松下政経塾 The Matsushita Institute of
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1999年6月

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The Extraterritorial Application of the National Competition Law
小林献一/卒塾生

 
 前回の月例報告では、WTOでの競争政策にかんする議論を中心にして採り上げましたが、今回も国際社会での競争政策の調整の必要性に焦点をあてました。現在研修中の法律事務所で、「コピーをとって」と頼まれた論文の中に、興味深いものがいくつかありましたので、それを題材に月例報告をまとめました。

 今回のテーマは、冒頭にも掲げましたとおり、域外適用です。域外適用とは、自国外で起こった事柄に対して自国の裁判所で自国の法律を適用することです。本報告では、まずNippon Paper事件とBoeing事件という、競争法の分野で域外適用が問題となった事例を簡単に紹介しました。続いて、アメリカとEUの域外適用を行う際の理論を紹介し、最後に6月30日にこちらで参加したカンファレンスの感想をまとめとして載せました。

The Extraterritorial Application of the National Competition Law

1) Introduction

In 1997, a United States Court of Appeals in Boston gave a shocking judgement. It decided that US antitrust law applies to a price-fixing conspiracy that occurs outside the United States but is intended to and does have adverse effects in the United States.

2) United States v. Nippon Paper Indus

In this case, Nippon Paper Industries Co., Ltd (“Nippon Paper”), a Japanese company, was investigated by the Antitrust Division of the U.S.Department of Justice (“the Antitrust Division”). The Antitrust Division charged that Nippon Paper took place some meetings with co-conspirators in Japan to discuss increasing prices of jumbo roll thermal fax paper to be sold in U.S. In this case, one of the most important issues was whether the U.S. authority has a jurisdiction, in the criminal context, which occurred in a foreign country but “had a substantial adverse effect on commerce in the United States”. (109 F.3d at 4) Nippon Paper argued in the District Court that the alleged conduct, if it occurred at all, “took place entirely in Japan, and, thus, the indictment failed to limn an offence under Section One of the Sherman Act”. In addition, the Government of Japan as amicus supported Nippon Paper in the Court of Appeals. It found, however, that their arguments “hollow” and judged that if Section One applies in the civil context (cf. Hartford Insurance Co. v. California, 509 U.S. 764 (1993), and also see below) “to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States”, then the section must also apply in thecriminal context. (United States v. Nippon Paper Indus., 944 F. Supp. 55)

3) Boeing’s acquisition of McDonnell Douglas

Extraterritorial Application problems have happened not only between Japan and US, but also between US and EU. One of these happened when Boeing acquired McDonnell Douglas in 1996. Although the U.S. Federal Trade Commission (“FTC”) concluded that there were no antitrust problems and also neither Boeing nor McDonnell Douglas had any facilities in the EU, the European Commission announced that it had serious doubts about the acquisition.
If these problems have happened among developed countries, how much more do between developed countries and developing countries.

4) Principles.

Under international law, there are four major principles to justify extraterritorial jurisdictions, namely universality principle, protective principle, nationality principle and territorial principle. In related to extraterritorial applications of competition laws, territorial principle has been universally recognised to rely on. In its most general form, it provides that “the state where the conduct constituting the offence took place may exercise jurisdiction”(A.R.Fiebig, at 326).
In 1970’s, US courts refrained from its jurisdiction where such an exercise would offend principles of international comity (Timberlane Lumber Co. v. Bank of America, N.T. & S.A., 549 F.2d 597) and it seemed to suit with internationally recognised ways. But in 1990’s they have changed their attitudes. In Hartford Insurance Co. v. California, it became clear that “effect principle” was adopted to investigate the extraterritorial jurisdiction. Under this principle, if a concerned conduct was meant to produce and did in fact produce some substantial effect in US, the Sherman Act applies to it no matter whether it conducted inside US or outside.
On the other hand, the objective territorial principle was adopted in EU.
In 1988, also the European Court of Justice (ECJ), under this principle, established the jurisdiction of a state for conduct outside its border but effectuated within its borders.(Ahlstroem v. Commission, 1988 ECR 5193) In Japan, it was hitherto said that under the Japanese Antimonopoly act Japanese authorities had a jurisdiction only if an important part of a concerned act was conducted inside Japan. However in 1990, the report of “Study Group on Public Relations’ Problems of the Antimonopoly Act”said that Japanese authorities has jurisdictions under the Antimonopoly act even though a company was outside Japan and obstructed a competitionin Japan.

5) Bilateral Cooperation

It is clear that under these principles international comity does not occur and it will results exchanges of extraterritorial enforcement of competition laws. In order to prevent it, developed countries’ authorities try to unify the competition rules and to iron out the different levels of enforcement.
One of these efforts is a bilateral agreement between developed countries.
For example, US and EU made an agreement on bilateral cooperation in 1991 which provided for: “the reciprocal notification; the exchange of non-confidential information; the possibility of co-ordination by the two authorities of their enforcement activities, and of rendering assistance to each other; the possibility for one authority to request the other to take enforcement action (‘positive comity’), and to take into account the important interests of the other party (‘traditional comity’)”(XXVIIIth Competition Report, Foreword). They also agreed in 1998 on a new comity.
There are agreements like this between US and Canada, between EU and Canada, and between New Zealand and Australia. Although Fair Trade Commission of Japan(JFTC) and US’s FTC started making an agreement in this field from this May, there is as yet no formal bilateral framework between Japan and EU.

6) Multilateral Cooperation

As mentioned in my last report, the World Trade Organisation (“WTO”) has just begun to discuss about the relationship between Trade and Competition. On XXVIIIth Competition Report (1998), European Commission showed their stance to the next round and said that at the next WTO’s round it will focus on:

? Firstly; the members could agree to each adopt domestic competition rules, and to the establishment of appropriate enforcement bodies.
? Secondly; the members could at the same time agree on a common set of core principles for addressing anticompetitive practices with an international dimension.
? Thirdly; the elements of an instrument for multilateral co-operation could also be developed This would be designed to facilitate cooperation between enforcement, and could include provision for consultation, avoidance of conflicts, exchanges of non-confidential information, reciprocal notification and comity.
? Finally; it would also seem logical to provide for a mechanism to enable the settlement of disputes in clearly specified circumstances. (XXVIIIth Report on Competition Policy (1998), Foreword) It seems that Japan’s stance is close to EU’s (although there are some differences between Ministry of Foreign Affairs and Ministry of International Trade and Industry). It is because multilateral negotiation seems to be effective to prevent unilateralism. On the contrary, Mr. Randolph W. Tritell, Assistant Director ? International Antitrust of FTC, said that US is negative to build a multilateral cooperation in this field. It is enough, he said, for US that just only bilateral agreements exist between countries (at Sixteenth Competition Policy Conference organised by the EU Committee of the American Chamber of Commerce in Belgium, 30/06/99).

7) Concluding Remarks

Nippon Paper case shows that enforcement of the competition law in the international fields become unavoidable and its number probably increase. It is clear that Japan have to enter into agreements with other countries. However it needs to be checked and recognised again what is the Japanese national interest not only in short term but also in long term, and what kind of way of negotiations suits best to it before makingagreements. Although it seems, as Mr. Takahashi mentioned in his report,to become common to believe in market for market sake in these days, it is probably very risky just rely on a theory also in this field. On 30 June 1999, the American Chamber of Europe held a conference about the White Paper from the European Commission in Brussels. There were lots of interesting debates among Commission officers, an economist, a company’s director, lawyers and national officers. It is very important also for making a policy of the WTO’s negotiations to hold meetings like this between authorities and private sectors.


Bibliography;
European Commission: XXVIIIth Report on Competition Policy, 1998
Richard M. Reynolds etc., The Extraterritorial Application of the U.S.
Antitrust Laws to Criminal
Conspiracies, 3 E.C.L.R. 151,1998
Andre R. Fiebig, International Law Limits on the Extraterritorial Application of the European Merger
Control regulation and Suggestions for Reform, 6 E.C.L.R. 323, 1998
D.G.Goyder, EC Competition Law, Oxford EC Law Library, 1998
M. Murakami, Antimonopoly Act, Kobundo, 1996

1999年6月 執筆
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