Joint Venture as a Special Case of Combination

Abstract

This paper aims to define, portray and compare those essential elements of Joint Venture, a special case of Combination, which are decisive for the determination of appreciable adverse effect on competition. The study identifies the applicable legal regime at the time of Joint Venture formation, i.e. whether the joint venture formation is assessed under Combination merger laws as a structural problem or under cartel laws as a behavioral problem.The study discusses the various legal frameworks available that identifies the best solution for treating Joint Venture by classifying it into ICJ & UCJ, also by taking into consideration the structural definition to construct and decipher the Joint Venture as a special case of Combination. This study takes into the basic elements for analyzing the structural parameter of Joint Venture that are in existence of joint control, Community dimension and a “full-function” joint venture. The IJV must meet the full functional criteria like: they must operate on a lasting basis, must serve more than only a single function for their parents, must be independent or autonomous economic entities, i.e. having sufficient resources, management in charge of day-to-day operations and to certain extent have commercial relations with third parties. This paper concludes by suggesting changes like that in US antitrust law & EU Law that gives two separate concepts which determine the application of merger analysis: the concept of “fully integrated” and “merger-like” joint venture in Indian perspective. Also the joint venture formation has to be notified as a merger if the transaction or at least one parent exceeds a certain threshold.