Territoriality in question: extraterritorial competition law and the challenges of digital trade

Competition law scholars and national competition authorities alike have drawn attention in recent times to the unique competition policy challenges posed by digital commerce. From a domestic regulatory perspective, these challenges are widely acknowledged as being novel and complex. When the same e-commerce takes place transnationally, that is, when it becomes digital trade, it gives rise to jurisdictional complexities. As digital trade is a rapidly expanding segment of international trade, and as competition issues arising from growing digital trade are increasingly of a transnational nature, the need for the extraterritorial application of competition law will merit greater attention from judicial and competition law authorities. This essay highlights how the expansion of digital trade and the concomitant evolution of globe-spanning business models is going to enhance the policy and legal significance of the transnational application of competition law. In doing so, the essay notes that the growing need for extraterritorial application of competition law will create problems of its own. Transnational competition regulation without appropriate guardrails risks creating a situation where the same entity may be confronted with conflicting requirements imposed by different national authorities in respect of the same underlying enterprise. Further, countries will experience significant asymmetries in their ability to enforce their competition law transnationally. The article concludes that international cooperation would be essential to solve such problems.