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Petrucci, Carlo --- "Beyond Microsoft: An International Agreement on Abuse of Market Power?" [2010] ELECD 486; in Rubini, Luca (ed), "Microsoft on Trial" (Edward Elgar Publishing, 2010)

Book Title: Microsoft on Trial

Editor(s): Rubini, Luca

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848442443

Section: Chapter 14

Section Title: Beyond Microsoft: An International Agreement on Abuse of Market Power?

Author(s): Petrucci, Carlo

Number of pages: 24

Extract:

14. Beyond Microsoft: an international
agreement on abuse of market
power?
Carlo Petrucci

1. INTRODUCTION

Competition law of the United States, European Union and numerous
other countries, applies to firms operating outside their territory. By
relying on the distinction between conduct and effect, states and countries
may assert jurisdiction to apply their competition law when the effects of
business conduct materialize within their territory, regardless of where a
firm is incorporated and/or operates.
In the United States, the extraterritorial application of domestic com-
petition law is called `effect doctrine' (United States v Aluminium Co. of
America),1 and in the European Union `implementation doctrine' (Wood
Pulp).2 In both cases the parties' conduct took place outside the US and
EU territory, but since the effects materialized in their territory, the US and
EU courts asserted jurisdiction to apply domestic antitrust laws. Both cases
concerned cartels, in the first case a quota system for imports among alu-
minium producers and in the second an agreement in the wood pulp market
entered into by producers and trade associations. Although the founda-
tional cases of extraterritorial application of competition law are cartels,
there has been little doubt that all competition rules apply to international
transactions such as regulation of mergers and unilateral conduct.
Internationalization of competition law is not a new matter. In the past,
initiatives towards common antitrust rules were promoted, but they have
always been unsuccessful.3 The issues related to extraterritoriality of com-


1 148 F.2d 416 (2d ...