HOME > Publication & Articles 2011

International Competition Law – A Concept With Different Dimensions [ Volume 1 – 2011 ]

6 December 2011

1. Introduction

The concept of international competition law has gained common usage in the academic world and more in specific in the English literature on competition law. With the publication of books like International Competition Law[1] and Emerging Principles of International Competition Law,[2] a trend has been set in the development of a new discipline within competition law. The former work describes international competition law as an agreement that should be adopted within the WTO framework. At the end of the book, a possible model of a competition law agreement for the WTO regime is given. In doing so, the book indicates that international competition law is still de lege ferenda.[3] By using “emerging principles” in the title, the latter work seems to partly confirm this point of view. International competition law is emerging, but it is not yet a fully grown discipline within competition law due to the absence of any action within the WTO.[4]

This paper will question whether international competition law does not yet exist in today’s world or whether it is just an emerging discipline. This question will indirectly affect the presumption of whether a WTO agreement is necessary in order to speak about international competition law.[5] Indeed, it is necessary to investigate what is exactly meant by the word ‘international’. If this word refers to a discussion of norms that are the sources of public international law, international competition law may well be in the realm of the WTO or any other treaty.[6] If this word, to the contrary, refers to the subject dealt with, international competition law may well be that part of domestic competition law dealing with its territorial scope.[7]

The discussion on whether international competition law actually exists and what the content could be of this discipline, resembles the early discussions on the development of international criminal law as a discipline within criminal law.[8] As the content of international criminal law has gradually developed to a reasonably defined content, the analysis of what international competition law is or could be will draw on a parallel with international criminal law.[9] More in specific, this paper will have to investigate to what extent there have been similar developments in a competition law context as there have been in a criminal law context that have led to the discipline of international criminal law. For this purpose, the paper will introduce a categorization of Georg Schwarzenberger in relation to international criminal law.[10] Note, however, that it is not the purpose of this paper to give a detailed list of examples of competition law for each of the developments in competition law.

The paper will be structured as follows. Section 2 will introduce the categorization in international criminal law as has been conceptualized by Schwarzenberger in his article The Problem of an International Criminal Law.[11] This categorization reveals six different meanings of the concept international criminal law. Based on these six meanings, Section 3 will describe whether there have been parallel developments within competition law. Hence, this section will investigate into the international scope of domestic competition law, the international cooperation for the enforcement of domestic competition law, the internationally prescribed or authorized competition laws or the existence of international substantive competition law. In Section 4 will then theoretically frame the concept of international competition law as it exists today. As a conclusion, this paper will state international competition law exists. However, the existing international competition law has two rather than one dimension.

2. International Criminal Law and Its Six Meanings

International criminal law has gradually been recognized as a separate discipline within criminal law. At the formative stage of this discipline, it was far from clear what was meant by international criminal law. Schwarzenberger identified not less than six senses in which the term has been used.[12] International criminal law has been used to refer to a State’s domestic law laying down the spatial scope of its criminal law.[13] The term has also been used to indicate the instances in which a State is bound by international law to visit the sanctions of its domestic criminal law upon certain acts.[14] Slightly different with the previous understanding, international criminal law can be the internationally authorized domestic criminal law.[15] Substantive domestic criminal law has also been considered as international criminal law in so far as the offences are common to all civilized nations.[16] Bilateral and multilateral treaties relating to cooperation in criminal matters is another aspect of international criminal law.[17] Finally, international criminal law could be understood in a material sense, i.e. a body of international law proscribing the acts that strike the roots of international society.[18]

The categorization of Schwarzenberger is very detailed. Each different aspect has been presented as another understanding of the term international criminal law. A much broader categorization is possible by looking at the source of international criminal law. Schwarzenberger’s categorization reveals that there are mainly two different sources of international criminal law, domestic criminal law and public international law. International criminal law stemming from domestic law focuses on the international aspects of criminal law. If the sources of international criminal law public international law instruments are, the term emphasizes the criminal aspects of international law. The former encompasses the State’s laws laying down the spatial scope of its criminal law and the competence of its courts.[19] The latter involves internationally prescribed and internationally authorized criminal law. In these cases, a customary or treaty based rule obliges or empowers a state to enact a crime in its domestic criminal law, to punish offenders or to cooperate with other States in criminal matters.[20]

For the further analysis of the concept of international competition law, this paper will rely on the detailed categorization of international criminal law rather than on the one based on the sources of it. The detailed categorization allows drawing more precise conclusions as to the state of development of the concept of international competition law.

3. Six Meanings of International Competition Law?

3.1. The Territorial Scope of Domestic Competition Law

Kingman Brewster, researching on the relationship between national jurisdictional rules and public international law, formulated his view that “since there is no binding external authority to which the United States has submitted these questions, any limitation, in the last analysis, is self-imposed. In that sense, the decision to restrict jurisdiction is a matter of national policy, not sovereign power.”[21] The answer given by Brewster seems to be inspired by the fact that “international legal tribunals have not set a positive limitation upon the power of a state to regulate conduct abroad.”[22] This suggestion thus seems to be that this area of national jurisdiction is unregulated by public international law, or in other words that the States are free to exercise their powers and regulate in this area without any limitations of public international law.

This analysis leans very closely to the judgment of Permanent Court of International Justice (PCIJ) in the Lotus case (1927).[23] In this case, the PCIJ decided that neither a permissive rule nor a prohibitive rule exists within legislative jurisdiction. Public international law leaves the States with a wide measure of discretion, only limited by prohibitive rules in certain cases.[24] In other words, there is no general principle limiting the exercise of legislative jurisdiction by a State. The very existence of this discretion, the PCIJ argues, is the reason why a great variety on rules has been adopted without objections or complaints of other States. Moreover, the PCIJ noticed that States prepared conventions to minimize the effect of the discretion, which, according to Erik Nerep, implies that if there were prohibitions on jurisdiction such efforts would have no sense.[25]

Whether public international law really lets the field of legislative jurisdiction unregulated, has been the subject of vigorous debate among scholars.[26] Much of the debate started with the judgment of Judge Learned Hand in United States v. Aluminum Company of America Ltd, introducing the famous, or should we rather say the infamous, “effects doctrine.”[27] With this doctrine, Hand broke with the long established jurisdictional rule that jurisdiction was depended on the place where an action took place. Instead, he introduced effects as the basis for jurisdiction.

Judge Learned Hand perceived it for settled law[28] that “any state may impose liabilities, even upon persons not within its allegiance, for conduct outside its borders that has consequences within its borders which the state reprehends.”[29] In the next paragraph, Judge Leaned Hand further explained his view on unintentional consequences. As to these unintentional consequences, agreements that unintentionally produce mere repercussions or agreements that do not produce intended effects on the United States market, fall outside the scope of agreements for which a State may impose liabilities.[30] All these elements describe the effects doctrine formulated by Judge Learned Hand.

As states reacted against the use of the effects doctrine as a jurisdictional rule, other jurisdictional rules were developed in order to claim jurisdiction over anticompetitive behavior located the borders of the state but having effects within. Two alternatives have been developed, the theory of the economic unity of the enterprise,[31] also referred to as the attributive theory,[32] and the implementation theory.[33] Even though these theories are less controversial as they keep territorial links, they enable a state to take jurisdiction over nearly all anticompetitive behavior that not really occurs within their territory.

The theory of economic unity of the enterprise starts from the presumption that a parent company and its subsidiaries form one economic unity. This presumption allows imputing conduct of the subsidiary to the parent company.[34] Parent companies making the decision to engage in anticompetitive behavior with effects within the territory of a state in which they are not located could not be punished for the decision based on the territoriality principle. However, the courts and antitrust enforcement agencies decided that not to base the jurisdiction on the intellectual decision leading to the anticompetitive effects. Instead, they looked at the conduct of the subsidiaries. This conduct, being the implementation of the intellectual decision of the parent company, was the basis for jurisdiction. Via the unity of the enterprise, this conduct could be imputed to the parent company.[35]

Since the theory of the economic unity of the enterprise did not allow taking jurisdiction in the absence of a subsidiary, the competition authorities looked for another construction to overcome this problem. The EU Commission, more in specific, was confronted with this problem in the Wood Pulp case.[36] To establish jurisdiction, the Commission relied on the effects doctrine, but the European Court of Justice (ECJ) overturned it. The ECJ, instead, decided to make a distinction between the formation of a contract and the implementation thereof.[37] Basing jurisdiction on the place where the contract is formed, the ECJ concluded, would enable any company to evade the prohibitions of the competition law.[38] Therefore, the basis for jurisdiction should be the place where the contract is implemented. Competition authorities of other countries, among which Japan,[39] adopted this analysis.[40]

3.2. International Cooperation in Administering Domestic Competition Law Enforcement

Due to unclear borders put by public international law on legislative jurisdiction, the scope of application of domestic competition law expanded gradually. This did not only cause issues of extraterritorial application of competition law, but also of enforcement jurisdiction and concurrent jurisdiction. As it is not within the scope of the paper to discuss the former, the focus will be on enforcement jurisdiction and concurrent jurisdiction. The issue with enforcement jurisdiction is governed by the territoriality principle, hampering investigations and enforcement.[41] The issue with concurrent jurisdiction is the potentiality of being confronted with different legal frameworks, out of which political tensions can grow.[42]

In response to the growing problems related to the international application of domestic competition law, States recognized that it would be mutually advantageous to cooperate in fields of conflicts of competition law.[43] It would not only eliminate various jurisdictional issues, but also problems associated with the gathering of information. Focusing only on the binding bilateral instruments, three different types of agreements have been concluded. One type of agreements seeks to avoid and manage jurisdictional disputes between national competition enforcement authorities.[44] Another type of agreements relates to co-operation of competition law enforcement.[45] Still another type of agreements deals with technical co-operation.[46]

The early agreements aiming at avoidance and management of jurisdictional disputes mainly require from its contracting parties that they notify and consult each other whenever they engage in an investigation or adopt a competition policy that may affect the other’s laws, policies or national interests.[47] During these consultations, the parties agree to give due regard to each other’s sovereignty and to considerations of comity. Concretely, this kind of agreements aims at prevention of conflicts by talking through potential conflict issues, and so calling for restraint and moderation on the part of the competition law enforcement authorities.[48] This kind of comity is also known as traditional comity.[49]

The notions of sovereignty and comity did not immediately eradicate all the issues arising from concurrent and extraterritorial jurisdiction. These notions mitigated potential conflicts, but did not provide much assistance in cases without any conflict. Hence, a new generation of agreements started to pay attention to cooperation and coordination in cross-border enforcement efforts.[50] More specifically, these agreements deal with the assistance of locating and securing evidence and witnesses. Furthermore, this generation of agreements incorporates also the notion of positive comity,[51] meaning that each party can ask the other to enforce its competition laws against local conduct that adversely affects the other’s interest.[52] The notion of positive comity is part of most of the recent bilateral cooperation agreements, even though the words are not expressis verbis used.[53]

Geo-political changes and a gradually progressing liberalization caused a shift in many states in their stance towards competition law and policy. These changes brought about a proliferation of competition law throughout the world. In order to implement an effective competition law, many bilateral cooperation agreements incorporated the commitment to provide technical assistance related to the implementation of competition law and policy.[54] The technical assistance can take various forms, such as training sessions, lectures or the exchange of personnel.[55]

It is obvious that the raison d’être for these bilateral cooperation treaties, at least for the first two categories, is the territorial limitation of national sovereignty in cases of enforcement of the law. Without these international cooperation agreements between states, it would be relatively easy to defy the domestic competition laws of most states with relative impunity. Thus, the very purpose of this type of treaties is to strengthen and lengthen, on the basis of reciprocity, the arms of national justice. Hence, just as it is in the case of international criminal law, these treaties are not concerned with the substance of domestic competition law, but with the administrative question of foiling attempts to evade the due course of domestic competition law.[56]

3.3. Competition Law Common to All States

Different states can regulate certain behavior because of they share an identical view towards such a behavior. The general noxious character of the behavior is perceived by these states as enough ground to regulate and punish it.[57] Whereas it is probably not so difficult to find examples in field of criminal law, it will be much harder in the field of competition law. This has not only to do with the history of its proliferation, but also with the conceptualization of this field of law in each country.

The idea of adopting competition law grew almost parallel in the United States and in Europe, more in specific in Austria.[58] However, due to political events, further development of competition law ideas in Austria where blocked and it was not until the end of the Second World War that the basis for a competition law in Europe at the national and supra-national level.[59] Japan was forced to adopt a competition law around the same time.[60] It took another fifty years before the idea of adopting competition law really spread throughout the world. At present, nearly states have a competition law in place.[61] The historical absence of competition law in many states alone casts doubt on whether there is competition law common to all states.

The proliferation of competition law did not mean the adoption of uniform competition law throughout the world. The only issue on which most states agree within the field of competition laws is the regulation of the most egregious hard core cartels.[62] Other issues within competition law are marked with differences. To name a few, the United States approach towards the categorization of horizontal and vertical agreements infringing competition law is different than the European Union.[63] While the United States has a judicially developed per se rule and rule of reason, the European Union has a codified equivalent that substantially allows for different outcomes.[64]

The goals behind competition law have also implications on how infringements are judged. The economic efficiency goals determine much of the United States competition policy and so the interpretation of the competition law. Territorial division of the market will in this context be approached from an economic efficiency perspective. In other words, this agreement to divide the market is not necessarily an infringement.[65] In the European Union, on the contrary, the situation is different due to the important goal to realize an internal market. Any agreement that hampers this goal, will be regarded as illegal and agreements to territorially divide the market have the nature to hamper this goal. Therefore, these are treated as infringements of the European competition law.[66]

Further, the economic efficiency goal is represented by different economic schools of thought. These different economic schools are not necessarily consistent with each other.[67] Predatory pricing in a Harvard School context will be easily regarded as an infringement of competition law,[68] while in a Chicago School context the result will most likely be the opposite.[69] Game theory has come up with views due to which a predatory pricing strategy has most likely to be scrutinized closely in order to determine whether it is an infringement or not.[70] Hence, it locates itself in between the Harvard and Chicago School. The European Union has opted for the former,[71] while the United States for the latter.[72]

The many differences already existing between the United States and the European Union exponentially grow when all competition laws currently in place would be compared. This divergence of approaches to competition law issues only fortifies the conclusion drawn a little earlier. Competition law common to all states is as good as non-existent. This already reveals that states do not share the same principles in relation to competition law and policy and that these states do not consider it opportune to assimilate to a common standard. Whether this is the case, further study of activities at the international level have to be investigated.

3.4. Internationally Prescribed Domestic Competition Law
3.4.1. Soft Law Approaches

Public international law, either by treaty or by custom, can oblige a state to apply its domestic law to certain forms of behavior.[73] Given the absence of a competition law common to all states, revealing the willingness of states to adhere to sovereignty over their competition law, it is most likely that internationally prescribed competition law does not exist either. An obligation to apply its domestic competition law to certain forms of anti-competitive behavior, would most likely have the effect of creating a competition law common to all states. However, this does not necessarily mean that no initiatives have been taken to achieve this goal.

Indeed, several international initiatives have been undertaken to formulate a common language for some competition law issues. However, the instruments that came out of these initiatives have never superseded the stage of soft law. States are thus not obliged to implement any of the prescriptions made in these instruments. The prescriptions are mere recommendations or guidelines. There exists, among others, the OECD Recommendation Concerning Effective Action Against Hard-Core Cartels[74]and the UNCTAD Set of Multilaterally Agreed Principles and Rules for the Control of Restrictive Business Practices.[75] Both instruments, even though in different wordings, encourage states to adopt legislation aiming at effectively eliminating hard-core cartels or restrictive business practices respectively. Definitions of prohibited business behavior are provided in the respective instruments.[76]

3.4.2. Prescriptions within the WTO System

International competition law literature often investigates to what extent the WTO system regulates competition and more in specific on private anticompetitive behavior that impedes market access.[77] Due to the nature of the WTO as a public international law instrument, this is not self-evident. The subjects of the WTO system are states and the actions of their governments, not private companies and their business behavior. The consequence hereof is that the WTO can have only an indirect impact on anticompetitive behavior of private companies. Via an obligation for states, the WTO can have an influence on private anticompetitive behavior.[78]

Several types of WTO rules are relevant for competition. First, some WTO rules require states to address private anticompetitive behavior. These include both weak and general obligations and hard and sector-specific obligations.[79] Article IX of GATS exemplifies the former. This article requires states to enter into consultations in order to eliminate business practices of service suppliers that may restrain competition.[80] In relation to the latter, it is worth to refer to the telecommunications sector. The additional commitments to the Fourth Protocol to the GATS, the so-called Reference Paper,[81] stipulate that a state has to take appropriate measures to prevent major suppliers from engaging in or continuing anti-competitive behavior.[82]

Second, several WTO rules affect how states may regulate anticompetitive behavior.[83] The basic WTO non-discrimination principles of national treatment, most-favored-nation treatment, and transparency prevent states to make uncontrolled use of their competition laws.[84] Article III:4 of the GATT[85] and Article XVII of the GATS,[86] for example, may be used to argue that the application of a competition law is a violation of these respective WTO agreements because of giving benefits to domestic companies while denying them to foreign companies. The TRIPS agreement also imposes the requirement of national treatment on its member states in Article 3. Hence, the measures that member states can take within the framework of TRIPS, such as in relation to anti-competitive practices under licensing agreements.[87] The Antidumping Agreement, in combination with GATT, forces a competition law to expand its rules on price discrimination and predatory pricing to all forms of price discrimination and predatory pricing to allow them to incorporate various forms of sanctions.[88]

Third, WTO rules also control the governments’ encouragement of anticompetitive conduct.[89] Again, this kind of WTO rules does not aim at the practices of private companies. Not private conduct, but government conduct short of legal compulsion is envisaged by this kind of WTO rules. Via GATT Article XI:1, a control mechanism is set up to control a state’s involvement in import and export control and boycotts.[90] GATS seems to limit, via article XVI, the possibility of a state to limit the number of service suppliers in the market.[91]

3.5. Internationally Authorized Competition Law

Slightly different than in the previous case, public international law may not oblige states to act in a certain way, but rather empower them to act regarding certain anticompetitive behavior. In other words, this understanding of international competition law looks for rules that recognize the right of states to take action against certain anticompetitive behavior.[92] Parallel with our findings above, examples of this kind of rules may be found in the WTO agreements. Indeed, the TRIPS agreement authorizes states to take measures against anticompetitive behavior.

Article 8 TRIPS recognizes that national measures may be needed to prevent “the resort to practices that unreasonably restrain trade or adversely affect international technology transfer.”[93] Other articles further specify this Article 8 TRIPS. One of the most important articles for the purposes of this paper, is Article 40 TRIPS. This article allows states to prevent and regulate licensing practices and conditions that restrain competition. Examples of these licensing practices and conditions are exclusive grantback conditions, coercive package licensing or contract terms that prevent challenges to the validity of a patent.[94]

Even though the origin of this competition law provisions is international, the actual provisions are domestic law. The domestic law can differ from state to state, since TRIPS does not specify the content of the measures to be taken. On the contrary, TRIPS leaves a lot of discretion to the states. The discretion given to the states does not only relate to adopting measures or not, but also to the content. Hence, it is unlikely that uniform rules develop out of this practice of internationally authorizing domestic competition law.

3.4. International Competition Law in a Substantive Sense

These trans-border anticompetitive effects have been close to be regulated in the past by an agreement when in March 1948 the International Trade Organization (ITO) Charter was adopted in Havana.[95] The ITO Charter, also known as the Havana Charter,[96] contained provisions on restrictive business practices (Articles 46-56). In these ten articles, the Havana Charter did not only ask its Member States to take appropriate measures to prevent restraints of competition, limit market access or foster monopolistic control, but also set up a mechanism to deal with disputes between Member States in relation to these issues.[97]

When the US President finally decided in 1950 not to submit the Havana Charter to the Congress, the ITO died. Together with the ITO also the idea of establishing an international competition law did not disappear completely.[98] After the failed attempts to make the Havana Charter’s competition policy principles part of GATT, the ball was passed to the United Nations to try to draft a convention on restrictive business practices.[99] The first draft was completed in 1953 and presented to UN Economic and Social Council. With an international competition law agency and an internationally limited scope of substantive provisions, a step was set in the direction of a substantive international competition law. Out of a fear that smaller states would be passing judgments on US business practices, the United States withdrew its support.[100]

A private initiative working out a substantive competition law followed in the early 1990s.[101] A group of academics, the International Antitrust Code Working Group, also known as the Munich Group, published on 10 July 1993 the Draft International Antitrust Code (DAIC).[102] The DAIC was intended to be a model for a plurilateral agreement in the WTO. Besides guidelines for national legislation, the DAIC contained principles and minimum standards for the application of as well as a dispute settlement mechanism. The project was criticized for being too ambitious, as it included substantive law provisions.[103]

The discussions for an international competition agreement went on at the governmental level until the moment the agenda for the Doha Round had to be determined.[104] The general view that an international agreement under the WTO would be preferable was barely translated into the Doha Development Agenda.[105] WTO would only aim at instigating its member states to adopt provisions prohibiting hard-core cartels and to strive to reach an agreement on the core principles of domestic competition law, such as transparency, anti-discrimination, and due process. Further, the WTO also aimed at facilitating co-operation between competition authorities worldwide.[106]

Historical precedents have shown that a substantive international competition law is hard to attain. Therefore, the Doha Development Agenda tried to achieve a less ambitious agenda in relation to competition law. However, the further development of the Doha Development Agenda in Ministerial Conferences has shown that it is even difficult to reach an agreement on a minimalist approach.[107] Therefore, it is probably safe to conclude that a substantive international competition law on a world level may not be for the near future. This does not mean that on a regional level, like in the EU, such substantive internationalization attempts may be more successful.

4. The Case of International Competition Law Today

4.1. National Jurisdictional Rules as International Competition Law

States have engaged in applying their domestic competition law to competition law cases with a foreign element. Due to the foreign element involved, it could be said that a problem of Conflict of Laws presents itself. Conflict of Laws has evolved as a body of law to deal with legal problems resulting from situations containing foreign elements. At this stage, we need to incorporate a note of caution. Conflict of Laws has been developed as a system that incorporates any legal problem holding a foreign element. The continental equivalent of this Anglo-Saxon legal concept, private international law, deviates slightly. Private international law is said to cover only civil legal problems holding a foreign element. A subsection for public legal problems holding a foreign element is not included in private international law. Both legal systems have thus a different approach towards the present problem. Since competition law has a public law character, this distinction has to be made.

In the civil law systems, public law is not part of private international law. The reason for not conceiving public laws as a component of private international law is to be found in the maxim that courts of one nation do not apply the penal laws of another.[108] A national court determines only whether the lex fori is applicable or not. In other words, the courts determine whether they have subject matter jurisdiction. Since private international law does not include this as a subsection, new terminology has been developed for the purpose of covering this area of law. Under the influence of mainly civil law scholars, this field of competition law has been named ‘international competition law” or “international antitrust law.”[109]

Lawyers from civil law countries have created the concept of international competition law in the sense just described. The civil law origin may explain why this understanding of international competition law has not really rooted in common law countries. However, even in civil law countries, the use of international competition law is still peripheral. Rather than using the term international competition law, lawyers from civil law countries prefer to terminology of extraterritorial application of competition law or international dimensions of competition law.[110] Furthermore, French literature has made a distinct terminology for referring to this problem. Rather than calling this area international competition law (le droit international de la concurrence), they call this area the law of international competition (le droit de la concurrence internationale).[111]

Nevertheless, there is much to say for the use of international competition law. The jurisdictional rules determine the territorial scope of competition law. They specify the circumstances in which antitrust provisions that exist under domestic competition law will be applied to anticompetitive behavior involving a foreign element. Both the competition law aspect and the international element are represented by these jurisdictional rules. Therefore, pursuant to other fields of law, like criminal law or tax law, there is much to say for calling these jurisdictional rules international competition law.

4.2. Network Model as International Competition Law

By concluding the bilateral cooperation agreements, a new institutionalized model started to govern competition law. This new model has been termed the network model.[112] Instead of different states’ antitrust enforcement authorities that exist next to and separate from each other, the antitrust enforcement authorities find themselves in cooperative relationship with each other.[113] The bilateral cooperation agreements externalize this relationship.[114] However, one should not be blind for the cooperation between the antitrust enforcement authorities that are not included in the bilateral cooperation agreements. Since other antitrust enforcement authorities then the one mentioned in the agreements have no formal way of cooperating with each other, cooperation and coordination exists among the several intrastate competition enforcement authorities as well.[115] Some of the networks are managed through formal protocols, others are based on less formal contacts.[116] The result is that there is a domestic enforcement network transgressing borders, due to which the international competition law gets a “decentralized and less hierarchical outline than that political boundaries would otherwise indicate.”[117]

International competition law as a network model has no substantive content. Nevertheless, the network model can be termed international competition law for various reasons. First, the network model is a part of competition law. It enables competition law enforcement authorities to enforce their domestic competition law effectively to trans-border competition cases. Second, the network model is international. Indeed, the network model deals with competition law cases that have an international character. What is more, the network model is mainly based on international law instruments.

4.3. Principles and Guidelines as International Competition Law

The application of domestic competition law to trans-border competition law cases does not happen in an international legal vacuum. Indeed, the WTO agreements provide several restraints or guidelines on how domestic competition law should function in an international context.[118] The WTO agreements provide with the non-discrimination principles of national treatment, most-favored-nation treatment, and transparency a start of a check and balances on the international application of domestic competition law. Further, some WTO provisions guide states in the conceptualization of parts of their domestic competition law.

The principles and guidelines developed in the international trade framework affect domestic competition law, so establishing a link with this field of the law. The effect of the former constitutes restraints on states’ discretion in applying its domestic competition law, and is thus not substantive competition law. The link to competition law of the latter is established by allowing states to legislate in relation to certain anticompetitive behavior. This permission does in no way constitute substantive competition law. The substantive competition law has to be created by the respective WTO member states.

These principles and guidelines do not simply belong to domestic competition law. The source of these principles and guidelines is the WTO and its different agreements. Hence, a public international law instrument is the basis of these principles and guidelines. Further, these principles and guidelines specify states’ conduct in relation to competition law issues that are not limited to one state. In other words, a foreign element is always present in the competition law cases to which these principles and guidelines apply.

5. Conclusion

International competition law does exist today. This paper has found three different dimensions of international competition law. First, jurisdictional rules determining to which trans-border cases the domestic competition law will apply. Second, for an effective domestic enforcement, the enforcement authorities need to rely on networks with domestic enforcement authorities of other states, established in bilateral cooperation agreements. Third, to avoid excesses for the international business community, non-discrimination principles govern the use of domestic competition laws in trans-border cases.

Even though all these dimensions deal with a certain international aspect of competition law, none of them lays down rules of substantive competition law. They, complementary to each other, deal with the territorial scope of application of domestic competition law, the way this extraterritorial application of domestic competition law can be facilitated or the way to avoid discriminatory excesses by the extraterritorial application of domestic competition law. The link with competition prevents that international competition law becomes a misnomer.

Domestic competition law is in all three dimensions of international competition law important. Again, the prevalence of domestic does not mean that international competition law is a misnomer for this reason. The international aspect is present in each dimension, either in the form of trans-border anti-competitive conduct or in the form of an international legislative instrument.

Further, out of the three dimensions of international competition law, only one relates to the WTO. This paper has classified this form of international competition law as principles and guidelines. Any other form of WTO related international competition law does still not exist and is still merely a suggestion de lege ferenda.