Friday, August 31, 2012

The Extraterritorial Effect of Antimonopoly Law

Posted by D. Daniel Sokol

Kai Zhang (Southwest University of Political Science and Law, China) describes The Extraterritorial Effect of Antimonopoly Law.

ABSTRACT: Monopoly refers to the phenomenon whereby a specific person or enterprise accrues substantial profits by controlling the production and selling of a particular commodity. International monopolies occur when an enterprise gains control of a commodity's production and sales on a global scale. When capital becomes centralized and monopolies are formed in domestic markets, there is a strong likelihood that the monopoly will spread internationally. As a result, there will be global centralization of capital and international monopolization in which individual enterprises dominate more of the market and earn more profits.

To avoid the development of international monopolies, many countries have recognized the extraterritorial effect in antimonopoly case laws in order to protect and improve the comprehensive competitiveness of their native enterprises. Some examples of these antimonopoly laws include the U.S. Sherman Act, the 85th and 86th article of the European Treaty of Rome, and the 98th article of the German Law of Forbidden Competition. Countries design legislation to protect their own interests. The extraterritorial effect of antimonopoly laws thus has a significant history in many countries.

This article examines the extraterritorial effect of antimonopoly laws in the United States and European countries, discusses relative theories, and suggests ways of resolving conflicts between country-specific laws through an analysis of specific examples.

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