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Keeping up with competition--jurisdictional issues
14/09/2015
Competition analysis: Scott Megregian, partner, and Tatiana Siakka, associate, in the antitrust, competition and
trade regulation group at K&L Gates, consider the current trends in relation to jurisdictional issues in
competition law, and explain why it is increasingly important for competition lawyers--and their clients--to think
globally.
What areas in competition law are most likely to raise questions about jurisdiction?
Multinational mergers and international cartels are two areas in the sphere of public competition law that have traditionally
raised questions about jurisdiction and are likely to continue to do so, given that competition authorities around the world
have often shown willingness to take jurisdiction outside their territory.
Another area of competition law that will undoubtedly continue to break new ground and attract interest in terms of
jurisdictional disputes is private enforcement. Jurisdiction is the first battleground in damages claims, in particular those
arising out of multi-jurisdictional cartels.
Litigation in such cases almost invariably involves multiple parties and multiple jurisdictions, with both sides engaging in
tactical decisions regarding forum shopping--claimants seek to bring their claims in the most favourable jurisdictions-while defendants attempt to file 'torpedo' claims in slow jurisdictions, in order to stall proceedings and delay the resolution
of the real dispute.
With the implementation of the EU Damages Directive 2014/104/EU, cartel damages claims will continue to generate
some of the most interesting and novel jurisdictional issues, particularly given the absence of bespoke jurisdictional rules
for competition recovery.
How are these issues dealt with? Are there any grey areas?
In the field of merger control, competition authorities make their own assessment about whether or not they have
jurisdiction to examine a transaction, with their final decision being subject to judicial review in the event any jurisdictional
challenges arise.
In the UK, the recent case of Groupe Eurotunnel SA v Competition and Markets Authority [2015] CAT 1, [2015] All ER (D)
159 (Jan) has highlighted a particularly interesting jurisdictional issue that has previously received little attention, showing
that the question of UK merger control jurisdiction can involve complex blended issues of fact and law--both regarding
whether an 'enterprise' is being transferred and in terms of whether sufficient control is being acquired over it. The
Supreme Court is expected to shed light on these questions in what will be one of the most awaited judgments of 2016.
Jurisdictional disputes in EU competition litigation are being dealt with by the national and European courts. In the first
instance, it is up to the national court to resolve a jurisdictional dispute, unless it involves a novel legal question, in which
case the national court may--or in some instances must--refer the legal question to the Court of Justice of the European
Union (CJEU)
On this front, the CJEU has recently handed down a landmark decision in Cartel Damage Claims (CDC) Hydrogen
Peroxide SA v Akzo Nobel NV, Solvay SA/NV, Kemira Oyj, FMC Foret SA: C-352/13 [2015] All ER (D) 50 (Jun), providing
guidance on some particularly challenging issues relating to the application of jurisdictional rules to cartel damages
claims. Although the court clarified to some extent how these rules should operate in practice--essentially confirming the
approach taken by claimants in a number of cases to date--various issues still remain open and will likely form the subject
matter of future preliminary references.
In what way is competition law and the extraterritorial application of treaty regimes unique?
Although it cannot really be said that competition law is unique in this regard, it is without doubt an area of law where
extraterritoriality is of great relevance. This is because competition rules lack a global regime, like, for example, the World
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Trade Organization regime in trade law, and their application on an international level is almost entirely governed by
domestic laws.
Is there a 'Europeanisation' of international competition law? And if so, how is this received
on the international stage?
Yes--in the sense that the youngest jurisdictions, in particular regional blocs such as the Common Market for Eastern and
Southern Africa (COMESA) and the East African Community (EAC) have adopted competition regimes along the lines of
the EU model. This is probably explained by the fact that the EU is itself a regional agreement between member states
and has successfully and consistently applied competition law at a transnational level, as a tool for supervision and
integration of its internal market, for over 50 years.
What are the trends in this area? Do you have any tips for lawyers acting in this area of law?
Competition law is witnessing increasing internationalisation and expansive enforcement jurisdiction. It is therefore critical
that competition lawyers think globally and educate their clients to do the same, as the latter are likely to face more global
competition in the future.
In times of rapid technological change, global thinking implies being able to respond to changes and adapt the old rules in
new contexts. To this end, it is more important than ever to keep abreast of legal developments at both the national and
international level.
Interviewed by Jenny Rayner.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor
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