Paris

How should full-function joint ventures be assessed after the Austria Asphalt ruling: A comparative approach

Law & Economics workshop organised by Concurrences Review in partnership with Mayer Brown.

Nathalie Jalabert-Doury

The objective of this conference is to share on the interpretation to be given to the Austria Asphalt judgment of 7 September 2017. This judgment returned to the distinction between "notifiable" and "non-notifiable" joint ventures and shifted the pre-established lines, bringing more clarity on this issue, while reducing the scope of "notifiable" joint ventures at the European level. The impact of the solution adopted by the Court concerns the European Union and France, which apply a unitary definition of concentration. Discussions will focus on three topics in succession: (i) the legal context prior to the Austria Asphalt judgment, (ii) the solution provided by the judgment, and (iii) the state of the law for joint venture schemes other than the one submitted to the Court’s assessment.

THE PREVIOUS LEGAL FRAMEWORK AT EUROPEAN AND FRENCH LEVEL

Jose-Maria Carpi Badia

The question referred for a preliminary ruling in the Austria Asphalt judgment was the first to concern the Merger Regulation. As regards the European legal framework for acquisitions of joint control and operations involving joint ventures, the Regulation contains three key provisions. Firstly, recital 20 states in general terms that the transactions covered by the Regulation are those which have the potential to affect the structure of the market, of which transactions involving joint ventures may form part. Article 3(1)(b) establishes that the acquisition of joint control (i.e. control by several undertakings) over an undertaking or part thereof constitutes a concentration within the meaning of the Regulation. Article 3(4) also qualifies the creation of ’full function’ joint ventures as a concentration within the meaning of Article 3(1)(b). However, the Regulation does not specify the relationship between these two rules. In turn, the Commission’s Jurisdictional Notice contains several clarifications. Point 24 gives a definition of "undertaking" which must be a set of assets "having a presence on the market and to which a turnover can be attributed". Paragraph 92, which concerns full-function joint ventures within the meaning of Article 3(4) of the Regulation, states that it may be either a wholly new joint venture or a contribution of assets by one or more of the parent companies. Finally, paragraph 91 states that the joint acquisition of an undertaking from a third party may constitute a concentration without it being necessary to consider the full-function criterion.

Photos © Léo-Paul Ridet

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Speakers