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July 29, 1994


By CBR Staff Writer

The European Commission is expected to adopt rules by the end of the year that will bring more joint ventures under the scope of merger regulation, hears Reuters. The change will hinge on the way the Commission distinguishes between ‘concentrative’ joint ventures, which fall under merger regulation, and ‘co-operative’ joint ventures, which fall under article 85 of the European Community Treaty. A European Commission official said the new interpretation would particularly affect telecommunication alliances. Under present rules, a joint venture must operate in a completely separate market from its parents to be considered ‘concentrative’. But the new interpretation would allow some overlap on ‘neighbouring’ markets. For example, a telecommunications operator could offer corporate communications services on its home market to multinational companies through a joint venture, while offering similar services to domestic companies on its own, said the official. The change is an effort to develop a simpler, more consistent policy in response to criticism, said the spokesman. It will be implemented through a notice on co-operative and concentrative joint ventures to be published in the organisation’s official journal. The merger regulations offer several advantages to companies, including strict timetables for Commission decisions and a ‘one-stop-shop’ precluding action by national authorities. On the other hand, Article 85 gives the Commission more flexibility, since it can consider factors other than the impact on competition, such as whether a link-up promotes technical or economic progress, said the official.

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