An Exploration of the Evolution of the EU’s Twin-Track Approach to the Achievement of Its International Competition Policy Goals

Abstract

The EU has two main goals in relation to regulating competition matters with an extraterritorial dimension: the first is to secure access to overseas markets for EU firms by removing beyond-the-border competition distortions in these markets and the second is to ensure that competition in the Single European Market is not distorted by the restrictive practices, such as international cartels, of non-EU companies. In order to achieve these goals, the EU has adopted both cooperative and non-cooperative approaches: the former is predominant at both a multilateral and bilateral level and has been used in pursuit of both goals whereas the non-cooperative approach is used unilaterally, primarily, but not only, to achieve the second goal. This paper analyses the efforts made by the EU to deal with these extraterritorial issues, concluding that, although the EU has an avowed preference for multilateral over bilateral action in relation to the cooperative approach, the difficulty of reaching agreement multilaterally, or indeed persuading sufficient countries that such matters are an important subject for negotiation, is such that the bilateral approach has become the EU’s focus in recent years. Even here, though, progress has been relatively slow. Moreover, matters have become unnecessarily complicated in relation to the EU’s efforts to secure extra-territorial jurisdiction enabling it to take unilateral action against non-EU companies in the non-cooperative approach. This complexity has arisen from the range of jurisdictional tests—the effect doctrine, the single economic entity test and the implementation criterion—which suggests overkill.