This website uses cookies to ensure you get the best experience on our website. Learn more

Law Notes Competition Law Notes

Extraterritoriality Notes

Updated Extraterritoriality Notes

Competition Law Notes

Competition Law

Approximately 389 pages

Competition Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB and BCL competition law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Canada, Hong Kong or Malaysia (University of London).

These were the best Competition Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through forty-eight LLB samples from outstanding l...

The following is a more accessible plain text extract of the PDF sample above, taken from our Competition Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:



An infringement of competition law may have consequences within territory X even though the conduct that caused those consequences occurred, and may have even been completed, in territory Y.

To protect domestic markets, X’s competition agency may extend their jurisdiction beyond the boundaries of X and apply national laws to activities that may have been cleared by Y.

Traditional ‘territoriality’ principle – X has power to make laws to affect conduct within territory X or to regulate conduct completed within territory X. Extraterritoriality departs from this.

The extension of the territoriality principle relies on one of two concepts:

  1. Effects doctrine;

  • Extends jurisdiction where transaction has an effect within given territory.

  • Favoured notably in USA.

  1. Implementation doctrine.

  • More restrictive, requiring ‘implementation’ within given territory as a condition for extraterritorial application of national laws.

1 – Grounds for extension of territoriality principle

1.1 – Single economic entity

Single economic entity doctrine states that parent companies and subsidiaries form a single economic entity – where a parent company or subsidiary are based in EU, EU competition law has jurisdiction.

  • ICI Dyestuffs [1972]: Fact that a subsidiary has a separate legal personality is insufficient to exclude possibility of imputing its conduct to the parent company.

  • This is particularly the case where subsidiary does not decide independently on its own conduct on the market – carries out instructions given to it by parent company.

  • Formal separation of companies, resulting from separate legal personality, does not outweigh unity of their conduct on the market for purposes of applying competition rules.

NOTE: This is the most straightforward doctrine to establish EC jurisdiction – requires a parent company or subsidiary to be based in EU.

1.2 – Implementation doctrine

Jurisdiction under EU law exists over firms based outside it if they implement anticompetitive conduct within the EU, even if it was agreed on outside the EU (Wood-pulp II [1993]).

  • Producers established in countries outside EU (e.g. USA/Canada) engage in competition within the internal market where they:

  1. Sell directly to customers established in EU; and

  2. Engage in price competition to win orders from those customers.

  • If competition rules to depend on place of formation, would be too easy to evade. Implementation thus decisive factor.

So, where if D had no recourse to parent companies or subsidiaries based in EU, it does not matter if they implement the agreement within the internal market. Focus is not on the formation of the agreement, but its implementation.

Mere fact that X did not sell the product to EU purchasers does not preclude implementation – abuse of dominant position, for example, can be the grant of financial incentives (as it was in Intel (GC)).


Say X and Y, both based in the USA but with global operations (i.e. they sell within the internal market) both have their prices set at 100. They then agree that they shall not increase or decrease their prices in the EU beyond the range 90-110, but do not actually change their prices (their current price is in the middle of the range). Have they implemented their agreement within the EU yet given nothing has changed in actual pricing terms from prior to the agreement being formed?

Admittedly, the above is quite academic, given the “qualified effect” condition would likely be met because there is an “immediate, substantial and foreseeable” effect insofar as prices are barely going to be changed heading into the future.

It is likely that the threshold would be very low once a price fixing agreement starts to be discussed – EC would probably take not changing prices as implementation of the agreement itself.

1.3 – Qualified effects doctrine

Application of EUMR (and EU competition law more broadly) justified under public international law where it is foreseeable that proposed concentration will have an immediate, substantial and foreseeable effect in the EU (Gencor [1999]).

Gencor [1999] appeared to endorse the effects doctrine; ECJ’s endorsement was later confirmed in the Intel judgements in General Court and ECJ.

  • Intel (GC): Implementation doctrine and qualified effects doctrine are alternative benchmarks for establishing extraterritorial application of EU competition rules.

  • Implementation:

  • Held in Wood-pulp II [1993] that necessary to distinguish formation or agreement from implementation thereof.

  • Qualified effects of the practices in the EU:

  • Gencor [1999]: Require an immediate, substantial and foreseeable effect in EU.

  • EC does not have to establish actual effects to justify its jurisdiction.

  • EC cannot be expected to adopt a passive position where there is a threat to effective competition in the internal market – may intervene where threat:

  1. Did not materialise; or

  2. Has not yet materialised.

  • Intel (ECJ): Confirmed Intel (GC) – both tests can be used to establish jurisdiction of EC under public international law to punish conduct adopted outside EU.

  • Both tests pursue the same objective – ‘preventing conduct which, while not adopted in the EU, has anticompetitive effects liable to have an impact on the EU market’.

  • When...

Buy the full version of these notes or essay plans and more in our Competition Law Notes.