Too Much, Too Many: The Principle of International Comity in Digital Markets

Click here to read the full article online

Enforcement is key to understanding an effective application of competition law. In digital markets, as much as in any other sector, competition authorities must deal with the extraterritoriality of business conducts and mergers to enforce their decisions effectively. Public international law provides the principle of territoriality to establish a sovereign State’s exclusive jurisdiction over an individual or a particular case. Unfortunately, this principle is inadequate to capture the scope of economic conduct because anti-competitive effects usually radiate into different jurisdictions with different legal standards and enforcement priorities.

From the perspective of domestic law, the principle of international comity was first proposed in the US doctrine as a solution for jurisdictions to maximise their joint interests by dissipating existing law conflicts. Through comity, a State defers before another State’s decisions. In other words, comity is an informal channel to maintain amicable working relations with other States, which can play out as a principle of recognition or as a principle of restraint.1 In terms of competition law, this would mean that a competition authority can: i) assert its jurisdiction over another country to remedy anti-competitive conduct committed in another territory; or ii) abstain from intervening in a given case to avoid interfering in the interests of foreign jurisdictions.

On paper, comity seems quite straightforward to apply to competition law. However, following the OECD’s findings in 2022, competition authorities generally refuse to use the instrument at the international level due to a lack of experience with it.