11 Sep 2017, 2:30 pm
The Court of Justice of the EU (CJEU) interpreted the EU's Merger Regulation in reaching its conclusion.
The Merger Regulation sets out thresholds and circumstances in which 'concentrations' need to be notified to the European Commission to assess their impact on competition.
The CJEU said that it was not clear from the wording of the regulation to what extent the rules applied to cases where a business owned exclusively by one company saw a change in control to a joint venture arrangement. It looked beyond the wording of the regulation to look at the purpose and general structure of its provisions to rule on the issue.
"A concentration is deemed to arise upon a change in the form of control of an existing undertaking which, previously exclusive, becomes joint, only if the joint venture created by such a transaction performs on a lasting basis all the functions of an autonomous economic entity," the CJEU ruled.
The Court was ruling in a case referred to it from Austria where two road-building businesses have agreed to form a joint venture to control an asphalt plant. One of the businesses is already the sole owner of the plant.