An Economic Defense of Concurrent Antitrust Jurisdiction

Abstract

This article responds to the argument that extraterritorial application of antitrust law based on effects results in an inefficiently high level of regulation. The article first identifies three approaches to extraterritoriality - territorial, effects, and balancing. While the territorial and balancing approaches aim for exclusive jurisdiction, the effects approach permits concurrent jurisdiction by more than one country. The defense of concurrent jurisdiction then proceeds in two parts. First, the article argues that exclusive jurisdiction is just as likely to lead to inefficient underregulation as concurrent jurisdiction is to lead to inefficient overregulation. Second, the article notes that the level of regulation produced by concurrent jurisdiction can only be considered inefficient if one adopts a Kaldor-Hicks, rather than a Pareto, definition of efficiency and argues that, at least in this context, a Pareto definition is more appropriate.