14.3 Complying with Community Law 453Concentration. A concentration has been defined as follows: “A concentration
shall be deemed to arise where a change of control on a lasting basis results from:
(a) the merger of two or more previously independent undertakings or parts of un-
dertakings, or (b) the acquisition, by one or more persons already controlling at
least one undertaking, or by one or more undertakings, whether by purchase of se-
curities or assets, by contract or by any other means, of direct or indirect control of
the whole or parts of one or more other undertakings.”^34 In addition, the creation
of a joint venture performing on a lasting basis all the functions of an autonomous
economic entity constitutes a concentration.^35
A concentration thus only covers operations where a change of control in the
undertakings concerned occurs on a lasting basis. The concept of concentration is
intended to relate to operations which bring about a lasting change in the structure
of the market.^36 The existence of a concentration is to a great extent determined by
qualitative rather than quantitative criteria.^37
Control. Control is defined by the EC Merger Regulation as the possibility of
exercising decisive influence on an undertaking. It is therefore not necessary to
show that the decisive influence is or will be actually exercised. A concentration
may occur on a legal or a de facto basis, may take the form of sole or joint control,
and extend to the whole or parts of one or more undertakings.^38
For example, sole control is acquired if one undertaking alone can exercise decisive influ-
ence on an undertaking. Sole control can be acquired in two main ways. First, the solely
controlling undertaking enjoys the power to determine the strategic commercial decisions
of the other undertaking. This power is typically achieved by the acquisition of a majority
of voting rights in a company. Second, so-called negative sole control exists where only
one shareholder is able to veto strategic decisions in an undertaking, but this shareholder
does not have the power, on his own, to impose such decisions. Since this shareholder can
produce a deadlock situation, the shareholder acquires decisive influence and therefore con-
trol within the meaning of the EC Merger Regulation.^39
Joint control. As stated above, the acquisition of control may be in the form of
sole or joint control. Joint control exists where two or more undertakings or per-
sons have the possibility of exercising decisive influence over another undertak-
ing. In order for joint control to exist, those shareholders must have reached a
common understanding in determining the commercial policy of the controlled
undertaking and they must cooperate. As in the case of sole control, the acquisi-
tion of joint control can also be established on a de jure or de facto basis.^40
(^34) Article 3(1) of Regulation 139/2004 (EC Merger Regulation).
(^35) Article 3(4) of Regulation 139/2004 (EC Merger Regulation).
(^36) Recital 20 of Regulation 139/2004 (EC Merger Regulation).
(^37) Commission Consolidated Jurisdictional Notice, paragraph 7.
(^38) Article 3(2) of Regulation 139/2004 (EC Merger Regulation); Commission Consolidated
Jurisdictional Notice, paragraph 16.
(^39) Commission Consolidated Jurisdictional Notice, paragraph 54.
(^40) Commission Consolidated Jurisdictional Notice, paragraphs 62 and 63.