EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
• any undertakings other than the undertaking concerned that are also controlled by these controlling undertakings. The turnover of a target undertaking is limited to that of the target itself and its subsidiaries, but not the turnover of the target’s parent companies (the sellers) or any other subsidiaries of those parent companies. 2.8 Foreign-to-Foreign Transactions The EUMR applies to all concentrations with an EU dimension, regardless of the nationality of the parties involved. There are no special rules for foreign-to-foreign transactions, nor is there a local effects/presence test beyond the turnover thresholds. 2.9 Market Share Jurisdictional Threshold The EU notification thresholds are based solely on turnover. There are no market share-based thresholds. 2.10 Joint Ventures The EUMR applies only to “full-function” JVs. Non ”full-function” JVs are not caught by the EUMR but are subject to the EU antitrust rules, specifically Article 101 of the TFEU. They may also require notification in certain member states that take a different approach to what consti - tutes a notifiable transaction, such as in Austria, Germany and Poland. A JV is considered “full-function” if it performs, on a lasting basis, all the functions of an autono - mous economic entity. It must therefore have suf - ficient staff, assets and capital to function on the market independently of its parent companies. It must also have its own market presence, and not merely perform a single function on behalf of its parent companies (such as customer service
or R&D), nor be overly reliant on its parent com - panies as either suppliers or customers. Concentrations involving full-function JVs may arise from the creation of a new greenfield operation or through a change in control over an existing business (eg, a change from sole to joint control or the addition of a parent company to an existing full-function JV). 2.11 Power of Authorities to Investigate a Transaction The Commission has no power to investigate or review on its own initiative transactions that do not meet the EU jurisdictional thresholds. However, the Commission can acquire jurisdic - tion to review such transactions as a result of a referral request lodged by either the parties or a member state (see 2.1 Notification ). 2.12 Requirement for Clearance Before Implementation Article 7 of the EUMR imposes a standstill obli - gation, requiring parties to a concentration with an EU dimension to suspend implementation until they have received clearance. Definition of Implementation The Court of Justice clarified the meaning of “implementation” in Ernst & Young/KPMG Den- mark (2018). Actions taken in anticipation of a merger (eg, the target severing legal ties with its parent company) do not constitute implemen - tation of the transaction, even if such actions would not have occurred had it not been for the merger and they are irreversible and have an effect on the market. Rather, implementation in the sense of Article 7 of the EUMR concerns steps that contribute to a lasting change in con - trol of an undertaking.
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