Does the law apply to conduct that occurs outside the jurisdiction?

Cartels

Turkey Small Flag Turkey

Turkey is one of the ‘effect theory’ jurisdictions, where what matters is the effect that a cartel activity has produced on Turkish markets, regardless of (i) the nationality of the cartel members, (ii) where the cartel activity took place, or (iii) whether the members have a subsidiary in Turkey. See; Rail Cargo Logistics, 15-44/740-267, 16.12.2015; Güneş Ekspres/Condor, 11-54/1431-507, 27.10.2011; Imported Coal, 10-57/1141-430, 02.09.2010; Refrigerator Compressor, 09-31/668-156, 01.07.2009. It should be noted that however, the Board has yet to enforce monetary fines or other sanctions against undertakings located outside of Turkey without any presence in Turkey, as this is mostly due to the enforcement handicaps (such as difficulties of formal service to foreign entities).

Australia Small Flag Australia

Yes, the cartel provisions apply to conduct outside Australia in certain circumstances:

  • the cartel conduct must be in “trade or commerce within Australia or between Australia and places outside Australia”; and
  • for conduct outside Australia, the cartel provisions apply to:
    • either body corporates incorporated or registered within Australia or “carrying on business” within Australia; or
    • Australian citizens; or
    • persons ordinarily resident within Australia or “otherwise connected with” Australia

Mexico Small Flag Mexico

While the FCA is territorial in reach, it vests upon the enforcing agencies the ability to pursue conduct that has effects in the Mexican markets. Thus, conduct occurring abroad but having tangible effects in Mexico may still be pursuable under the FCA, although from a practical perspective and due to procedural rights in Mexico, enforcers may face challenges in pursuing companies or individuals with no meaningful ties with Mexico.

Brazil Small Flag Brazil

Yes, the provisions of the Antitrust Law also apply to conducts that occur outside Brazil, as long as the potentiality of effects in the Brazilian territory is confirmed.

Finland Small Flag Finland

Yes, any conduct which has an effect on the Finnish market or a part thereof, regardless of where the conduct takes place falls under the Competition Act and the jurisdiction of the FCCA.

Canada Small Flag Canada

The cartel prohibitions apply only where a Canadian court has subject matter and personal jurisdiction over the accused. As for subject matter jurisdiction, the Supreme Court has confirmed that a “real and substantial link” must exist between the offence and Canada, in order for the accused to be convicted of the offence in Canada (see Libman v The Queen, [1985] 2 SCR 178). This test has yet to be applied to an international conspiracy offence. With respect to personal jurisdiction, in Canadian criminal law, the accused needs to be located within the territory of the court or to attorn to the court’s jurisdiction.

Section 46 provides another avenue for applying the Act to extra-territorial conduct, making it a criminal offence for a corporation carrying on business in Canada to implement a foreign directive for the purpose of giving effect to a conspiracy entered into outside of Canada, which would have been in contravention to section 45 if entered into in Canada.

China Small Flag China

Article 2 of the AML stipulates jurisdiction over extraterritorial monopolistic conducts, but only if it eliminates or restricts the market competition within China. In the past decade, there have been a large number of cases showing that despite the conducts happened outside the territory of China, it is still subject to the regulation of Chinese AMEA.

United States Small Flag United States

The extraterritorial reach of US antitrust laws is governed by the concepts of personal jurisdiction and the application of the Foreign Trade Antitrust Improvements Act [FTAIA]. US courts analyse whether the participants in a cartel (companies and individuals) have enough contacts with the forum to satisfy the exercise of jurisdiction. The courts have held that a defendant who ‘purposefully avails’ itself of the benefits of the forum, such that it invokes the protections of the forum’s law, is subject to the jurisdiction of that forum.

The FTAIA and the cases interpreting it govern the scope of US antitrust laws. Under the FTAIA, foreign conduct falls within the scope of US antitrust laws if the conduct: i) arises under the US antitrust laws; and ii) has a direct, substantial and reasonably foreseeable effect on US commerce. Case law suggests that wholly foreign commerce, in which a defendant does not cause the product at issue to come into the US, may not satisfy the FTAIA as the conduct does not ‘arise under’ the US antitrust laws.

Japan Small Flag Japan

Yes. The Japanese Supreme Court has found that Japanese Antimonopoly Act can be applied to cartels that took place outside of Japan so long as such conduct would distort free competition in the domestic Japanese market (Supreme Court decision, December 12, 2017).

Malaysia Small Flag Malaysia

As mentioned in the answer to Question 1.1, the CA applies to any commercial activity transacted outside Malaysia which has an effect on competition in any market in Malaysia.

Switzerland Small Flag Switzerland

The Cartel Act applies to all concerted practices and agreements that have a direct, substantial and reasonably foreseeable effect within Switzerland (effects doctrine). The mere possibility of effects is sufficient.

Israel Small Flag Israel

The Competition Law is a territorial law in its nature. The purpose of the Competition Law is to promote the welfare of the Israeli consumer by maintaining and promoting competition in Israel. According to statements published by the Competition Commissioner, arrangements whose entire scope and effect are on markets outside of Israel were not treated, in general, under the provisions of the Competition Law. However, the Competition Law does apply to actions and arrangements made outside of Israel and that may affect the Israeli market. For example, foreign companies that coordinating a bid for a tender that take place in Israel would violate the Competition Law, even if the entire coordination, i.e. all the elements of the offence, was carried out outside of Israel.

On September 16, 2013, the Competition Commissioner published a ruling regarding the GIS market, according to which various companies, including Alstom, Siemens and ABB, were parties to a binding arrangement since between the years of 1988 and 2004, the abovementioned companies used, according to the claim, to divide the market of the sale of global GIS, and to coordinate bids submitted to tenders, among others, to the Israel Electric Corporation (the "IEC"). In this regard, according to the Competition Commissioner’s ruling, the entire coordination was conducted outside of Israel, and the submission of the bids for the tenders was made by third parties. However, the Competition Authority conducted a criminal investigation, summoned foreign witnesses, and eventually published a ruling regarding the existence of a binding arrangement that even led to the filing of a class action and a tort claim by the IEC against the companies that were mentioned in the ruling.

Spain Small Flag Spain

The reference in Article 1 of the Competition Act 2007 to agreements, decisions and concerted practices that restrict competition ‘in all or part of the Spanish market’ is interpreted according to the general principle of the place of implementation, developed by the Court of Justice of the EU (“CJEU”) (see, for instance, judgment of 20 January 1994 in joined cases 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85, A. Ahlström Osakeyhtiö and Others v Commission, paragraphs 16 to 18). That principle is an expression of the international public law principle of territoriality and determines that the agreement, decision or concerted practice in question must be intended to be implemented in Spain for Article 1 of the Competition Act 2007 to apply. Whether Article 101 TFEU also applies depends on whether it considered that trade between Member States may be affected.

Romania Small Flag Romania

The Competition Law applies to extraterritorial anticompetitive behaviour, inasmuch as it affects competition on the Romanian market. There has recently been a case (indicated in the last section of this paper) where the extraterritorial reach of the Competition Law is clear.

United Kingdom Small Flag United Kingdom

The Chapter I prohibition applies if the agreement, decision or practice is or is intended to be implemented in the UK. Similarly, the criminal cartel offence will apply to an agreement outside the UK if it is, or is intended to be, implemented in whole or in part in the UK.

EU Small Flag EU

Article 101 can apply to conduct that occurs outside the EU if it is ‘foreseeable’ that the conduct will have an ‘immediate and substantial effect’ in the EU (C-413/14P - Intel v Commission).

EU courts have recognised that to establish an infringement of Article 101 it is not necessary that the companies involved in the alleged cartel activity have their seats inside the EU, that the relevant agreements were entered into inside the EU, or that the alleged acts were committed within the EU. There are numerous cases in which the Commission assumed jurisdiction over cartel members incorporated outside the EU, including Automotive Bearings (Case COMP/39922), Optical Disc Drives (Case COMP/39639), Alternators and Starters (Case COMP/40028) and Capacitors (Case COMP/40136).

Argentina Small Flag Argentina

The provisions of the Antitrust Law apply to all individuals and entities that carry out business activities within Argentina, and those that carry out business activities abroad to the extent that their acts, activities or agreements may affect the Argentinian market (the effects theory).

Applied to anticompetitive practices, those acts carried out abroad, but with substantial, normal and regular effects in Argentina, could be investigated and punished by the Antitrust Law.

Norway Small Flag Norway

Section 5 of the Competition Act establish that the law apply to any conduct implemented or with effect within the Kingdom of Norway. Hence, the conduct in question does not need to have taken place in Norway, nor does the undertakings involved need to have a presence in Norway.

Belgium Small Flag Belgium

Belgian competition law applies to conduct that has an effect on the Belgian market or has the objective to affect the Belgian market regardless of where the conduct occurred.

Greece Small Flag Greece

Article 1 prohibitions are applicable only where the relevant agreement, decision or practice has as its object or effect the elimination, restriction or distortion of competition within the Hellenic Republic. In addition, under article 14, the HCC cooperates with the European Commission and the competition authorities of the other EU member states for the application of EU competition law, pursuant to the relevant provisions of the Competition Act and of Regulation (EC) 1/2003.

India Small Flag India

Section 3 of the Competition Act applies even where the agreement is entered into outside India, the parties to the agreement are outside India, or any matter/practice/action arising out of the agreement is outside India, if the agreement causes or is likely to cause an AAEC in India.

Sweden Small Flag Sweden

The provision against anti-competitive agreements applies to every agreement which prevents, restricts or distorts competition on the Swedish market. Thus, there is no requirement that the conduct in question has taken place in Sweden or that the parties to the infringement are incorporated in Sweden. However, the Swedish Competition Act will be enforced in compliance with public international law.

Cyprus Small Flag Cyprus

Cyprus Competition Law applies to actions which take place outside Cyprus jurisdiction when they have as their object or effect the prevention, restriction or distortion of competition in Cyprus. In the case where the Commission of the Protection of Competition (“CPC”) considers that a cartel may affect trade between Member States, it can apply the provisions of article 101 of the TFEU.

UAE Small Flag UAE

In line of international practice for Competition and Anti-trust regulations, the provisions of the Law and Regulation related to Competition in UAE shall apply to the activities carried out by entities in the UAE in addition to the exploitation of intellectual property rights inside and outside UAE. Furthermore, the provisions of the Law and Regulation related to Competition in UAE shall apply to the economic activities which are practiced outside the UAE and directly or indirectly affect the competition in the UAE.

Accordingly, we confirm that the UAE Competition Law and its Regulation shall apply to conducts that occurs outside the jurisdiction if such conducts would affect the competition in the UAE or if such conducts are related to the exploitation of the intellectual property rights. In practice however, the enforcement of UAE Competition Law against entities incorporated in foreign jurisdiction may face some practical obstacles.

Updated: May 8, 2019