The extraterritorial dimension of US and EU competition law: A threat to the multilateral system?

This paper attempts to draw out the experience of the US and the European Union (EU). In the case of the US, the paper locates its extraterritorial activity as part of a general trend of US foreign policy orientation towards issues of political economy (in particular trade and investment), and away from the more traditional foreign policy concerns of security and defence policy. By contrast, the EU case attempts to analyse the emergence of a potentially powerful 'macro state' in the field of competition policy. It must be stressed, however, that the EU's extraterritorial activities are significantly less in intensity than those of the US. From a realist perspective, this may be due to the fact that unlike the US government, the EU institutions are still driven by the member states. A counter analysis would suggest that due to the fact that EU competition law has precedence over national law, the EU Commission and European Court of Justice (ECJ) act like state institutions. Thus, the EU may indeed act like a state, and an increasing resort to extraterritoriality may herald a more predatory attitude akin to, but still different from, US actions.