A Study on Jurisdictional Issues in Anti-Unfair Competition Law in

International Trade

Yang Shi

Law school, Shanghai University of Finance and Economics, Shanghai, China

Keywords: Competition Law, Civil Law, Jurisprudence.

Abstract: With the globalization of commerce, more conflicts are arising from cross-border unfair competition practices.

This study focuses on analyzing current mechanisms from different countries and resolving the problems of

jurisdictional overlaps and the expansion of juris-dictional power in international trade. Different jurisdictions

adopt various jurisdictional theories to solve the problems. Some countries adopt the Effect Doctrine and

others take the Territoriality Principle in regulating extraterritorial unfair competitions, which may cause

conflicts. As a result, the paper aims to find methods which can be used internationally. The pathways to

improve the problems in cross-border anti-unfair competition law include the following three. First,

promoting regional regulatory alignment; second, innovating mechanisms and building global competition

law network; third, offering technical assistance to developing economies. The findings provide a framework

to determine the jurisdiction and strengthen multilateral co-operation.

1 INTRODUCTION

In the context of economic globalization, economic

and commercial relations between countries are

becoming closer. The construction of foreign-related

legal frameworks across nations also demands

sustained refinement. As the law that protects the

legal rights and interests of business operators and

consumers, the anti-unfair competition law is playing

an increasingly prominent role in international trade.

In 2020, Luckin Coffee admitted to deceiving the

consumers and relevant public through false and

misleading commercial statements. It was forced to

delist from NASDAQ under Listing Rule 5250(c)(1)

due to its financial fraud. This case contributed to the

enactment of the U.S. Holding Foreign Companies

Accountable Act (HFCAA), which mandates the U.S.

Public Company Accounting Oversight Board

(PCAOB) access to audit inspections, imposing

additional disclosure obligations on foreign

companies listed on the U.S. ex-changes. However, to

a certain degree, HFCAA has harmed the interests of

foreign companies listed in the U.S. market (Chen,

2023). After the sustained negotiations between

China and the United States, PCAOB issued a report

on December 15, 2022. In this report, PCAOB

confirmed its completion of inspections and

investigations for the 2022 assessment period on

accounting firms in mainland China and Hong Kong,

rescinding its 2021 designation (Li, 2014)

It is evident that anti-unfair competition laws

across nations are facing mounting jurisdictional

challenges amid increasingly complex commercial

practices, which involve both conflicts and

cooperation between different countries and

corporations. This necessitates international

collaboration and consultation to develop solutions

that balance interests among states, businesses, and

consumers.

Based on these, the research analyses cases and

papers from various countries to identify the key

conflicts, explores jurisdictional approaches in anti-

unfair competition laws across different jurisdictions,

and determines useful pathways. The research aims to

provide methods for establishing jurisdiction in

international trade and explore coordination

mechanisms between domestic anti-unfair

competition laws and international legal frameworks.

The research methods applied in the study include

literature analysis, case analysis and comparative

legal analysis. Firstly, by reviewing legal documents

and papers from various countries and international

organizations on anti-unfair competition laws, the

study identifies jurisdictional issues in anti-unfair

competition laws and evaluates existing solutions.

512

Shi, Y.

A Study on Jurisdictional Issues in Anti-Unfair Competition Law in International Trade.

DOI: 10.5220/0014385500004859

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Politics, Law, and Social Science (ICPLSS 2025), pages 512-517

ISBN: 978-989-758-785-6

This analysis provides a foundation for proposing

further recommendations for solutions. Secondly,

examining cases of international anti-unfair

competition enforcement to reveal current legal

practices and highlight potential problems. This

approach ensures that the research reflects actual

judicial and administrative enforcement, offering

practical solutions. Finally, comparing jurisdictional

rules on extraterritorial anti-unfair competition laws

across different jurisdictions clarifies countries’ legal

characteristics and priorities. This method illustrates

diverse approaches to resolving jurisdictional

conflicts, which offers in-sights to the establishment

of appropriate jurisdictional standards in cross-border

anti-unfair competition cases.

2 LITERATURE REVIEW

Under these economic and social circumstances,

exploring solutions to improve jurisdictional issues in

competition law, analyzing the extraterritorial

effectiveness of anti-unfair competition legislation,

and investigating how nations can collaborate and

negotiate have become indispensable topics in

building a more open and secure international

economic order.

Scholars have proposed diverse approaches to

addressing jurisdictional challenges in international

trade and competition governance. Some argue that

states should incorporate international influence

when formulating trade and competition policies,

comprehensively evaluating the possible ways the

policies may interact and the potential legal effects, in

order to minimize jurisdictional conflicts at the

legislative level (Janow, 2005). Others advocate

adopting Conspiracy Jurisdiction in judicial practice,

which means courts may assert jurisdiction over

unfair practices (e.g., commercial bribery, false

advertising) if collusion among conspirators

demonstrates a tangible link to the forum state (Price

& Jar-vis, 2024). Additionally, scholars emphasize

replacing unilateral mechanisms with multilateral

treaties (e.g., UN Conventions) to prevent the

expansion of domestic law extraterritoriality and

allow more participation from Global South

participation in shaping new juris-dictional principles

(Yoon, 2024). Notably, academic literature is urged

to serve as a Binding Agent for fragmented treaty

regimes by bridging theory with practice (Byrne,

2024).

Depending on this literature, the main arguments

of this research are as follows. First, national

competition laws should balance local conditions and

transboundary impacts. Next, States should

collaborate to clarify jurisdictional boundaries and

applicable laws. Last but not least, the international

community should provide targeted safeguards for

developing economies in trade contexts.

3 CURRENT JURISDICTIONAL

PRACTICE AND EMERGING

ISSUES IN CROSS-BORDER

ANTI-UNFAIR COMPETITION

LAW

3.1 Current Jurisdictional Practice of

Cross-Border Anti-Unfair

Competition Law

The Paris Convention for the Protection of Industrial

Property (1883), adopted by the World Intellectual

Property Organization (WIPO), obligates member

states to impose legal restraints on acts of unfair

competition. Specifically, Article 10bis of the

Convention prohibits acts of confusion (misleading

the public about commercial origins), discrediting

competitors' goodwill, and false or misleading

representations.

Furthermore, Article 10ter stipulates that-where

permitted under national law-relevant industries,

producers, or trade associations may seek judicial

remedies through domestic courts. The Agreement on

Trade-Related Aspects of Intellectual Property Rights

(TRIPS Agreement), adopted on April 15, 1994, and

entering into force on January 1, 1995, requires

World Trade Organization (WTO) members to

comply with the provisions of the Paris Convention

for the Protection of Industrial Property concerning

anti-unfair competition practices. Additionally,

Article 39 of TRIPS introduces specific protections

for trade secrets and undisclosed test data, thereby

filling in a gap in international regulations regarding

the protection of confidential business information.

Moreover, Part III of the TRIPS Agreement

stipulates that member states must ensure their

domestic laws provide effective legal remedies

against the infringements outlined in the agreement.

Building on this framework, the World Intellectual

Property Organization (WIPO) issued the Model

Provisions on Protection Against Unfair Competition

in 1996. These provisions include five categories of

unfair competition practices. Causing Confusion with

Respect to Another's Enterprise or Its Activities,

damaging Another's Goodwill or Reputation

A Study on Jurisdictional Issues in Anti-Unfair Competition Law in International Trade

513

misleading the public discrediting Another's

Enterprise or Its Activities and Unfair Competition in

Respect of Secret Information.

In April 2020, Luckin Coffee issued an

announcement admitting to financial fraud, in-

volving fabricated transactions worth $310 million,

which drew widespread attention in both China and

the United States.

Following this self-disclosure in April 2020, the

U.S. Securities and Exchange Commission (SEC)

immediately launched an investigation. The SEC

ultimately determined that Luckin had violated the

anti-fraud provisions of the Securities Exchange Act

and harmed the interests of U.S. investors. In May

2020, Luckin Coffee was forcibly delisted from U.S.

stock exchanges. By September 2021, Luckin

reached a $187.5 million settlement agreement with

U.S. investors to resolve the litigation.

Although Luckin Coffee was listed in the U.S., its

primary operations remained in China, and its

fraudulent activities harmed the interests of Chinese

investors and consumers. This case fell under the

jurisdiction of China’s Securities Law and the

Supreme People’s Court’s Judicial Interpretation on

Several Issues Concerning the Application of the

Anti-Unfair Competition Law of the People’s

Republic of China. Consequently, China’s State

Administration for Market Regulation (SAMR)

imposed a fine of 2 million RMB on Luckin for false

advertising (SAMR Penalty [2020] No. 19).

The case also prompted the enactment of the U.S.

Holding Foreign Companies Account-able Act

(HFCAA) in May 2020. This law requires foreign

companies listed in the U.S. to comply with additional

disclosure requirements. If a company fails to provide

the required audit or organizational information, its

shares will be placed on a delisting list and barred

from trading on U.S. exchanges (Chen, 2023).

However, these audit oversight requirements

directly conflict with China’s Data Security Law.

After multiple rounds of negotiations, China and the

U.S. reached an Audit Over-sight Cooperation

Agreement in August 2022. For the first time, China

permitted the Public Company Accounting Oversight

Board (PCAOB) to inspect and investigate the audit

firms of Chinese companies listed in the U.S. In

December 2022, the PCAOB announced the

completion of its first round of inspections, revoking

its prior designation of non-inspection for relevant

firms and temporarily averting the delisting crisis for

Chinese stocks (Cowan,1996).

This case highlights the overlapping jurisdictions

and regulatory conflicts in international anti-unfair

competition enforcement, as well as the challenges

posed by unilateral measures, which exacerbate

jurisdictional disputes.

3.2 Jurisdictional Issues in

International Anti-Unfair

Competition Law

3.2.1 Overlapping Jurisdiction in

Cross-Border Anti-Unfair Competition

Laws

When drafting legislation, the extraterritorial

jurisdiction of anti-unfair competition laws may

overlap across different countries due to different

theoretical foundations. Key juris-dictional

principles, such as the territorial principle and the

effects doctrine, often create conflicts in enforcement.

The effects doctrine allows a country to regulate

extraterritorial unfair competitions as long as it has a

substantial impact within its borders. This principle

has been widely adopt-ed in U.S. antitrust law, as

seen in landmark cases like United States v.

Aluminum Co. of America (Sami, 1982). In contrast,

the territorial principle asserts absolute jurisdiction

over conduct occurring in a nation’s territory, which

limits regulatory reach to domestic activities.

Additionally, conflicts arise between the

nationality principle and the conduct-based principle.

In practice, corporations may strategically structure

their operations across jurisdictions to further

complicate their enforcement. For instance, a

company might split its business processes, such as

decision-making and manufacturing, across

countries, making it difficult to determine the primary

locus of liability.

These overlapping and sometimes conflicting

jurisdictional standards create legal uncertainty,

raising challenges for international cooperation in

combating unfair competition.

3.2.2 Jurisdictional Expansion by Major

Powers in Foreign Trade

In international trade, major economies, particularly

the United States, have increasingly extended their

jurisdictional reach, which often leads to legal

conflicts and diplomatic tensions. The U.S. doctrine

of long-arm jurisdiction, traditionally requiring a

defendant to have Minimum Contacts with the forum

state and the Fundamental Fairness and Substantive

Justice, as established in International Shoe Co. v.

Washington.

However, in recent decades, this principle has been

expanded. The Sherman Act allows the U.S.

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

514

government to regulate foreign conduct that has a

Substantial and Foreseeable Effect on American

commerce. The Foreign Corrupt Practices Act

(FCPA) is used to prose-cute foreign companies for

bribery outside the U.S., often under the justification

that corrupt payments passed through U.S. financial

systems. In addition, the U.S. extends its jurisdiction

by restricting foreign companies from using

American technology or financial systems, even for

transactions outside U.S. territory. For example, in

2020, the U.S. im-posed a semiconductor ban on

Huawei, barring global chipmakers using U.S.

equipment from supplying the Chinese technology

company.

The extraterritorial expansion of jurisdiction has

triggered international pushbacks. EU’s Blocking

Statute invalidates the effect of U.S. sanctions on EU

companies. Similarly, China’s Anti-Foreign

Sanctions Law (2021) authorizes countermeasures

against foreign entities enforcing discriminatory

restrictions on Chinese firms.

3.3 Comparative Study on the Cross-

Border Effect of International

Anti-Unfair Competition Laws

3.3.1 The Extraterritorial Jurisdiction

Effect of Anti-Unfair Competition

Laws in the EU

The EU's anti-unfair competition law is not fully

harmonized. There are still differences in the

legislation of member states, but with a unified

legislative basis. The legislative basis, for example,

the Treaty on the Functioning of the European Union

stipulates the prohibition of commercial bribery and

the restriction of competition (Senftleben, 2024). The

Unfair Business Practices Directive sets out the types

of Unfair Business Practices in more detail. The

Brussels Regulations rule that, in general, the

jurisdiction should be the domicile of the defendant,

the place where the tort caused by the anti-unfair act

occurs or the place where the damage occurs. Among

these, the jurisdiction of the consumer's domicile

applies to business-to-consumer (B2C) cases, and the

rules of contract or tort jurisdiction apply to business-

to-business (B2B) disputes.

3.3.2 The Extraterritorial Jurisdiction

Effect of Anti-Unfair Competition

Laws in the U.S.

In Foreign Sovereign Immunities Act (FSIA), foreign

sovereigns are presumed to enjoy sovereign

immunity. However, the law also has nine exceptions

to it, including commercial activities conducted by

foreign states in the U.S. or outside the U.S. that cause

a direct effect on the U.S. commerce. The Lanham

Act in America defines the term Person as including

any state, state authorities and officers. Lt means that

any anti-unfair competition acts happen in the U.S. or

have an actual effect on the American commerce, can

be ruled by the Lanham Act.

3.3.3 The Extraterritorial Jurisdiction

Effect of Anti-Unfair Competition

Laws in Asia and Africa

In Competition Act (CA) in South Africa, the conduct

outside South Africa that has a substantial, direct, and

Foreseeable Effect on domestic markets (Sec. 3(2)),

aligning with international effects doctrine principles

can be governed. The Anti-Unfair Competition Law

of the People's Republic of China (2019 Amendment)

governs jurisdictional authority over unfair

competition acts through a territoriality-based

framework, which is applied to all business operators

engaging in unfair competition with-in China,

regardless of nationality.

4 APPROACHES TO

ESTABLISHING

JURISDICTION IN

EXTRATERRITORIAL

ANTI-UNFAIR COMPETITION

LAW

4.1 Regional Regulatory Alignment

To address jurisdictional conflicts, countries should

enhance legal harmonization through regional

cooperations. This includes aligning legal standards

and procedural rules. Regional blocs can adopt model

guidelines or mutual recognition agreements to

reduce compliance burdens for businesses operating

across borders. Additionally, soft-law instruments,

such as OECD or UNCTAD guidelines, can facilitate

gradual convergence toward globally accepted

norms. Combining regional coordination with

flexible international norms, this method can reduce

legal conflicts in solving cross-border unfair

competition problems (Kondo& Kochiyama, 2017).

A Study on Jurisdictional Issues in Anti-Unfair Competition Law in International Trade

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4.2 Institutional Innovation and

Technology Empowerment

A global competition enforcement network could

integrate real-time data-sharing platforms, AI-driven

market monitoring, and joint investigation protocols

to combat cross-border violations (Li et.al., 2024).

Blockchain-based authentication and digital reporting

systems may enhance transparency. Furthermore,

establishing rapid-response task forces within

existing bodies would strengthen collective action

against emerging threats like economic coercion or

predatory pricing in digital markets

(FIERBINȚEANU & NEMEȘ, 2022).

4.3 Capacity Building and

Differentiated Rule Design

Capacity-building initiatives funded by international

organizations (e.g., WIPO, World Bank) should

prioritize the following fields. Firstly, it is crucial to

take technical training. Workshops on digital

forensics, antitrust economics, and litigation

strategies for local agencies can help lay a solid

foundation for the practical use of rules. Secondly,

tailored rules are necessary. Because of the late

development of competition laws in Asia and Africa,

many of the jurisdictions adopted the principles of the

rules from the developed countries (Ravago et.al.,

2024). The principles may not fit the local

characteristic of commerce and customary law. The

countries may find their own characteristics in

international commerce and amend their laws to fit

the current situation. Last but not least, sectoral

protection is necessary to provide temporary

safeguards for vulnerable industries (e.g., agriculture,

cultural heritage) in low-income nations (Yoon,

2024). This framework balances uniformity with

flexibility, ensuring equitable participation in the

international competition governance system.

5 CONCLUSION

This study examines jurisdictional issues in

extraterritorial anti-unfair competition laws across

nations and international organizations in the context

of economic globalization, employing comparative

legal research and case analysis. It proposes that the

determination of jurisdiction in cross-border anti-

unfair competition cases should be based on the

specific circumstances of each unfair competition act,

while promoting deeper international co-operation

and establishing applicable legal standards through

multilateral agreements.

This research provides an analytical framework for

addressing extraterritorial jurisdiction issues, offering

theoretical support for establishing a fair,

harmonious, and ordered inter-national trade

competition system. It also furnishes legal

justification for enhancing inter-national cooperation

and multilateral agreements in anti-unfair

competition enforcement, contributing to a more

equitable and well-regulated global competitive

environment.

Finally, the study is limited to jurisdictional

effectiveness concerning anti-unfair competition acts

and does not address more complex areas such as

data-related disputes. Future research could explore

the jurisdictional implications of competition law in

international data governance, thereby strengthening

the connection between anti-unfair competition law

and emerging digital domains.

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