A Study Of Effects Principle In Extraterritorial Jurisdiction Of Antitrust Law

Antitrust law is known as the constitution of the market economy,and its fundamental purpose is to maintain the order of competition in the domestic market,and for quite some time,the jurisdiction of antitrust law has been limited to the national territory.However,along with economic integration and the globalisation of competition,the cross-border business behaviour of enterprises represented by multinational corporations has brought about adverse effects on the market regulation of sovereign states.In order to ensure that the competitive order of their markets can be maintained in the face of global competition,countries are gradually focusing on the extraterritorial scope of antitrust law.The United States was the first country to break away from the traditional principles of personal and territoriality in international law and to establish in judicial practice the application of the principle of effects in the extraterritorial jurisdiction of antitrust law.Despite the controversy surrounding the initial application of the effects principle,most countries in the world with antitrust laws have now accepted or adopted the effects principle.Under the effects principle,state authorities may accept or examine and make decisions or judgments on anti-competitive practice that is committed extraterritorially but has the effect of excluding or restricting competition in the domestic market,in accordance with their own antitrust laws.Effects principle exist extraterritorially,and when judging whether a certain anti-competitive act falls within the scope of extraterritorial jurisdiction,it should not only be seen in its physical location,but also in the context of the legal relationship that extends around the relevant subject and object.The exercise of the effects principle requires the interaction of legislation,justice and enforcement,of which legislative jurisdiction is the core,and the effects principle should be used as the theoretical basis for establishing an antitrust legal system with extraterritorial effects,which should be implemented through enforcement and justice.It is precisely because of the existence of three mechanisms for the interactive exercise of jurisdiction that the legal norms corresponding to the effects principle can be defined as substantive or procedural rules in different enforcement systems.The application of the effects principle in antitrust law originated in the United States,where,as a pioneer,antitrust law is predominantly enforced by private law enforcement.The courts have adapted and improved the effects principle on the basis of a rich jurisprudence,mainly by refining the standard of the degree of effect and promoting international comity to take into account the interests of other countries.EU competition law has drawn on the lessons learned from the US and has developed a theory of extraterritorial jurisdiction that is both expansive and moderate.European Commission generally prefers the effects principle for extraterritorial jurisdiction in antitrust law,while the European Court of Justice has reservations about the effects principle and prefers the forum pratique and single economic entity doctrines,which complement each other.China has established the effects principle at the legislative level,recognizing it as the theoretical basis for extraterritorial jurisdiction in antitrust law.It is gratifying to note that,despite the short period of time since the implementation of the effects principle,China’s antitrust enforcement agencies have dared to implement the effects principle and experiment with extraterritorial jurisdiction in terms of administrative enforcement,especially in the area of the examination of concentration of operators,which has accumulated many valuable practices that can be reviewed,and public law enforcement tools are becoming increasingly mature.At the same time,it should be recognised that the application of the effects principle in China still suffers from unclear standards of impact,lack of reasonable jurisdiction and insufficient basis in private law enforcement,which may lead to arbitrary or excessive jurisdiction,contrary to China’s commitment to creating a rule of law and international business environment.It is important to know the inadequacy and move forward,look far away and practice.In order to improve the application of the effects principle in the extraterritorial jurisdiction of antitrust law,firstly,China should take the position of safeguarding national interests and respecting the reasonable interests of other countries,as well as setting foot in its own national conditions,attaching importance to international exchanges and drawing on the experience of other countries.Secondly,China should set reasonable boundaries for the effects principle in the extraterritorial jurisdiction of antitrust law,scientifically design the hierarchy of rules in the legislative jurisdiction,establish substantial and reasonably foreseeable standards for the degree of effects,and attach importance to the external limits of the effects principle such as international comity.Finally,in view of the lack of experience in private law enforcement of antitrust law in China,consideration may be given to establishing the extraterritorial jurisdiction of domestic courts over antitrust by the effects principle,so that enterprises or consumers aggrieved by antitrust violations can bring civil actions directly to court against the offending extraterritorial enterprises.