsätze des internationalen Kartellrechts, (Baden-Baden, 1975) p. 56.Google Scholar

26. See, e.g., Rahl, J., Common Market and American Antitrust (1970) p. 392 et seq.Google Scholar

27. Meessen, loc. cit., p. 59 et seq. Moreover, in the draft Restatement of foreign relations law (revised) a different approach has been adopted. In this draft, a state must be held not toapply its law to aliens when the exercise of such jurisdiction is “unreasonable”. The concept of reasonability has been specified by a number of criteria for extra territorial jurisdiction. See also the comment of Maier, H.G., “Extraterritorial jurisdiction at a crossroads: an intersection between public and private international law”, 74 AJIL (1982) p. 300 et seq.Google Scholar

28. See, for instance, Akehurst, M., “Jurisdiction in international law”, 46 BYIL (1972-1973) p. 167Google Scholar; Brownlie, I., Principles of public international law, 3rd ed. (1979) p. 298 et seq.Google Scholar; Mann, , “The doctrine of jurisdiction in international law”, Hague Receuil (1964)p. 46 et seq.Google Scholar; van Themaat, P. VerLoren, “Het internationale bedrijfsleven en dewetgeving van de nationale welvaartsstaat”, Volkenrechtelijke Opstellen, Zwolle (1957) p. 213Google Scholar; Meng, loc. cit., p.513.

29. See, for instance, Verdross, A. and Simma, B., Universelles Völkerrecht, (Berlin, 1976), p. 502 et seq.Google Scholar; Meessen, op. cit., p. 74 et seq.; cf. Sørensen, M., (ed.) Manual of public international law (London, 1978), p. 372 et seq.Google Scholar; see also the PCIJ Lotus judgment, PCIJ Reports Series A, no. 10.

30. See, for instance, Rehbinder, , “Extraterritoriale Wirkungen des deutschen Kartellrechts” (Baden-Baden, 1965), p. 67Google Scholar, with further references; Schwarz, I.E., Deutsches internationales Kartellrecht (Köln, 1962) p. 253.Google Scholar

31. Meessen, op.cit., p. 97, with further references.

32. Rahl, op.cit., p. 398 et seq.; see also section 6 of the ILA Resolution, quoted by Meessen, op. cit., p. 60.

33. Akehurst, loc. cit., p. 160; Rahl, op. cit., p. 401, with further references; Brownlie, op.cit., p. 304; cf., Barcelona Traction, Light and Power Company case (second phase), ICJ Rep. (1970) p. 32, para. 34.

34. Rahl, op. cit. p. 402.

35. See the references by Meessen, op. cit., p. 97 and by Rehbinder, op. cit., p.71.

36. See e.g. Jennings, R.Y., “Extraterritorial Jurisdiction and the United States Antitrust law”, 33 BYIL (1957), p.159 et seq.Google Scholar; Mann, loc. cit., p. 100 et seq.; Verzijl, J.H.W., “The Controversy Regarding the so-called Extraterritorial Effect of American Antitrust Laws”, 8 NTIR (1961) p. 3Google Scholar; Sørensen, op. cit., p. 372 et seq.

37. VerLoren van Themaat, loc. cit., p. 213.

38. Jennings, loc. cit., p. 159.

39. Jennings, idem.

40. Verzijl, loc. cit., p. 29.

41. See, e.g., Ellis, J.J.A., “Extraterritorial application of anti-trust legislation”, 17 NTIR (1970), p. 59Google Scholar; Snijders, W.L., Social-Economisc he Wetgeving (1961), p. 19Google Scholar; Weebers, A.J.M., Controle op intemationale kartels (Zwolle 1957), p. 29Google Scholar; see also the references by Rehbinder, op.cit., n. 62, p. 75.

42. See, e.g., Akehurst, loc. cit., p. 201; Rehbinder, op. cit., p. 71.

43. See, e.g., Mann, loc. cit., p. 49 et seq.; Meessen, op.cit., p. 101; Mok and Duk, op.cit., p. 81 et seq.; cf., Bunte, K., Wirtschaft und Wettbewerb (1981) p. 605Google Scholar; Meng, loc. cit., p. 502 et seq.

44. See Ellis, loc. cit., p. 59; cfr., VerLoren van Themaat, loc. cit., at p. 213; Verzijl, loc. cit., p. 29 et seq.

45. Meessen, loc. cit., p. 98 et seq.

46. Mok and Duk, loc. cit., p. 59.

47. See, as far as the work of Mok, and Duk, is concerned, Handelingen van de Nederlandse Juristenvereniging (1980) Part Two, p. 63 et seq.Google Scholar

48. Meessen, loc. cit., p. 97.

49. H.R. 6 april 1915, NJ. 1915, No. 427; see also Singapore case, HR 6 april 1954, NJ 1954, no. 368; see Hazewinkel-Suringa, D.Inleiding tot de studie van het Nederlandse strafrecht, 8th ed. (Alphen a/d Rijn (1983)), p. 193.Google Scholar

50. Meessen, loc. cit., p. 101.

51. Mok and Duk, loc. cit., p. 77.

52. Meessen, loc. cit.; Mann, loc. cit., p. 46.

53. ICJ Rep. 1970, p. 42.

54. PCIJ Rep., Series A, no. 10.

55. Meessen, loc. cit., p. 102.

56. Turner, J., “Die Lösung von Zuständigkeitskonflikte bei der Anwendung nationaler Wettbewerbsvorschriften”, Wirtschaft und Wettbewerb (1982) p.5Google Scholar; Bunte, loc. cit., p. 617; cf., Akehurst, loc. cit., p. 188 et seq.

57. See especially Timberlane Lumber Co. v. Bank of America, 549 F 2d. 597 (1976); Mannington Mills Inc. v. Congoleum Corp. 595 F 2d. 1287 (1979); see also the comment on these cases by Hermanns, F., Revue Internationale de la Concurrence (1981) p. 9 et seq.Google Scholar; Sornarajah, M., “The extraterritorial enforcement of U.S. Antitrust laws: conflict and compromise”, 31 ICLQ (1982) p. 127 et seq.CrossRefGoogle Scholar; Meng, loc. cit., p. 483 et seq.; see also: “Extraterritoriality: Conflict and Overlap in National and International Regulation”, Proceedings of the 74th annual meeting of the American Society of International Law, Washington (1980), p. 30 et seq.Google Scholar

58. BGB 1976 II, p. 1711; cf. the treaty between the US and Australia, 21 ILM (1982) p. 702.

59. Kruithof, R., “The application of the common market anti-trust provisions to international restraints of trade”, 11 CMLRev. (1964/1965) p. 81Google Scholar; cf., Meng, loc. cit., p. 513.

60. Meijers, H., “How is International Law Made? The Stages of Growth of International Law and the Use of its Customary Rules”, 9 NYIL (1978) p. 3 et seq.CrossRefGoogle Scholar; Brownlie, loc. cit. p. 8.

61. See, for instance, the practice of the Federal Republic of Germany, which has adopted the effects-doctrine for its own Gesetz gegen Wettbewerbsbeschränkungen, but which has issued measures countering extraterritorial application of foreign competition laws in the field of liner conferences, see Bunte, loc. cit., p. 607.

62. ILM (1976) p. 1282.

63. Article 2(3) of the Agreement.

64. See Ninth Report on Competition Policy, para. 33. See for the text of this recommendation the appendix to this article.

65. ILM (1980) p. 813 et seq.; this document has been adopted at the 35th meeting of the General Assembly of the United Nations; see United Nations Press Release GA/6375 of January 21, 1981, p. 205.

66. ILM (1980) p. 820.

67. The Federal Republic of Germany has adopted blocking measures only in the field of liner conferences, see Bunte, loc. cit., p. 607.

68. This enumeration is taken from Bunte, loc. cit., and the intervention of Storm, P.M. in Handelingen van de Nederhndse Juristenvereniging (1980) Part Two, p. 67 et seq.Google Scholar

69. See also decisions reproduced in Ham, A.D., “Wet Economische Mededinging”, Schuurman en Jordens-editie Nederlandse Staatswetten, no. 12 (1979), p. 149 et seq.Google Scholar

70. See Halbury's Statutes of England (1980) p. 258 et seq.; see also the comments by Kapranos, Huntley, “The protection of trading interests act 1980: some jurisdictional aspects of enforcement of antitrust laws”, 30 ILCQ (1981) p. 213 et seq.Google Scholar and Blythe, M.A., “The extraterritorial impact of the anti-trust laws: protecting British trading interests”, 31 AJCL (1983) p.99 et seq.CrossRefGoogle Scholar

71. This conclusion is also drawn by Storm, loc. cit.

72. See, e.g., the protests of the British Government relating to the mineral oil-case of 1952 and of the Dutch Government at several occasions, referred to by Meessen, op. cit., p. 145 et seq.

73. See the protest of the British Government in the Dyestuffs case, referred to by Meessen, op. cit.

74. Meessen, op. cit., p. 146.

75. Meessen, op. cit., p. 145; Brownlie, op. cit., p. 310; Blythe, loc. cit., p. 124, n. 132.

76. See above, para. 2.5.

77. Series A, no. 10.

78. Series A, no. 10, p. 19.

79. See Mann. loc. cit., p. 35; Brownlie, op. cit., p. 302; Meessen, op. cit., p. 75.

80. Schwarzenberger, G., AND Brown, E.D., A Manual of International Law, (Milton, 1967), p. 64 et seq.Google Scholar; Greig, N., “International Law”, 2nd ed., 1976 p. 211 et seq.Google Scholar; von Glahn, G., “Law among nations”, 2nd edn, 1970 p. 214 et seq.Google Scholar; Verdross and Simma, op. cit., p. 502; Tammes, A.J.P., Internationaal Publiekrecht (2nd edn., 1973), p.152 et seq.Google Scholar

81. ICJ Rep. (1951) p. 116.

82. ICJ Rep. (1955) p. 4.

83. ICJ Rep. (1951) p. 132.

84. ICJ Rep. (1949) p. 174 et seq.

85. ICJ Rep. (1970) p. 38 et seq.

86. Cf., the dissenting opinion of Fitzmaurice in the Barcelona Traction case, ICJ Rep. (1970) p. 105.

87. Meessen, op. cit., p. 203 et seq.; Meng, loc. cit., p. 505; Mann, loc. cit., p. 47; these fundamental limitations to the jurisdiction of states can be derived from the relevant norms of soft law which are formulated in the Declaration on principles of international law concerning friendly relations and co-operation among states in accordance with the Charter of the United Nations, A/Res/2615/XXV and the Final Act of Helsinki; see about this Final Act also: van Dijk, P., “The Final Act of Helsinki – Basis for a Pan-European system?”, 9 NYIL (1980) p. 97 et seq.CrossRefGoogle Scholar

88. See the Statement of the Commission: “Gazoduc-observations de la Communauté à l'égard des mésures prises par le gouvernement Américan” of 12 August 1982, p. 5; see also the AideMémoire of the Commission delegation of 13 March delivered at the State Department on 24 March 1983.

89. See, e.g., Schwarzenberger, G., “The principles and standards of international economic law”, Hague Receuil (1966) p.43Google Scholar; See also the principles contained in Art. 2–6 of the Charter of Economic Rights and Duties, Res. General Assembly of the UN of 12 December 1974 (3281–XXIX); cf., Carreau, et al. , Droit international économique, 2nd ed. (1980) p. 82Google Scholar and VerLoren van Themaat, P., The changing structure of international economic law (The Hague, 1981), p. 17 et seq.Google Scholar

90. See de Waart, P.J.I.M., The element of negotiation in the pacific settlement of disputes between states”, (The Hague, 1973) p. 30.Google Scholar

91. Bunte, op.cit., and Turner, loc.cit.; see, however, Meng, loc. cit., p. 513.

92. ICJ Rep. (1949) p. 174 ct seq.

93. ICJ Rep. (1970) p. 42.

94. Art. 15 of Regulation 17/62. See for the text of this regulation OJ: special edition (1959–1962) p. 87.

95. Mann, loc. cit., p. 61 et seq.; Brownlie, op. cit., p. 306 et seq.; Meng, loc. cit., p. 500; see, however, Akehurst, loc.cit., p.178.

96. Art. 14 of Regulation 17/62.

97. Art. 15 of Regulation 17/62.

98. Art. 16 of Regulation 17/62.

99. See the Twelfth Report on Competition Policy, para. 157: “There have been bilateral contacts with the antitrust authorities of several OECD member countries in the course of Community proceedings involving firms from those countries. With the agreement of the Member States' authorities, non-Community antitrust authorities were for the first time admitted as observersat the oral stage of proceedings concerning firms from their countries”.

100. OJ (1974) C 61/20.

101. OJ (1978) L 242/15.

102. Mok and Duk, op. cit., p. 57.

103. OJ (1978) L 70/54.

104. See, e.g., the circumstances undei which the proceedings against Hoffmann–La Roche have taken place as reproduced by T.J. Bennet in ELRev. (1979) p. 210 et seq.

105. Eleventh Report on Competition Policy, para. 37. In practice, the problems mentioned hereabove have been solved by the European Commission mainly in two ways. In several cases, public international legal problems could be avoided (i) by addressing the relevant decisions to subsidiaries established inside the Common Market or (ii) by posting the decision directly to the enterprise outside the Common Market. See on this practice Barack, B., The application of the competition rules of the European Economic Community, (Deventer 1981), p. 231 et seqGoogle Scholar. Decisionsaddressed to non-European Community enterprises may under certain circumstances be executed against assets of those enterprises within the Common Market, provided that a sufficient connection with the behaviour of the enterprise inside the Common Market can be established: see Barack, idem., p. 287. On the other hand, the European Commission has admitted its lack of right or inability to pursue effective coercion measures abroad.

106. Case 52/69, Geigy v. Commission, Judgment of 14 July 1972, ECR (1972) p. 823.

107. Geigy v. Commission judgment, loc. cit.

108. Cases 48/69, 52/69, ICI, Geigy and Sandoz v. Commission, Judgment of 14 July 1972, ECR (1972) pp. 619, 787 and 845. See on this practice also Canenbley, C. (ed.), enforcing Antitrustagainst foreign enterprises, Deventer (1981) p. 33 et seq.CrossRefGoogle Scholar