The substantive appraisal of joint ventures under the EU merger control regime / Kadir Bas.
2015
KJE2446 .B37 2015 (Map It)
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Details
Author
Title
The substantive appraisal of joint ventures under the EU merger control regime / Kadir Bas.
Published
Alphen aan den Rijn, The Netherlands : Kluwer Law International, [2015]
Distributed
Frederick, MD : Aspen Publishers, Inc., [2015]
Copyright
©2015
Call Number
KJE2446 .B37 2015
ISBN
9789041158161 (hbk. : alk. paper)
9041158162 (hbk. : alk. paper)
9041158162 (hbk. : alk. paper)
Description
xxii, 226 pages ; 25 cm.
System Control No.
(OCoLC)897205218
Bibliography, etc. Note
Includes bibliographical references (pages 189-201) and index.
Record Appears in
Table of Contents
About the Author
vii
Foreword
xv
Preface
xvii
Acknowledgements
xix
List of Abbreviations
xxi
ch. 1
Introduction
1
I.
Problem Review: Tackling the Complicated Economic Nature of Joint Ventures under Competition Law
1
II.
Scope and Objectives of the Book
4
A.
Centre of Gravity of the Book
4
B.
Ancillary Issues
5
1.
Substantive Appraisal of Partial Function Joint Ventures
5
2.
Procedural Issues as to the Treatment of Joint Ventures in the EU
6
3.
Analysis of Joint Ventures under US Competition Law
6
4.
Treatment of the Conduct and Operation of Joint Ventures
7
III.
Methodology
7
IV.
Outline of Chapters
9
ch. 2
Notion, Types and Economic Aspects of Joint Ventures
11
I.
Introduction
11
II.
The Concept of Joint Venture
12
III.
Types of Joint Ventures
14
A.
Full-Function Joint Ventures vis-a-vis Partial Function Joint Ventures
14
B.
Economic Classification of Joint Ventures
15
1.
Horizontal Joint Ventures vis-a-vis Non-horizontal Joint Ventures
15
2.
Classification of Joint Ventures by Function
16
a.
R&D Joint Ventures
17
b.
Production Joint Ventures
18
c.
Sales Joint Ventures
18
d.
Purchasing Joint Ventures
19
IV.
Economic Role of Joint Ventures
19
A.
Joint Ventures in Specific Industries
20
1.
High-Technology Industries
20
2.
Network Industries
21
3.
Air Transport Industry
24
4.
Mining Industries
27
B.
International Joint Ventures and Globalisation
29
C.
Motives behind Joint Ventures
31
1.
Providing Transactional Efficiencies
32
2.
Accessing Complementary Assets and Skills
33
3.
Reducing Risks
34
4.
Achieving Economies of Scale
35
5.
Entering into New Markets
35
6.
Acquiring Market Power
36
D.
Drawbacks of Joint Ventures as a Business Model
36
1.
Divergence in Objectives
37
2.
Trust Problems
37
3.
Ineffective Management Structure
38
V.
Concluding Remarks
39
ch. 3
The Treatment of Full-Function Joint Ventures under the EU Merger Regulation
41
I.
Introduction
41
II.
Previous Criteria to Classify Joint Ventures for Merger Control Purposes
42
A.
Joint Ventures as a Partial Merger Prior to Regulation 4064/89
42
B.
Distinction between Concentrative and Cooperative Joint Ventures under the Original Version of Regulation 4064/89
45
III.
Definition of Full-Function Joint Ventures
47
A.
Joint Control
48
B.
Concept of Full-Functionality
50
1.
Independence
50
a.
Self-Sufficiency
50
b.
Commercial Autonomy
51
2.
Permanence
55
3.
Other Considerations regarding the Full-Functionality Criterion
56
IV.
Overview of Procedural Issues
57
V.
Substantive Appraisal of the Creation of a Full-Function Joint Venture
58
A.
Analysis of Full-Function Joint Ventures under Article 2(3) of the Merger Regulation
58
1.
Legal Test
58
2.
Definition of Relevant Market(s)
62
3.
Market Shares and Concentration Levels
63
4.
Competitive Effects
67
a.
Horizontal Effects
67
b.
Non-horizontal Effects
72
B.
Analysis of the Risk of Coordination between the Parents under Article 101 TFEU
75
1.
Candidate Markets for Coordination
76
2.
Article 101(1) TFEU Analysis
78
a.
Likelihood of Coordination
78
b.
Appreciable Restriction of Competition
81
c.
Causal Link
82
3.
Analysis under Article 101(3) TFEU
83
C.
Overlap between Article 2(3) and 2(4) of the Merger Regulation
84
VI.
Assessment of the Conduct and Operation of Full-Function Joint Ventures under Article 101 TFEU
85
VII.
Concluding Remarks
89
ch. 4
The Substantive Appraisal of Partial Function Joint Ventures under Article 101 TFEU
91
I.
Introduction
91
II.
Overview of the Enforcement under Regulation 1/2003
92
III.
Commission Guidelines on the Appraisal of Joint Ventures under Article 101 TFEU
94
IV.
General Principles for the Assessment of the Formation of Partial Function Joint Ventures
96
A.
Assessment under Article 101(1) TFEU
97
1.
Restriction of Competition by Object or Effect
97
2.
Potential Restrictive Effects of Partial Function Joint Ventures
99
3.
Appreciability of the Restriction of Competition
101
B.
Exemption Analysis under Article 101(3) TFEU
103
V.
Specific Application of Article 101 TFEU to Certain Types of Joint Ventures
106
A.
R&D Joint Ventures
106
B.
Production Joint Ventures
108
C.
Purchasing Joint Ventures
110
D.
Sales Joint Ventures
112
VI.
Assessment of the Conduct and Operation of Partial Function Joint Ventures
113
VII.
Concluding Remarks
114
ch. 5
The Assessment of Joint Ventures under US Competition Law
117
I.
Introduction
117
II.
Overview of Procedural Issues in the US
118
III.
Legal Tests under Section 1 of the Sherman Act and Section 7 of the Clayton Act
120
IV.
Assessment of the Formation of Joint Ventures
122
A.
Merger Review
123
1.
Judicial Approach
123
2.
US Authorities' Approach
126
B.
Agreement-Like Treatment
129
C.
Partial Acquisitions
133
D.
Assessment of the Risk of Coordination in Markets Other than those of the Joint Venture
136
V.
Assessment of the Conduct and Operation of Joint Ventures
137
A.
Core Activities of Joint Ventures: The Dagher Decision
138
B.
Ancillary Restraints
141
VI.
Concluding Remarks
143
ch. 6
A Proposed Approach to Joint Ventures under the EU Merger Control Regime
145
I.
Introduction
145
II.
Need for a Reform of the EU Merger Control Criterion to Classify Joint Ventures
146
A.
Problems with the Full-Functionality Criterion
146
1.
Ambiguity about the Autonomy of Joint Ventures
146
2.
Limiting the Range of Operations That Should Fall within the Merger Regulation
150
3.
Relying on Conditions Relevant to the Substantive Analysis for Jurisdictional Purposes
152
B.
Importance of the Chosen Criterion from a Substantive Point of View
154
C.
Possible Alternatives
157
1.
Shift to an Integration-Based Criterion
157
2.
Including Partial Function Production Joint Ventures in the Scope of the Merger Regulation
161
D.
Proposed Approach
162
III.
Refining the Approach to Joint Ventures under the Merger Regulation
165
A.
Problems with the Current Policy
166
1.
Two Different Tests for the Same Economic Situation
166
2.
The Lesser the Degree of Integration the Stricter the Approach
169
B.
Proposed Approach
171
1.
Applying Article 2(3) to the Risk of Coordination between the Parents
171
2.
A More Lenient Standard for Partial Integration
173
3.
A Familiar Approach to Coordination outside the Joint Venture's Market
174
a.
Reaching the Terms of Coordination and Monitoring Deviations
175
b.
Forming a Punishment Mechanism
177
IV.
The Application of the Single Economic Unit Doctrine in Joint Venture Cases: More Certainty through More Consistency
178
A.
Problem: When Are They the Same?
178
B.
Proposed Approach
181
V.
Concluding Remarks
182
ch. 7
Conclusion
185
Bibliography
189
Table of Cases
203
Table of Legislation
213
Index
217