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Extraterritoriality, Institutions, and Convergence in International Competition Policy William E. Kovacic1 Introduction Competition law is an increasingly common element of public economic policy.
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One of the key features of antitrust regulatory regimes is the concept of “extraterritoriality.” This concept defines the extent to which the conduct of a company's commercial activities may become regulated across national and international boundaries. It is one of the key features of the WTO's Anti-monopoly Agreement, and a key feature of antitrust legislation such as the Sherman Antitrust Act and the Federal Trade Commission's Competition Policy Act. It has emerged as a core tenet of “regional” cooperation between many of the world's economic countries (the WTO's “trade facilitation” mechanism is based on the idea that, at least in principle, any country should be willing to enter into a regional trade agreement in which regional actors could make joint use of the rules of economic action that are shared with them). Regulated activity in one domestic jurisdiction is not automatically subject to the regulatory jurisdiction of another (or even another country) with which it has economic or contractual ties or which, by common law or international treaty, has jurisdiction over its own activities in domestic proceedings. Such jurisdictional barriers, often expressed in the legal language of the “general principles” in antitrust statutes, have evolved into an important feature of antitrust law. This article provides an overview of the principles of intralaterritoriality that are the most significant of antitrust jurisprudence. This article first shows that the concept of “extraterritoriality” is fundamental to the regulation of competition in both domestic and international law. It presents evidence that intralaterritoriality arises from a fundamental belief in the independence of states from the effects of competition and of the special responsibilities that they have to deal with competition, and that it has been taken up in all the world's principal antitrust agreements. In addition to showing the importance of intralaterritoriality to antitrust theory, the article examines the extent to which the United States has tried to enforce antitrust laws regarding intralaterritorial competition in domestic and international commercial matters. It finds that in recent decades the United States has relied primarily on the general principles of antitrust law in enforcing certain important intralaterritorial practices in commercial antitrust cases. Finally, the article discusses the reasons why antitrust authorities appear to have not developed or have abandoned intralaterritorialism as a critical policy consideration. Introduction Competitive economics has played an important role in public economics over the course of the last two hundred years.

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