Glossary of competition terms

This Glossary was prepared by DG COMP and the OECD for non-competition specialists. Each term is enriched with references of national case laws from the e-Competitions Bulletin. (© European Union - © OECD)

Extra-territoriality

Term normally used to describe the exercise by a sovereign state of jurisdiction over foreigners in respect of acts done outside the borders of that state. One could say that - in a very broad sense - the EU applies its competition rules in an extra-territorial manner when it makes use of the effects doctrine.

© European Commission

Refers to the application of one country’s laws within the jurisdiction of another country. In the context of competition policy, the issue of extraterritoriality would arise if the business practices of firm(s) in one country had an anticompetitive effect in another country which the latter considered to be in violation of its laws. For example, an export cartel formed by companies which may be exempt from competition laws of country A may nevertheless be viewed as a price-fixing agreement to limit competition in markets of country B and in violation of the latter country’s antitrust laws. Another situation that could arise is a merger between two competing firms in one country resulting in substantial lessening of competition in the markets of another country. (This can arise if the merging companies are primarily export-oriented and account for the bulk of the market in the importing country.)

Whether or not companies can be successfully prosecuted for violations of competition laws of another country is importantly dependent, among other factors, on the nature of the sovereign relationship between the countries involved, where the alleged violation has taken place, the legal status of the business practice or action in the originating country and the existence of subsidiary operations and significant assets in the affected country against which legal actions can be brought forward.

© OECD

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