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On the Extraterritorial Application of Anti-Trust Law

Author: ChenSi
Tutor: KongQingJiang
School: Zhejiang Technology and Business University
Course: Civil and Commercial Law
Keywords: anti-trust law extraterritorial application the principle of comity
CLC: D922.294
Type: Master's thesis
Year: 2008
Downloads: 141
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Abstract


With the development of global economy, the economic activity of one state would inevitably form into part of international economic cycle. The monopoly activity occurs inside one state’ territory would have negative effect on another state. However, based on the tradition territorial jurisdiction, the anti-trust law is a legal system to protect competition in the domestic market so its effect scope can only reach the territory of its sovereign jurisdiction. The contradiction between the globalization of economic activity and the localization of law is something every state has to be faced with. It is the same case at the field of anti-trust law. The extraterritorial application of anti-trust law is a possible solution. Regarding this issue, US, EU and other states or regions have already established their own theories and put them into practice. Before 1945,U.S has never applied its anti-trust law extraterritorially. In 1945, the U.S court ruled in the United States v. Aluminium&Co. of America case that the Sherman Act can be applied to the foreign enterprise. After that, relying on the ’effect doctrine’, the U.S courts apply its applied its anti-trust law extraterritorially in order to punish the foreign enterprises. In Rome Convention, EU hasn’t explicitly established the extraterritorial application of its anti-trust law. It was established by the EU Commission’s decision and the EU courts’ judgments. It relies on three theoretical doctrine: the performing place doctrine, the single entity doctrine and the effect doctrine. Among these three doctrines, the EU Commission prefers the effect doctrine. EU 4064/89 decision clearly adopted the effect doctrine. However, the EU courts prefer the performing place doctrine and the single entity doctrine and are chary of the effect doctrine although they never deny it explicitly. Under Chinese law, the rule regarding the extraterritorial application of anti-trust law is the article 2 of Anti-trust Law. Since this rule is comparatively simple so it needs to be improved. The improvement includes three aspects: First, the principle of comity, which can be set down in the bilateral agreement, should be established as the basic principle of the extraterritorial application of anti-trust law; second, the monopoly activities should be divided into different categories so that the pertinent measures can be taken; last but not least, for a long-term consideration, China should promote the unification of international anti-trust law.

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