theinternationalisationof...

THE INTERNATIONALISATION OF

ANTITRUST POLICY

The internationalisationof antitrust policy is a topic of great contemporary

significance and debate. Dr Dabbah provides an inquiry that is at once

clearly stated, original and empirical, setting out the relevant issues in

the context of law, economics and politics. He draws on the decisional

practice of antitrust authorities, actions and statements of political bodies,

as well as the decisions of law courts. Providing a detailed examination

of the experiences of the European Community and the United States,

Dr Dabbah includes a comprehensive examination of central concepts

and ideas related to antitrust law and practice. The book concludes by

looking forward to potential developments in the landscape, and suggests

a new approach to the internationalisation of antitrust policy. This will

be of interest to antitrust officials, as well as international organisations,

members of the business community, academics, researchers and policy-

makers who are involved in antitrust law and policy.

maher m. dabbah is Lecturer in Competition Law at Queen Mary,

University of London, and is a Barrister in England and Wales. He is

also Visiting Professor of Competition Law in the College ofManagement,

Academic Division, Israel. He acts as a consultant to several corporations

and international organisations and is involved in the training of lawyers,

economists, judges and government officials from many countries in the

area of antitrust law.

© Cambridge University Press www.cambridge.org

Cambridge University Press0521820790 - The Internationalisation of Antitrust PolicyMaher M. DabbahFrontmatterMore information

http://www.cambridge.org/0521820790

http://www.cambridge.org


THE

INTERNATIONALISATION OF

ANTITRUST POLICY

MAHER M. DABBAHLecturer in Competition Law at Queen Mary, University of London

and barrister of the Middle Temple.






published by the press syndicate of the university of cambridge

The Pitt Building, Trumpington Street, Cambridge, United Kingdom

cambridge university press

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477 Williamstown Road, Port Melbourne, VIC 3207, Australia

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Dock House, The Waterfront, Cape Town 8001, South Africa


C©Maher M. Dabbah 2003

This book is in copyright. Subject to statutory exception

and to the provisions of relevant collective licensing agreements,

no reproduction of any part may take place without

the written permission of Cambridge University Press.

First published 2003

Printed in the United Kingdom at the University Press, Cambridge

Typeface Adobe Minion 10.5/13.5 pt. System LATEX2ε [tb]

A catalogue record for this book is available from the British Library

ISBN 0 521 82079 0 hardback






To my parents






CONTENTS

Preface page xTable of reports xiiTable of cases xvList of abbreviations xx

1 Introduction 1General 1Similarities and differences 2The scope of the book 4The nature of the book 6The examples of internationalisation 9Some reflection on terminology 10Globalisation and its implications for antitrust policy 12The structure of the book 15

2 Refining some concepts and ideas 17The concept of competition 17Some historical perspectives of a particular idea andpolitical philosophy 28

Market definition 35Conclusion 44

3 Antitrust law: goals and political perspective 46Antitrust law: concept, framework and goals 46A political perspective of antitrust law 58Competition advocacy 63Conclusion 68

4 The use of discretion 70A framework 71

vii






viii contents

Identifying instances of discretion 72Dealing with discretion 76Some implications of the analysis 83Conclusion 85

5 EC antitrust policy 86Some introductory issues 86Institutional framework 91The relationship between EC and domestic antitrust laws 95The significance and influence of EC antitrust law beyondthe single market 112

Implications of the analysis 134Conclusion 138

6 Sovereignty 139The conceptual framework of sovereignty 140Sovereignty under public international law 144Sovereignty and the internationalisation of antitrustpolicy 149

The emerging order 154Conclusion 158

7 Extraterritoriality 159The question of jurisdiction 159Some fundamental issues 164Developments in the USA and the EC 167Responses to extraterritoriality 187Some reflections 191Dealing with extraterritoriality and its conflicts 196Conclusion 204

8 Antitrust and trade policies 206Overview 206The different restraints 209The perspectives of antitrust and trade policies 215The different approaches 216Market access principle 227Developments of some interest 234Implications of the analysis 237Conclusion 246






contents ix

9 Past, present and future: a comparative analysis 247Some important past developments 247Institutional framework 250From present to the future 257Political power and perspectives of countries, firmsand consumer interests 266

Model systems of antitrust 273The EC–US conflict 277Convergence and harmonisation 280Substantive issues 283Reflections and summary 284

10 Conclusions: the way forward 287

Bibliography 295Index 315List of websites 321






PREFACE

The publication of the book comes at a time when enormous and sig-nificant developments are taking place in the area of internationalisationof antitrust policy worldwide. Only a month ago, the first annual confer-ence of the young International CompetitionNetwork (ICN) was held. Theevents leading to the birth of the Network in general and the organisationof that conference in particular, along with the conference proceedings andoutcomes, have served as a timely reminder of the fact that the internation-alisation of antitrust policy is a topic of great contemporary significance anddebate. Outside the ICN, extremely important work in the area continuesto evolve and take shape, notably within the Organisation for EconomicCooperation and Development (OECD), the United Nations Conferenceon Trade and Development (UNCTAD) and theWorld Trade Organization(WTO). Of these important fora, the WTO has been receiving particularattention. The success of the WTO’s 4th Ministerial Conference and thepreparations already underway for the 5th Ministerial Conference, shownot only the importance and need for addressing international antitrustissues effectively but also the important role which the WTO can play inthis regard – something which should be encouraged and welcomed.A decade ago it was extremely rare for antitrust conferences and events

to include a mention of the internationalisation of antitrust policy. It isvery interesting and remarkable how things have changed in a relativelyshort period of time. Nowadays it is quite rare for such conferences andevents not to include such a mention. Indeed, this development is all themore remarkable in light of the phenomenal increase in the importanceand geographical scope of antitrust law itself during the last twenty yearsor so.In writing this book I aimed to produce a volume that would be of

help and value for officials of antitrust authorities, international organisa-tions dealing with antitrust and international trade issues, the business

x






preface xi

community, antitrust lawyers including academics and researchers,economists, political scientists and policy-makers interested in antitrustlaw and policy. Most of the ideas in the book come frommy teaching expe-rience and my work as a consultant to several companies and internationalorganisations as well as from being involved in the training of governmentofficials, economists, lawyers and judges from many countries in the areaof antitrust law.Every book has a story, and the present book is no exception. The idea

of writing on the internationalisation of antitrust policy took shape severalyears ago in the land of ‘antitrust’. Soon afterwards that idea was turnedinto a doctoral thesis, of which the present book is a revision and expansionand which I prepared at King’s College, London under the supervisionof Professor Richard Whish. As the first person to graduate with a PhDunder Richard’s supervision, I feel I have particularly benefited from hisrich experience and knowledge. It was also a great experience for me toteach with Richard the LLM EC Competition Law course at King’s College,London for a period of four years. Warm thanks are due to him for all thehelp and support he often generously offered. I am so fortunate to havesuch a great colleague and friend.In addition, I would like to expressmy appreciation to Dr Tamar Gidron,

The Markeys, Professor Steve Anderman, Professor Peter Muchlinski, Pro-fessor Eleanor Fox, Christopher Brown, David Bailey and my former re-search assistant at King’s College, London, Monica Chowdry. I also wouldlike to thank the very able and helpful staff at Cambridge University Press.In particular, I would like to express my warm gratitude to Ms FinolaO’Sullivan. My thanks also go to my brothers and sisters for their love andsupport.Finally, my greatest debt is to my wonderful and great parents, to whom

I dedicate this book.I have aimed to state the law as it stood on 1 November 2002.

Maher DabbahQueen Mary, University of London






TABLE OF REPORTS

American Bar Association (ABA)

Private Anti-Competitive Practices as Market Access Barriers (2000)The Internationalization of Competition Law Rules: Coordination andConvergence (1999)

US Department of Justice

International Competition Policy Advisory Committee Report (ICPAC)(2000)

Antitrust Guidelines for International Operations, United States Depart-ment of Justice, Antitrust Division (1995)

Antitrust Guidelines for International Operations, United States Depart-ment of Justice, Antitrust Division (1988)

European Commission

Green Paper on Merger Review (2001)The Enlargement Negotiations after Helsinki MEMO/00/6 (2000)White Paper on the Modernisation of the Rules Implementing Articles 85and 86 of the EC Treaty (1999)

European Parliament Resolution on the Commission’s 28th Report onCompetition Policy (1998) Commission Report (1999)

28th Report on Competition Policy (1998)Competition Policy in the New Trade Order: Strengthening InternationalCo-operation and Rules COM (95) 359, Report of Group of Experts

25th Report on Competition Policy (1995)White Paper on the Preparation of the Associated Countries of Central andEastern Europe for Integration into the Internal Market (1995)

23rd Report on Competition Policy (1993)

xii






table of reports xiii

15th Report on Competition Policy (1985)Cockfield White Paper on the Completion of the Internal Market (1985)13th Report on Competition Policy (1983)11th Report on Competition Policy (1981)9th Report on Competition Policy (1979)

Organisation for Economic Cooperation and Development (OECD)

Coherence between Trade and Competition Policy (2000)Consistencies and Inconsistencies between Trade and Competition Policies(1999)

Trade and Competition Policy for Tomorrow (1999)Trade and Competition: Exploring the Way Forward (1999)Positive Comity and Related Benefits (1999)Recommendation Concerning Hard-Core Cartels (1998)Antitrust and Market Access (1996)Revised Recommendations Concerning Co-operation between MemberCountries on Anticompetitive Practices Affecting International Trade(1995)

New Dimensions of Market Access in Globalizing World Economy (1995)Convergence of Competition Policies (1994)Trade and Competition Policies (1993)Recommendation for Co-operation between Member Countries in Areasof Potential Conflict between Competition and Trade Policies (1986)

Competition Policy in the OECD Countries (1986)Competition and Trade Policy: Their Interaction (1984)Restrictive Business Practices of Multinational Enterprises (1977)

International Chamber of Commerce (ICC)

Competition and Trade in the Global Arena: an International BusinessPerspective (1998)

World Bank

Linking Competition and Trade Policies in Central and East EuropeanCountries, Policy Research Working Paper 1346 (1994)






xiv table of reports

United Nations Conference on Trade and Development (UNCTAD)

Set of Multilaterally Agreed Principles and Rules for the Control ofRestrictive Business Practices (1981)

World Trade Organization (WTO)

Annual Report (1998)Annual Report (1997)Annual Report (1996)






TABLE OF CASES

EC Cases

A Ahlstrom Osukeyhtio v. Commission (Wood Pulp): C-89/85, 104/85,114/85 (1988), ECJ page 120, 160, 176, 178, 183

Aerospatiale/Alenia/De Havilland (EC Commission Decision)(1991) 90

Airtours plc v. Commission: T-342/99 (2002), CFI 82Alcatel/Newbridge Networks (EC Commission Decision)(2000) 42

Alcoa/Reynolds (1999) (EC Commission Decision) 115Alfa Romeo (EC Commission Decision) (1984) 74Aluminium Imports from Eastern Europe (EC Commission Decision)(1985) 183

Aniline Dyes Cartel (EC Commission Decision) (1969) 176AOL/Time Warner (EC Commission Decision) (2001) 42Automec srl v. Commission: T-24/90 (1992), CFI 73BASF AG v. Commission: T-79/89, 84–86/89, 91–92/89, 94/89, 96/89,98/89, 102/89, 104/89 (1992) 81

Belgische Radio en Televisie et al. v. SV SABAM and NV Fonier:C-127/73 (1974), ECJ 96

Boeing/McDonnell Douglas (EC Commission Decision)(1997) 113, 270

British Airways/British Caledonian (EC Commission Decision)(1988) 74

British Leyland (EC Commission Decision) (1984) 74British Sugar/Berisford (EC Commission Decision) (1982) 74CVC/Lenzing (2001) (EC Commission Decision) 115Compaq/HP (2001) (EC Commission Decision) 115

xv






xvi table of cases

Continental Can Co. Inc., Re (EC Commission Decision)(1972) 80

Costa v. ENEL: C-6/64 (1964), ECJ 88Demirel v. Stadt Schwabisch Gmund: C-12/86 (1987), ECJ 125Demo-Studio Schmidt v. Commission: 210/81(1983), ECJ 73, 80Establissements Consten SARL and Grundig-Verkaufs-GmbH v.Commission: C-56, 58/64) (1966), ECJ 80

European Night Services v. Commission: T-374–5, 388/94 (1998),CFI 81–82

Exxon/Mobil (EC Commission Decision) (1994) 115, 270Ford/VW (EC Commission Decision) (1993) 90Forenings Sparbanken/SEB (EC Commission Decision) (2001) 44Gencor v. Commission: T-102/96 (1999), CFI 177–79, 185General Electric/Honeywell International (EC Commission Decision)(2001): T-209/01, 210/01 judgment pending, CFI 115, 116, 179–81,

185Grosfillex-Fillistorf (EC Commission Decision) (1964) 176IBM v. Commission: C-60/81, 190/81 (1981), ECJ 183ICI Ltd. v. Commission (Cases 48/69) [1972] ECR 619 188Irish Sugar v. Commission: T-228/97 (1999), CFI 124LdPE (EC Commission Decision) (1990) 177MCIWorldcom/Sprint (EC Commission Decision) (2000) 113, 114, 198Minnesota Mining and Manufacturing/Quante (EC CommissionDecision) (2000) 42

NV Algemene Transporten Expeditie Onderneming van Gend enLoos v. Nederlandse Administratie der Belastingen: C-26/62(1963), ECJ 88, 94

PVC (EC Commission Decision) (1990) 81, 177Radio Telefis Eireann v. Commission: T-69/89 (1991), CFI 82Remia BV v. Commission: C-42/84 (1985), ECJ 80S. A. Hercules Chemicals NV v. Commission: T-7/89 (1991),CFI 82

Schibsted Multimedia AS/Telenor Nextel AS/Telia AB(EC Commission Decision) (1999) 41

Schneider Electric v. Commission: T-77/02 (2002), CFI 82Shell/Montedison (EC Commission Decision) (1994) 270Societa ltaliana Vetro v. Commission: T-68, 77, 78/89 (1992),CFI 81






table of cases xvii

Sonera Systems/ICL/Invia/Data-info/JV (EC Commission Decision)(2000) 42

Tetra Laval BV v. Commission: T-5/02 (2002), CFI 82Tetra PakRausing SA v. Commission: C-333/94 (1996), CFI 124United Brands v. Commission: 27/76 (1978) 38, 39VBVB v. Commission: 43, 63/82 (1984), ECJ 73Vodafone Airtouch/Mannesmann (EC Commission Decision)(2000) 42

Volvo/Renault (EC Commission Decision) (2000) 44Volvo/Scania (EC Commission Decision) (2001) 44Walt Wilhelm v. Bundeskartellamt: C-148/68 (1969), ECJ 95

International Court of Justice Cases

Denmark v. Germany (North Sea Continental Shelf) (1968) 160France v. Turkey (S.S. ‘Lotus’) (1927) 160

UK Cases

British Nylon Spinners Ltd. v. ICI (1953) 190Darcy v. Allein (Case of Monopolies) (1602) 32Dyer’s Case (1414) 32Rio Tinto Zinc v. Westinghouse Electric Corp. (1978) 190

US Cases

American Banana Co v. United Fruits Co. (1909) 162Asahi Metal Indus. Co. v. Superior Ct. (1987) 173Baker v. Carr 369 US (1962) 193Broadcast Music, Inc. v. CBS (1979) 274Brooke Group Ltd. v. Brown and Williamson TobaccoCorp. (1993) 273

Caribbean Broad Sys. v. Cable and Wireless Plc (1998) 175Chicago Board of Trade v. United States (1918) 273Doe v. United States (1988) 173Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.(1961) 274

Filetech SARL v. France Telecom (1997) 175






xviii table of cases

Hartford Fire Insurance Co. v. California (1993) 171, 174, 175 (171–6),185, 195

Hilton v. Guyot (1865) 168Holophane Co. v. United States (1956) 192In re Grand Jury Subpoena Duces Tecum (1947) 188In re Insurance Antitrust Litigation (1991) 171, 172In re Uranium Antitrust Litigation: WestinghouseElec. Corp. v. Rio Algom Ltd. (1980) 189, 193

Interamerican Refining Corporation v. Texaco Maracaibo, Inc.(1970) 174

Laker Airways Ltd. v. Sabena, Belgian World Airlines (1984) 168, 169,194

Mannington Mills, Inc. v. Congoleum Corp. (1979) 169, 174Metro Indus. Inc. v. Sammi Corp. (1996) 175National Society of Professional Engineers v. United States(1978) 274

Northern Pacific Railway v. United States (1958) 228NYNEX Corp. v. Discon, Inc. (1998) 53Parker v. Brown (1943) 213The Schooner Channing Betsy (1804) 192The Schooner Exch. v. M’Faddon (1812) 200Societe Nationale Industrielle Aerospatiale v. United StatesDistrict Court (1987) 173

Southern Motor Carriers Rate Conference v. US (1985) 213Spectrum Sports, Inc. v. McQuillan (1993) 273Standard Oil Co. v. United States (1911) 273Timberlane Lumber Co. v. Bank of America National Trustand Savings Association (1984) 171

Timberlane Lumber Co. v. Bank of America National Trustand Savings Association (1976) 168, 169, 174

Timken Roller Bearing Co. v. United States (1951) 192Trugman-Nash Inc. v. New Zealand Dairy Board (1997) 175Underhill v. Hernandez (1897) 199United Mine Workers v. Pennington (1965) 274United States v. Aluminum Co. of America (Alcoa) (1927) 162United States v. Cerestar Bioproducts BV (1998) 175United States v. Heeremac (1997) 175United States v. Hoffmann-La Roche (1997) 175






table of cases xix

United States v. Imperial Chem. Indus. Ltd. (1951) 190, 192United States v. Minnesota Mining and Mfg. Co. (1950) 192United States v. Nippon Paper Industries Co. (1997) 175United States v. Pilkington plc (1994) 216United States v. Sisal Sales Corporation (1927) 162United States v. Watchmaking of Switzerland InformationCentre, Inc. (1955) 150, 199

United States v. Watchmakers of Switzerland (1962) 174, 192






ABBREVIATIONS

AB Antitrust BulletinAER American Economic ReviewAJCL American Journal of Comparative LawAJCorpL Australian Journal of Corporate LawAJIL American Journal of International LawALJ Antitrust Law JournalAR Antitrust ReportAULR American University Law ReviewBJIL Brooklyn Journal of International LawBL Business LawyerBLR Brookings Law ReviewBUILJ Boston University International Law JournalBULR Boston University Law ReviewBYBIL British Yearbook of International LawCFI European Court of First InstanceCILJ Cornell International Law JournalCJTL Columbia Journal of Transnational LawCKLR Chicago-Kent Law ReviewCLP Current Legal ProblemsCLR Cardozo Law ReviewCMLR Common Market Law ReportsCMLRev Common Market Law ReviewColLR Columbia Law ReviewCorLR Cornell Law ReviewCPE Constitutional Political EconomyCUSLJ Canada–United-States Law JournalCWILJ California Western International Law JournalCWRJIL Case Western Reserve Journal of International LawDG COMP Directorate of Commission responsible for antitrust policy

xx






list of abbreviations xxi

DJILP Denver Journal of International Law and PolicyECCPNL European Community Competition Policy NewsLetterECJ European Court of JusticeECLR European Competition Law ReviewECMR European Community Merger RegulationECoun European CounselECR European Court ReportsEEA European Economic AreaEECR East European Constitutional ReviewEFTA European Free Trade AssociationEJPR European Journal of Political ResearchELR European Law ReviewFBNJ Federal Bar News and JournalFCLI Fordham Corporate Law InstituteFILJ Fordham International Law JournalFLR Fordham Law ReviewFTC Federal Trade CommissionGCR Global Competition ReviewGLJ Georgetown Law JournalGMLR George-Mason University Law ReviewHICLR Hastings International and Comparative Law ReviewHILJ Harvard International Law JournalHLJ Hastings Law JournalHLR Harvard Law ReviewIBL International Business LawyerICJ International Court of JusticeICLQ International and Comparative Law QuarterlyICN International Competition NetworkICPAC International Competition Policy Advisory CommitteeIICLR Industrial International and Comparative Law ReviewIILR International Institute Law ReviewIJEL Irish Journal of European LawIL International LawyerILR Israel Law ReviewIO International OrganizationITR International Trade RepresentativeJCMS Journal of Common Market StudiesJIS Journal of International Studies






xxii list of abbreviations

JITE Journal of Institutional and Theoretical EconomyJLE Journal of Law and EconomicsJMLR John Marshall Law ReviewJWTL Journal of World Trade LawLLR Loyola Law ReviewLPIB Law and Policy in International BusinessLQR Law Quarterly ReviewLS Legal StudiesMarLR Marquette Law ReviewMicLR Michigan Law ReviewMJGT Minnesota Journal of Global TradeMJIL Michigan Journal of International LawMLR Modern Law ReviewMNEs Multinational EnterprisesNELR New England Law ReviewNILQ Northern Ireland Legal QuarterlyNJILB Northwestern Journal of International Law and BusinessNULR Northwestern University Law ReviewNYULR New York University Law ReviewOECD Organisation for Economic Cooperation and DevelopmentOJ Official Journal of the European CommunityONULR Ohio Northern University Law ReviewOREP Oxford Review of Economic PolicyOSLJ Ohio State Law JournalPCIJ Permanent Court of International JusticePRLPJ Pacific-Rimely Law and Policy JournalQJE Quarterly Journal of EconomicsRDC Recueil des CoursRLR Rutgers Law ReviewRMCLUE Revue du Marche Commun et de l’Union EuropeeneSCLR Southern California Law ReviewSCR Supreme Court ReviewSJIL Stanford Journal of International LawSJILC Syracuse Journal of International Law and CommerceSRICL Swiss Review of International Competition LawSSNIP Small but Significant Non-transitory Increase in PriceSTLJ Suffolk Transnational Law JournalTL Transnational Lawyer






list of abbreviations xxiii

TLR Texas Law ReviewUCDLR University of California, Davis Law ReviewUCinLR University of Cincinnati Law ReviewUCLF University of Chicago Legal ForumUCLR University of Chicago Law ReviewUFLR University of Florida Law ReviewUNCTAD United Nations Conference on Trade and DevelopmentUPitLR University of Pittsburgh Law ReviewUPJIBL University of Pennsylvania Journal of International

Business LawUPJIEL University of Pennsylvania Journal of International

Economic LawUPLR University of Pennsylvania Law ReviewVanLR Vanderbilt Law ReviewVilLR Villanova Law ReviewVirLR Virginia Law ReviewVJIL Virginia Journal of International LawVJTL Vanderbilt Journal of Transnational LawWC World CompetitionWLR Wayne Law ReviewWTO World Trade OrganizationYEL Yearbook of European LawYJIL Yale Journal of International LawYLJ Yale Law Journal






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