On 16 February 2018, the Court of Appeal of England and Wales applied the qualified effects test (i.e. the test according to which EU competition law can be applied to conduct outside the EU which has an immediate, substantial and foreseeable effect within the EU) as a basis for grounding territorial jurisdiction in a private action for damages.

By way of background, the European Commission fined producers of liquid crystal displays (LCDs) and cathode ray tubes (CRTs) for entering into cartel agreements and infringing the competition rules in 2010 and 2012. On the basis of the Commission decisions, iiyama, a computer monitor seller, launched separate actions for damages against a number of CRT and LCD producers in the English courts.  As a preliminary issue, the defendants argued that iiyama could not base its actions for damages on Article 101 TFEU (and Article 53 EEA) since the CRT and LCD producers did not sell their products to the claimants within the EU.  Rather, in most cases, the LCD and CRT producers would first supply the products to entities outside the EU, which in turn would sell the products internally to a claimant holding company also outside the EU, which would then supply the products to claimant subsidiary companies within the EU for onward sale and distribution.  By two separate orders, the High Court reached divergent views on whether the indirect purchases from the CRT and LCD producers fell within the scope of EU competition law.  The Court of Appeal combined the actions on appeal.

By its judgement, the Court of Appeal has now decided that iiyama has an arguable case on the issue of territoriality and that each of the lawsuits should therefore go to trial to examine this issue further. The Court of Appeal considered the case law of the Court of Justice of the European Union ("ECJ") on the territorial scope of the EU competition rules, including the recent judgement in Intel.  The Court of Appeal concluded that the ECJ's recent judgement in Intel made it clear "beyond argument" that the qualified effects test "provides an alternative basis for grounding the territorial jurisdiction" and "provides substantial support for the argument that a worldwide cartel which was intended to produce substantial indirect effects on the EU internal market may satisfy the qualified effects test for jurisdiction".  The Court of Appeal added that "whether or not the [qualified effects] test is satisfied will depend on a full examination of the intended and actual operation of the cartel as a whole".

The judgement of the Court of Appeal may be subject to further appeal.

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