Multinational Joint Ventures

A. General Overview of Antitrust Analysis by Foreign Jurisdictions
In an increasingly integrated global economy, multinational joint
ventures are becoming more common. Further, as more jurisdictions
develop robust antitrust enforcement efforts, more care is necessary to
consider how different jurisdictions will assess a multinational joint
venture. The ultimate success of a multinational joint venture may
depend on whether counsel can identify antitrust issues in relevant
jurisdictions and address them effectively and efficiently so as to
withstand antitrust challenges.
As discussed in more detail in Chapter VI, antitrust enforcement
agencies typically evaluate joint ventures through the rubric of either
(1) merger control or (2) agreements in restraint of trade. While
similarities may exist, jurisdictional differences, however subtle, should
be taken into consideration when structuring a joint venture. This chapter
discusses some key considerations that parties to multinational joint
ventures should take into consideration at the time of formation and on
an ongoing basis and provides insight into the general framework and
treatment of joint ventures in select jurisdictions.
1. Analysis Under Merger-Reporting Requirements and Merger-
Control Regimes
Depending on the scope and structure of a multinational joint
venture, it may be scrutinized by some antitrust agencies as a joint
venture while others will assess it under their respective merger control
regimes. For example, China’s National Markets Supervision
Management Bureau requires that any multinational joint venture—
including those established for a limited purpose and duration with a
competitively neutral effect (actual current and future potential)—be
subject to China’s merger control regime and reviewed accordingly.1 In
1. The Chinese Anti-Monopoly Law was not clear in this regard, but the
2019 Guiding Opinions on the Notification of the Concentration of
Undertakings indicated that all joint ventures meeting size thresholds
Joint Ventures
Canada, by contrast, a multinational joint venture would likely be
reviewed under the Competition Bureau’s Competition Collaboration
Guidelines2 and only subject to challenge if the joint venture would
likely substantially reduce or eliminate competition in any relevant
The nature of the joint venture may also be relevant to how antitrust
authorities review it, as many jurisdictions treat some joint ventures
under merger control rules, but not others. For example, the European
Commission provides guidance as to how it evaluates full-function joint
ventures.4 Full-function joint ventures are subject to a two-part test under
the EC Merger Regulations (ECMR),5 the second part of which is only
applicable to full-function joint ventures.6 This is in contrast to the
Chinese approach where the National Markets Supervision Management
Bureau does not distinguish between full-function joint ventures that are
must comply with the merger control regime, regardless of whether it is a
full-function joint venture or not. See Part B.4. of this chapter for an
overview of China’s antitrust treatment of joint venture conduct.
Collaboration-Guidelines-e-2009-12-22.pdf. See Part B.3. of this chapter
for an overview of Canada’s antitrust treatment of joint venture conduct.
3. Id. at 19.
4. A full-function joint venture is understood to be a joint venture which is
going to perform on a lasting basis all the functions of an autonomous
economic entity. See Council Regulation (EC) No. 139/2004, art. 101,
2004 O.J. (L 24) 1 art. 3. The management of a full-function joint venture
must be dedicated to its daily operations and access to resources
sufficient to conduct its business. Further, the joint venture must not only
be for a specific function of the business of the parties to the joint
venture, but must have a sufficient presence on the market (for example,
by generating a substantial share of total turnover). Finally, the joint
venture must last for more than a short, finite duration. See Part B.5. of
this chapter for an overview of the EU’s antitrust treatment of joint
venture conduct.
5. Council Regulation (EC) No. 139/2004, art.101, 2004 O.J. (L24) 1.
6. The EU Court of Justice has confirmed that non-full function joint
ventures do not require merger control. Case C-248/16, Austria Asphalt
GmbH & Co. OG v. Bundeskartellanwalt, 2017 O.J. (C 374) 7. However,
some EU member states—including Germany and the United Kingdom—
treat joint ventures differently and require compliance with their merger
control procedures for transactions meeting relevant filing thresholds.
Multinational Joint Ventures
independent of their parent companies and operate on a standalone basis
and non-full-function joint ventures. As an illustration of this difference,
consider the proposed P3 shipping alliance among three large ocean
container shipping lines—a relatively loose joint venture that would have
pooled space on ocean container ships among the three lines. Although
the U.S. and EU did not consider the P3 alliance a merger and approved
it, China’s Ministry of Commerce, which held antitrust responsibilities
prior to the establishment of the National Markets Supervision
Management Bureau in 2018, blocked the proposed transaction, after
analyzing it under its merger control rules.7
Where a multinational joint venture is scrutinized as a merger, the
participants should consider that the various analytical factors, such as
market definition and premerger notification thresholds, may vary in the
relevant jurisdictions. Similarly, the competitive landscape (e.g., number
of competitors, market shares, number of suppliers) may also differ
within the relevant jurisdictions. Accordingly, it often will be prudent to
conduct a multi-jurisdictional antitrust analysis to identify potential
antitrust risks and avoid a situation where a joint venture is allowed in
one country and challenged or blocked in another. It may also be
advisable to prioritize the submission of notifications in jurisdictions that
take longer to review filings generally or that may be expected to more
closely review the joint venture at issue.
2. Analysis as Competitor Collaborations
In some instances, joint ventures may be reviewed as a collaboration
between competitors, especially where the venture is not fully integrated
and/or is for a limited duration. As a general rule, most jurisdictions will
object to joint ventures that appreciably restrict or substantially reduce or
eliminate competition in that jurisdiction. There are differences between
jurisdictions, however, including exceptions to the general rule. For
example, in the European Union, Article 101 of the Treaty on the
Functioning of the European Union (TFEU)8 prohibits any “hard core”
restriction of competition (e.g., price fixing, limitation of output or sales,
7. See e.g., Michael N. Sohn, A Look at China’s Decistion to Block P3
Shipping Alliance, Law360 (June 24, 2014), available at
8. Consolidated Version of the Treaty on the Functioning of the European
Union, art 101, Sept. 5, 2008, 2008 O.J. (C 115) 47 (effective Dec. 1,
2009) [hereinafter TFEU].

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