Antitrust

6 8 THE EU — EXPANDING THE EXTRATERRITORIAL APPROACH Although the basis of antitrust enforcement in the EU is Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), the TFEU does not state how these provisions apply extraterritorially, only that the conduct in question "must have an appreciable effect upon trade between member states." The European Commission (EC), supported by the Court of Justice of the European Union (CJEU), has interpreted this increasingly broadly — considering this in detail most recently in September 2017 in the Intel 17 judgment. For the EC to have jurisdiction, the focus of the EC and CJEU is on the doctrines of implementation and qualified effects. The implementation doctrine allows the EC to assert jurisdiction over non-EU companies that sell directly into the EU irrespective of the companies' physical presence in the EU. The qualified effects doctrine — which has been recognized in both a merger and an abuse of a dominant position context — permits EC jurisdiction to extend to any conduct that has an immediate, foreseeable and substantial effect on competition in the EU. The Intel case applied this doctrine in a scenario where the effect on competition in the EU was indirect, illustrating the expanding reach of the EC. The Intel case was an appeal by Intel against the €1.06 billion fine imposed on it by the EC for abuse of dominance concerning rebates offered by Intel in relation to its computer processing chips (CPUs). Intel argued that the EC did not have jurisdiction to investigate the alleged anti-competitive CPU manufacturing agreements because these agreements were concluded in China, involved only non-EU companies, and then the CPUs produced were sold outside of the EU. Although the Advocate-General in his opinion advised that the implementation test should be applied to assess jurisdiction, which would have meant there was no EU nexus to review these agreements, the CJEU disagreed and ruled that the qualified effects test — a much broader doctrine — should be applied. Therefore, because some computers containing the CPUs manufactured under the agreements were sold in the EU, this was enough to satisfy the qualified effects test and consequently for the EC to have jurisdiction to investigate. Companies therefore need to be aware that, even where there is no alleged anti- competitive conduct in the EU, this will not necessarily mean that the EC will not have jurisdiction — it is sufficient for the qualified effects doctrine for the effects to be more indirect, in this case because goods incorporating the cartelized product were sold in the EU. Moreover, the scope of what will constitute an "immediate, substantial and foreseeable effect" in this context is still unclear. Some guidance has been offered by the General Court's (GC) July 2018 judgements on appeals brought in relation to the Power Cables cartel; however, this guidance only emphasizes how broad the qualified effects doctrine is. In particular, as regards the 'foreseeability' aspect, the GC stated that it is sufficient to take into account the 'probable effect of conduct' on competition. 18 Further, the GC held that effects must be assessed as a whole, COMPLIANCE T H E Q U A L I F I E D E F F E C T S D O C T R I N E P E R M I T S E C J U R I S D I C T I O N T O E X T E N D T O A N Y C O N D U C T T H A T H A S A N I M M E D I A T E , F O R E S E E A B L E A N D S U B S T A N T I A L E F F E C T O N C O M P E T I T I O N I N T H E E U Extraterritorial Application of Major Antitrust Regimes 12

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