According to this doctrine, domestic competition laws are applicable to foreign firms — but also to domestic firms located outside the State’s territory, when their behaviour or transactions produce an ‘effect’ within the domestic territory. The ‘nationality’ of firms is irrele- vant for the purposes of antitrust enforcement and the effects doctrine covers all firms irrespective of their nationality. The ‘effects doctrine’ was embraced by the Court of First Instance in the Gencor judgment when stating that the application of the merger regulation to a merger between companies located outside EU territory ‘is justi- fied under public international law when it is foreseeable that a proposed concentration will have an immediate and substantial effect in the Community.’
(See: Judgment of the Court of First Instance of 25.3.1999 in Case T-102/96, Gencor Ltd v Commission [1999] ECR, p. II-0753, at paragraphs 89–92.)
Source: Glossary of terms used in EU competition policy, Antitrust and control of concentrations, European Commission, 2002