Towards an Extraterritorial Application of the Chinese Anti-Monopoly Law that Avoids Trade Conflicts

Posted by Social Science Research Network

Towards an Extraterritorial Application of the Chinese Anti-Monopoly Law that Avoids Trade Conflicts by Michael G. Faure (University of Maastricht – Faculty of Law, Metro ; Erasmus University Rotterdam (EUR) – Erasmus School of Law) and Xinzhu Zhang (Chinese Academy of Social Sciences (CASS) – Research Center for Regulation and Competition)

ABSTRACT: This article deals with an important, but yet unexplored issue, being to what extent the anti-monopoly law of China of 2008 can be applied in an extraterritorial manner. The paper reviews first the extraterritorial application of anti-trust law in the United States and in EU competition law and then provides a critical policy analysis on extraterritoriality. Attention is specifically paid to the position of China since article 2 of the ALM, so we argue, explicitly provides for the possibility of extraterritoriality. The first decisions also show that China is apparently on its way towards an extraterritorial application of its anti-monopoly law in practice. We point at the many conflicts to which such an extraterritorial application of competition law has given rise in the EU and in the US (and more particularly between them) and hence we argue that it may be wise to draw lessons from those conflicts in order to prevent a similar scenario for China. We argue that for example joint actions between anti-trust authorities and mutual information exchange (for example on the basis of a bilateral agreement on the extraterritorial exercise of jurisdiction) may lead to avoiding potential conflicts that may arise from an extraterritorial application of the Chinese anti-monopoly law.