Building an international identity: the EU and extraterritorial competition policy

Abstract:

The 1997 Boeing-McDonnell Douglas (BMD) merger is a remarkable case of international state-market interaction whereby the European Union (EU) intervened in a merger between two foreign firms. This article offers an initial investigation into the development of the EU's international identity via the extraterritorial application of competition policy in the BMD case. Evidence from the case suggests that the EU's exercise of extraterritorial competition policy derives from reasonable objections to the merger, the practical desire to ensure market access opportunities for European firms and the need to enhance Union credibility in the eyes of Member States. Evidence further suggests that when the EU's interests are exercised against a non-Union third party, the EU has greater opportunity to build an international identity. The article also assesses Union responses to the potentially destabilizing effects of extraterritorial competition policy by establishing bilateral agreements, lobbying for a multilateral regime, and encouraging informal co-operation.