Joint Ownership of Undertakings Without Joint Control Minority Shareholdings at a Crossroad in Competition Law

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In the context of competition law analysis we may identify some critical issues associated with the potential relevance of anticompetitive coordination arising from shareholdings in certain undertakings which allow the exercise of influence over the behavior of those entities. To some extent, such issues and their effects on competition bear resemblance to the competition law framework of joint ventures (and a host of situations of cooperation between undertakings comparable thereto). More precisely, these cases correspond to situations of acquisition or holding by an undertaking of shareholdings in a third undertaking which, without exceeding the threshold required for the acquisition of control, whether jointly or individually, may, nevertheless, influence the competitive relationships between the concerned undertakings. This type of minority shareholdings, due to the absence of any kind of control -- as this concept has been perceived in EU competition law -- does not lead to the emergence of concentration operations, nor to the creation of joint ventures, as such. Anyhow, its potential impact on the relationship between the involved undertakings may, under certain circumstances, raise issues of distortion of competition, to some extent comparable, as aforementioned, to those associated with certain joint ventures. Furthermore, given this potential for competition law problems, the European Commission, through its DG Competition, has launched a public consultation to deal with an hypothetical ‘enforcement gap’ concerning these minority shareholdings and to find adequate normative solutions for any problems identified in this area. In the wake of the comments received, the Commission has recently presented specific proposals in its White Paper “Towards More Effective EU Merger Control” published in July 2014. The underlying rationale of these proposals concerning minority shareholdings is to widen the scope of EU merger control in order to systematically address potential harm to competition arising from the acquisition of non-controlling minority shareholdings. Conversely, the envisaged review purports to avoid undue burdens to businesses, both by targeting only transactions that are, prima facie, problematic from a competition point of view and by adopting a system for the control of such situations that would be lighter than currently foreseen under the merger regulation for full mergers. However, while this proposal is certainly anchored on understandable concerns in terms of competition law, the procedural framework it contemplates is, to a large extent, debatable, as extensively discussed in the paper.