Mehr Unsicherheit durch Rechtsklarheit? – Zur Anwendung des Vollfunktionskriteriums in der europäischen Fusionskontrolle

Abstract

More uncertainty through legal clarity? – The application of the full-function criterion in European merger control

On 7 September 2017, the European Court of Justice (ECJ) decided as part of a request for a preliminary ruling by the Austrian Supreme Court of Justice that the creation of a joint venture (JV) is only subject to merger control if it performs on a lasting basis all the functions of an autonomous economic entity, i. e. is a full-function undertaking (Case C-248/16 – Austria Asphalt). According to the ECJ, this full-function criterion needs to be met regardless of whether the JV is newly created or an existing operational company becomes a JV by undergoing a change from sole to joint control. Until this ruling the decision practice of the European Commission was inconsistent in this regard: the full-function criterion was reviewed in some decisions concerning the change from sole to joint control in an existing undertaking, but other decisions did not explicitly address this issue. The judgment of the ECJ in “Austria Asphalt” therefore provides clarity on this point.

Following a summary of the ECJ decision, this article first assesses the court’s reasoning and then analyzes the scope of the decision. With regard to the latter, it has to be noted that the decision goes beyond the initial request of the Austrian Supreme Court of Justice as well as the decision proposed by Advocate General Kokott. On the other hand, the ECJ did not explicitly discuss the relevance of the full-function criterion in JV transactions that do not entail a change from sole to joint control, but rather consist of change in the identity and/or number of jointly controlling shareholders of an existing JV. The authors thus discuss the potential effects of the ruling on these types of JV transactions. In the following, the article analyzes which changes to the European Commission’s Consolidated Jurisdictional Notice would be required as a consequence of the ECJ ruling.

Since merger control rules of many EU member states emulate the provisions of the European Merger Control Regulation, the ECJ judgment may also affect the scope of national merger control if and to the extent national competition authorities and courts adopt the ECJ’s viewpoint for the interpretation of their national law. From a practical perspective however, this result might appear more advantageous than it will be in practice. If a JV transaction does not qualify as a concentration due to the lack of full-functionality, the transaction and, respectively, the JV’s operation may still be reviewed for compliance with the prohibition on restrictive agreements pursuant to Art. 101 TFEU and/or its counterpart in national law. Such a review may be initiated even years after the transaction has been put into effect and is usually not subject to statutory review deadlines. Thus, in order to avoid the uncertainty from a potential ex post antitrust review, the parties to a JV transaction may in the long run be better served with an ex ante merger control review by structuring the JV as a full-function entity.