Comments On The Effect Principle Of Extraterritorial Effect Of Merger Control System

The merger between Boeing Company and McDonnell Corporation demonstrates extraterritorial effect of merger control of the merger control system in a country. Extraterritorial effect of merger control comes from the deepening of the integration of the world economy and is the internal need and inhered character of the merger control.system.The"effect principle"means: whatever the participants of a merger have the nationalities of a certain country or wherever the merger occurs and completes, the merger control system of the certain country should be applied to the merger action only if the merger action will effect the market competition of the country.The"effect principle"surpasses the limitation of classic international law,enlarges the application scope of the law, meets with the internal need of the merger control system itself. However, as the"effect principle"goes too far away from the traditional international law, it has caused conflict and contradiction. As a compromise to this, the"effect principle"accepts the limitations from the basic principles of international law and strengthens the international cooperation and thus shows a trend to go back gradually to classic international law. The necessary result is that a national merger control system can claim extraterritorial effect with a certain condition.The merger control system, which China adopts, has extraterritorial effect, but China has accepted"effect principle"only to some certain extends. At present, the legislation for merger control system has not completed yet, the class level of legal resources is comparatively low and the content needs to perfect. China has not started international cooperation on this issue so as to be lack of the experience support of international practice. With the situation that many countries, which have a close tie with China in economy, trade and investment, hold extraterritorial effect in anti-monopoly law, it is necessary for China to properly adopt"effect principle"to realize the equity in the international economy, trade and investment, to fully protect the interest of domestic enterprises, to maintain the extraterritorial effect of domestic law on the merger control under some certain condtions.