An Observation of International Cooperation on Competition Restriction Cases in Accordance with Extraterritorial Application of Competition Laws

1. Background of Study
Globalization and emergence of large multinational corporations have aroused concerns about extraterritorial application of competition laws in issues involving international competition. The main controversy has derived from the conflict of interest between nations and corporations of different countries. According to the principle of territoriality in international law, the domestic law of a country does not apply in the territory of another country. Hence, conduct taking place in the territory of a sovereign state is not subject to the law of another country. However, as a result of internationalization of trade and commerce, business practices subject to the regulation of the competition law of each country are often carried out often across borders and involve the global market. As a result, consequentialism has been adopted in enforcement of competition laws in the international society. In other words, regardless of whether a business practice in question happens in or outside a country, so long as the effects are likely to have a negative impact on competition in the market of this country, this country has the right to apply its competition regulations. Under such circumstances, each country will gradually expand the range of application of its competition law and conflict derived from law application discrepancies happens between nations. To resolve such discrepancies, the need of cooperation grows. By examining the principle of jurisdiction of different countries for handling extraterritorial conduct and the modes of cooperation between nations, this paper intendeds to sort out experiences that can serve as references and also establish practical suggestions for the FTC in the future.

2. Main Suggestions
This study puts forth the following suggestions for the Fair Trade Commission in future administration:
(1) Establishing unofficial cooperation relationships to seek opportunities for official cooperation: Written agreements are not always necessary for cooperation between competition authorities of different countries. Even without signing an agreement, they can have dialog through international conferences or regional competition law organizations. As a matter of fact, cooperation between countries today has taken place without signature of written agreements. In particular, due to political sensitivity and that Chinese Taipei has no official ties with most of its major trade partners, no written agreement on cooperation on competition law enforcement has been signed with any other country. Cooperation relationships can only be established through unofficial channels. For this reason, maintaining unofficial but substantive cooperative relations with the competition authorities of other countries is a key mission for the FTC in promotion of international operations. However, this doesn’t mean written agreements are not important. In fact, they can set the basic framework of cooperation for the signees and facilitate further dialog and cooperation between agencies. The FTC ought to maintain the interaction with the competition authorities of important countries and point out the significance of cooperation in guarding the interests of both sides at the right time, such as when working on specific cases, and create the opportunity for both sides to sign a cooperation agreement.
(2) Keeping track of the policies of international organizations toward cooperation and adjusting domestic regulations accordingly: The legal system and competition regulations of each country differ and the legal responsibility and sanctioning procedure also vary. Violations involving criminal responsibility are placed under the jurisdiction of the judicial department while those touching upon administrative responsibility are subject to sanctions from administrative agencies. The intrinsic differences between criminal and administrative responsibility result in various investigation procedures, sanctioning considerations and even criteria of probative value. Hence, in order to enable countries to cooperate under dissimilar regulations, international organizations are currently working on an optimal set of guidelines and suggested measures to be reference for each country. The FTC ought to keep a close watch on the further development of this issue which might provide the reference for signature of bilateral cooperation agreements with other countries in the future. In the meantime, this study has reached the conclusion that besides legal system differences, limitations in exchange of classified information are also factors behind the barrier to international cooperation. Considering that the cooperation agreements signed between the FTC and the competition authorities of other countries lack binding force while application of domestic regulations cannot be excluded, it remains to be observed whether it is necessary to establish regulations on exchange of classified information.