This document discusses issues related to extraterritorial remedies in competition law. It notes the tension between a competition agency's mandate to protect domestic consumers and implications for foreign sovereign interests when imposing remedies with extraterritorial effect. The document proposes several principles for use of extraterritorial remedies, including that they only be used in exceptional circumstances when substantial domestic harm cannot otherwise be remedied, jurisdictional preconditions are met, remedies are no broader than necessary, and comity considerations are taken into account.

1. BIAC Views on Extraterritorial
Remedies
OECD Competition Committee
Working Party 3
December 5, 2017

2. The Business Dilemma
Quiz: Which laws must business organizations follow?
A. Laws of jurisdiction in which they are lawfully organized and operate?
B. Laws of jurisdictions in which they are not lawfully organized and do
not operate?
• Easy (but simplistic) answer: Both
• Extraterritorial remedies = “B”
• But if the answer is always “B” and extraterritorial remedies are
applied, then most restrictive global competition law controls all
global commerce!
• Correct answer: What is best for consumer welfare? Should each
jurisdiction(s) make that determination for itself?

3. The Competition Agency Dilemma
• Agency mandate is to protect domestic consumers from harm to
competition
• Foreign conduct may violate domestic competition laws and produce
adverse effect on domestic consumers
• Where jurisdiction lies, why shouldn’t the agency be entitled to
impose remedies to alleviate consumer harm?
The Tension:
• Extraterritorial remedies necessarily implicate foreign sovereign interests
• Use of hard “conflict” principles does not address the freedom of a
foreign sovereign to decide that less restrictive rules may be more
beneficial to its consumers

4. Golden Rule of Proportionality(?)
**Competition agencies should expect
businesses to respect the laws and policy
choices of the forum jurisdiction AND
businesses should expect competition
agencies to respect the laws and policy
choices of foreign jurisdictions.**

5. Preconditions of Extraterritorial Remedies
Personal
Jurisdiction
• Must have authority over all
persons/entities subject to
remedy
Subject
Matter
Jurisdiction
• Within authority granted to
agency and enforcing courts
• Special consideration for
foreign issued IP rights*
Enforceme
nt
Jurisdiction
• Direct, Substantial and
Reasonably Foreseeable
Domestic Effect
Extraterritorial
Remedy
Requirements

6. Comity Consideration
• Consideration of whether foreign sovereign has substantial interest in
subject matter of investigation OR remedy
• “Hard Conflict” approach (i.e., inability to comply with laws of both) not
sufficient. Should also consider:
(i) The articulated interests/policies of other governments, and
(ii) Whether objectives sought to be obtained through competition law
enforcement could be achieved by foreign enforcement
• “The Agencies consider the extent to which a foreign sovereign encourages
or discourages certain courses of conduct or leaves parties free to choose
among different courses of conduct.” US DOJ International Guidelines

7. Principles for Use of Extraterritorial Remedies
1. Only in Exceptional Circumstances
• Where substantial domestic harm cannot otherwise be remedied
2. Jurisdictional Preconditions Are Met
• Jurisdiction of agency/courts over person and subject matter; direct, substantial
domestic effect
3. Remedy No Broader Than Necessary to Address Domestic Effects
• “Worldwide” remedies not justifiable: “spillover” impact will result where no
domestic effect exists
4. Must Always Consider Comity and Defer Extraterritorial Remedy If:
• Actual conflict with foreign jurisdictions OR
• Foreign law is less restrictive as to challenged conduct