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Showing papers in "European Business Organization Law Review in 2001"


Journal ArticleDOI
TL;DR: A cornerstone for the take-off of the development towards competition in European telecommunications markets was the Commission of the European Communities' British Telecom decision in 1982 and its confirmation by the European Court of Justice in 1985.
Abstract: A cornerstone for the take-off of the development towards competition in European telecommunications markets was the Commission of the European Communities' British Telecom decision in 1982 and its confirmation by the European Court of Justice in 1985. According to this decision, British Telecom should no longer be permitted to forbid the high-speed forwarding of telex messages between foreign countries by competitive agencies in Great Britain. The procedural setting of this case was most unusual because the Italian government and not British Telecom appealed against the Commission's decision. Moreover, the British government intervened, taking sides not with the Italian government, but with the Commission. The important message of the British Telecom case has been that the Commission of the European Communities is able to apply the Treaty of Rome's competition rules in the European telecommunications administration based on the public law of the different member countries.

44 citations


Journal ArticleDOI
TL;DR: In this article, the authors consider the problem of how a national constitution can adapt to a global, not national or European, governance reality, where the state is competing with foreign, international and private governing authorities or it is joining them in hybrid efforts.
Abstract: A technology often reaches perfection when its successor is already in place. Miraculously speedy and reliable punch card readers were finally available on the market when demand shifted to personal computers, to cite only one example. Do constitutions follow the same evolutionary pattern? Constitutional law, in general, and the doctrine of fundamental freedoms, in particular, are in admirable shape. Their dogmatics have been amply tested; they are elegant and rich. But they have been developed for the nation state. Yet governance reality is increasingly different. The state is competing with foreign, international and private governing authorities, or it is joining them in hybrid efforts. Will de-constitutionalization ensue? Or will the existing constitutions be able to face, or even alter, the new reality? This is a paper about governance. Hardly a term is more disputed in the social sciences. This paper looks at (potentially) global, not national or European governance. It therefore cannot avoid using the broadest of all possible definitions of governance. Since on the global scale there is no such thing as a widely undisputed higher order system, the term governance must comprise all modes of social ordering, by whatever actor or actor configuration. The focus of this paper is on divergent governance bodies, not governance tools. It does not want to explore whether the pertinent body uses (quasi-)legal rules, incentives, moral suasion or any other tool for governing the behavior of its addressees. It simply looks at who purports to change the behavior of a class of addressees, in the alleged interest of some protectees. Moreover, when it speaks of governance, the paper exclusively looks at intentional attempts to change the behavior of addressees. The limitation inherent in this becomes clear when looking at a constitutional court. To the extent that it has jurisdiction, one can interpret such a court as the supreme legal authority. At the limit, the court can even overrule the legislator. But, strictly exceptional instances notwithstanding, a constitutional court does not itself write the law. It, at most, invalidates existing rules, or gives them a different meaning. In both cases, parliament remains the governing body. Finally, this is an interdisciplinary paper in that it draws on insights from the social sciences, and from political sciences in particular. But it does so exclusively in the interest of better understanding a dogmatic problem of constitutional law: how can and how should a national constitution react when governance activities cannot (exclusively) be attributed to the governance bodies created by the constitution? More specifically even, the paper does not intend to design the appropriate reaction for a concrete instance of not exclusively public national governance. Its goal is much more modest. It wants to provide constitutional lawyers with a conceptual framework for addressing such concrete design problems. This explains why the paper does, by far, not exploit the richness of the discussion on hybrid international governance in the political sciences. The following sketch purports to address these questions from the angle of the German constitution. It starts with a taxonomy of governance authorities (II). It briefly summarizes the normative arguments for and against international, private and hybrid governance (III). It points to the option of privatizing, internationalizing and hybridizing the constitution itself (IV), but focuses on strategies for the existing national constitutions in the face of an altered reality (V). The concluding dogmatic treatment is confined to fundamental freedoms. It starts by isolating the international (VI) and the private dimension (VII), then goes on to address the more complex private international (VIII) and hybrid forms of governance (IX).

23 citations



Journal ArticleDOI
TL;DR: German corporate group law (or rather, to be more precise, the German Recht der verbundenen Unternehmen, i.e., the law of affiliated companies, §§ 15 ff., 291 ff. as mentioned in this paper ) owes its existence to special concerns of the German legislature at the end of the 1950s and the beginning of the 1960s regarding the ability to protect the interests of outsiders in group-dependent marketable share companies.
Abstract: German corporate group law (or rather, to be more precise, the German Recht der verbundenen Unternehmen, i.e., the law of affiliated companies, §§ 15 ff., 291 ff. Marketable Share Company Act [Aktiengesetz, abbreviated AktG]) owes its existence to special concerns of the German legislature at the end of the 1950s and the beginning of the 1960s regarding the ability to protect the interests of outsiders in group-dependent marketable share companies (Aktiengesellschaften). The interests of shareholders and creditors were considered to be so intensive, so inscrutable and so continuously endangered, that the legislature believed that the existing company law was incapable of satisfactorily providing the requisite protection.

13 citations



Journal ArticleDOI
TL;DR: In this article, the authors look at the private international law regimes of EU Member States with regard to companies and their relationship with the provisions of the EC Treaty (the Treaty) concerning freedom of establishment.
Abstract: The present contribution looks at the private international law regimes of EU Member States with regard to companies and their relationship with the provisions of the EC Treaty (“the Treaty”) concerning freedom of establishment. After the Centros judgment of the European Court of Justice (hereinafter usually referred to as “the Court of Justice”) and the avalanche of comments on this case, this issue is more topical than ever. But it would be wrong to say that it is new: the controversy about the meaning of Articles 43 and 48 EC [ex Articles 52 and 58 ECT] for national conflict-of-law rules regarding companies has been dragging on for at least fifteen years and, if anything, the equally illustrious Daily Mail judgment of the Court of Justice only quietened it down for a very brief period.

8 citations


Journal ArticleDOI
TL;DR: In this paper, the authors discuss the likely impact of company groups on transition economies both in the short and in the long term, and suggest that while in short-term company groups may well be transaction enabling, they could create substantial costs by impeding competition and undermining the adaptability of companies to changing economic conditions.
Abstract: Company groups are an important factor in transition economies. For some, the origins can be traced to the socialist period. Others are a product of the transition process. This paper discusses the likely impact of company groups on transition economies both in the short and in the long term. It suggests that while in the short term company groups may well be transaction enabling, in the long term they could create substantial costs by impeding competition and undermining the adaptability of companies to changing economic conditions. Regulatory intervention should balance the short-term benefits of company groups with their potential long-term costs. In the short term, the primary goal of regulatory intervention should be to prevent the development of structures that may be difficult to reverse and to ensure minimum protection of shareholder and creditor rights primarily through disclosure requirements and exit options. The regulation of intra-group relations based on complex legal doctrines that rely heavily on judicial evaluations as currently suggested for the European Union do not seem appropriate for transition economies, given the weakness of legal institutions in these countries.

8 citations


Journal ArticleDOI
TL;DR: The freedom of establishment in the internal market is also related to the right to choose between the legal forms of a dependent branch establishment and an independent subsidiary as mentioned in this paper, which serves the purpose of giving the economic operators in internal market the opportunity of a gradual integration into foreign markets.
Abstract: The freedom of establishment entails not only a general prohibition of discrimination and restrictions, but also incorporates, as regards the setting-up of secondary establishments, the right to choose between the legal forms of a dependent branch establishment and an independent subsidiary. This right to choose serves the purpose of giving the economic operators in the internal market the opportunity of a gradual integration into foreign markets.

7 citations


Journal ArticleDOI
Brigitte Haar1
TL;DR: In this article, a study by Ernst & Young shows that as of 1997 the United States outperforms all other countries in the biotech sector in terms of its number of companies and employees as well as the sales and research and development expenditures.
Abstract: Opening up markets has been one of key endeavors of Ernst-JoachimMestmacker's endeavors. But what to do if markets have yet to emerge? Biotechnology is one of the key emerging technologies and exemplifies the major problems of innovative industrial activity in Europe. Broadly defined, biotechnology includes “ …any technique that uses living organisms (or parts of organisms) to make or modify products, to improve plants or animals, or to develop microorganisms for specific uses”. In light of its approach on a genetic and molecular level biotechnology is research-intensive and driven by innovation. The Commission's Green Paper on Innovation identified the biotechnology sector as one of dynamic growth and importance for Europe. However, a study by Ernst & Young shows that as of 1997 the United States outperforms all other countries in the biotech sector in terms of its number of companies and employees as well as in terms of sales and research and development expenditures. In addition, all top ten products were developed in the US, and most of them sold by US companies. Thus, Europe lags behind the US in most indicators of economic performance in biotechnology and therefore biotechnology has been identified as an area of prime importance to the future economic development and competitiveness in Europe. For example, in Germany quite successful basic research has been conducted over the years at universities and research institutes. However, these innovative advances in research could not be translated into success on the German pharmaceutical market. What then are the ingredients of the American success in biotechnology?

7 citations


Journal ArticleDOI
Rainer Kulms1
TL;DR: In this paper, the authors examine the common intellectual origins of shareholders' agreements under German and US laws and analyze to what extent one legal system might instruct the other, showing that uncertainty about the shareholders' freedom of contract and the ground rules governing a contractual relationship between shareholders.
Abstract: “A well-drawn stockholders' agreement entered into contemporaneously with the formation of a corporation is (generally acknowledged to be) the most effective means of protecting the minority shareholder”. In authorizing such agreements courts have come to recognize the needs of shareholders in close corporations who want to protect themselves from each other and from hostile invaders. Nowadays, shareholders experience little difficulty in enforcing voting or pooling agreements. But courts feel much more uncomfortable about the implications of shareholder agreements defining the business strategy of the corporation and interfering with the core function of the directors. Both, under German and US states' laws there is uncertainty about the shareholders' freedom of contract and the ground rules governing a contractual relationship between shareholders. This contribution will examine the common intellectual origins of shareholders' agreements under German and US laws. It will demonstrate where German and US corporate laws began to move apart and it will analyze to what extent one legal system might instruct the other.

6 citations


Journal ArticleDOI
TL;DR: The European Commission's "White Paper on modernisation of the rules implementing Articles 85 and 86 of the EC Treaty" triggered a broad discussion on the future legal framework of the enforcement of competition law in the European Union as mentioned in this paper.
Abstract: When the European Commission published its “White Paper on modernisation of the rules implementing Articles 85 and 86 of the EC Treaty” in spring 1999 it triggered a broad discussion on the future legal framework of the enforcement of competition law in the European Union. The most important change, which the Commission suggested, consists in the decentralisation of the application of Article 81 section 3 EC. While anti-competitive agreements and concerted practices, which are prohibited by Article 81 section 1 can only be exempted, for the time being, by a Commission decision taken under Article 81 section 3 and Regulation 17/62 the Commission wants to give up that monopoly. According to the White Paper both national competition authorities and national courts of law will be in a position to directly apply Article 81 section 3. Among the first reactions to that proposal was that of Ernst Joachim Mestmacker to whom this paper is dedicated in longstanding respect and gratitude to celebrate his 75th Anniversary. He published an extensive, severe and outspoken critique as early as September 1999. His analysis has had a strong impact on academic discussions and public opinion in Germany, although it has not persuaded the European Commission which drafted a proposal for a regulation along the lines of the White Paper in late 2000. Again, Ernst - Joachim Mestmacker has reacted by a striking and even more elaborate critique which resumes and extends the discussion.

Journal ArticleDOI
TL;DR: The "Berle-Means" corporation as discussed by the authors was the model for the reform of German corporate law, and the separation of ownership and control offered considerable advantages, such as the ability of managers to escape the control of banks or other financial institutions, enabling the corporation to become an autonomous player in competitive markets.
Abstract: After World War II it became obvious that the American way of allowing an open and highly competitive economy was superior to the traditional German system of concentrated groups of companies, cartels, and regular government interference. For the organization of large firms it was the "Berle-Means" corporation1 which presented itself as the model for reforming German corporate law. In fact, the separation of ownership and control offered considerable advantages. Management functions were awarded on the basis of merit, abandoning the feudal rule of inheritance. Investors were able to reduce risk by diversification. The dispersion of ownership allowed managers to escape the control of banks or other financial institutions, enabling the corporation to become an autonomous player in competitive markets. Management had to serve the interests of all - and not only of big shareholders; it was held accountable by the judicial enforcement of fiduciary duties, the monitoring of independent directors and the emerging market for corporate control. Ernst Joachim Mestmacker had been the first German author to point to this model; in his path-breaking analysis he confronted the American public corporation with the corporatist German structures and suggested far-reaching changes, mostly following the American example.



Journal ArticleDOI
Eddy Wymeersch1
TL;DR: In this article, the authors defined financial groups as groups in which one or more components, legally independent companies, engage in offering financial services to the public, acting as a bank, a broker, an insurance company, an investment adviser or in any other capacity, offering their services to individuals, professional investment managers or other business firms.
Abstract: Financial groups may be defined as groups in which one or more components, legally independent companies, engage in offering financial services to the public, acting as a bank, a broker, an insurance company, an investment adviser or in any other capacity, offering their services to individuals, professional investment managers or other business firms. Firms that exclusively offer financial services to other group entities – the so-called “in-house banks” would be excluded, as these normally do not receive “deposits or other repayable funds” from the public.



Journal ArticleDOI
TL;DR: In this article, the emergence and practice of company groups as well as other legal institutions aimed at protecting creditors and minority shareholders of controlled companies in Polish law is analyzed, and the notion of "dominance" is patterned after the seventh EU Directive, unless defined otherwise.
Abstract: This paper analyzes the emergence and practice of company groups as well as other legal institutions aimed at protecting creditors and minority shareholders of controlled companies in Polish law. To avoid misunderstandings, the concept of groups of companies is defined as an association of two or more companies dominated by a single entity (dominant firm). In principle, it is assumed that such groups of companies consist of companies possessing independent legal personality. However, participation of other legal entities in the group should also be considered. In particular, the classical narrow definition of a group of companies, if adopted by a given statute for the purpose of protecting creditors or minority shareholders, makes the task of circumventing the law rather easy. Thus, it should be sufficient if a group is dominated by a partnership or a cooperative organization. For similar reasons, a requirement that a “group” shall consist of at least three companies seems to be too formalistic and imperfect. Hence, the definition of a “group” or “dominance” may be given different meanings for various purposes. In this paper the notion of “dominance” is patterned after the seventh EU Directive, unless defined otherwise.

Journal ArticleDOI
TL;DR: The Berlin Philharmonic Orchestra played the Second Piano Concerto by Johannes Brahms as mentioned in this paper, which was the first cello concert played by a solo-cellist of the Berlin orchestra.
Abstract: Imagine yourself sitting in the Berlin Philharmonic Hall, listening to a concert given by the Berlin Philharmonic Orchestra. On the stage-bill is the Second Piano Concerto by Johannes Brahms. I especially like this concerto because it comes as a nice double pack: Hidden in the third movement is a wonderful cello concert. Therefore, you can be sure that this important cello-solo will be played by Dr. Faust, the first solo-cellist of the Berlin Philharmonic, on an original Stradivari from 1798. Dr. Faust discovered this extraordinary instrument on one of the many tours of the Orchestra. His enthusiasm, however, was immediately dampened as he realized that neither he personally, nor the Orchestra, nor the Association of the Friends of the Orchestra, could afford to buy it. But then, Dr. Faust recalled a recent conversation with Hilmar Kopper, at that time CEO of Deutsche Bank AG. The Deutsche Bank, a public stock corporation, showed public spirit and financed the cello.

Journal ArticleDOI
TL;DR: Personal and proprietary security are two basic types of instruments for securing credit as discussed by the authors, and they are the two most frequent types of security instruments used for credit transactions in the banking system.
Abstract: Personal and proprietary security are the two basic types of instruments for securing credit. In the more frequent and better known case of proprietary security, usually the debtor of the credit offers an asset owned by him to serve as security for the creditor by transferring a limited proprietary right to the creditor. By contrast, in the case of personal security a third person assumes a security obligation vis-a-vis the creditor; potentially he is liable for that obligation – up to its agreed limit – with all his property.


Journal ArticleDOI
TL;DR: The evolution of Hungarian group law may be described as gradual and reactive as discussed by the authors, which can already be traced back to the time before the fall of the iron curtain in 1989-1990.
Abstract: The subject of this article is the development of group law in Hungary, which can already be traced back to the time before the fall of the iron curtain in 1989-1990. In particular, the Law on Commercial Companies (LCC) had already since 1988 contained several basic rules on group law. The evolution of Hungarian group law may be described as gradual and reactive. Whilst already in 1988 it had become conceivable that in the foreseeable future groups of companies and the legal problems inherent to them would gain significance, this situation had not then become sufficiently concrete to require a comprehensive legal solution.


Journal ArticleDOI
TL;DR: The question of whether and to what extent legislation is required in order to get rid of this threat to the freedom of competition of the individual and competition itself as an institution has also become topical in the countries of Central and Eastern Europe.
Abstract: Due to its connection with competition, the formation, the conduct, and the steering of groups of undertakings have been a subject of modern competition law since its emergence in the USA of the late 19th century. This is because market players might, by making use of their economic freedom to form and to act as groups, destroy this freedom. The question is, therefore, whether and to what extent legislation is required in order to get rid of this threat to the freedom of competition of the individual and competition itself as an institution. With the transition to a system based on freedom of contracts and freedom of competition, this question has also become topical in the countries of Central and Eastern Europe (CEECs).



Journal ArticleDOI
TL;DR: In more recent publications, and by the way not only those of the German speaking community, it is Max Weber who is most frequently quoted as defining power as the chance for imposing one's own will even against opposition as mentioned in this paper.
Abstract: Anyone approaching the phenomenon of power sets out by searching for definitions or rather formulae so as to somehow make the phenomenon tangible and graspable. In more recent publications, and by the way not only those of the German speaking community, it is Max Weber who is most frequently quoted as defining power as the chance for imposing one's own will even against opposition. At the same time, he described the term ‘power’ as sociologically amorphous, i.e. without form or structure. This characterisation left many unsatisfied, and so people have been looking for statements that could provide the term with a certain ‘form’ after all.

Journal ArticleDOI
TL;DR: In this paper, the authors analyze the monitoring under competition law of the formation and operation of company groups in Poland, and show that the market power of companies and their groups depends not only on their size but also on the size of relevant markets.
Abstract: This paper analyses the monitoring under competition law of the formation and operation of company groups in Poland. Groups of undertakings, which existed in the centrally planned economy, have been eliminated, or have radically, changed the range of their operations. Reasons for the formation of company groups include: risk management on the emerging market, the creation of common investment funds under the restrictive monetary policy, reduced transaction costs, and the delegation of powers to subsidiaries. The groups operating currently were incorporated through agreements between companies, buy-outs of state enterprises by private investors, acquisitions and outsourcing. The distribution networks form the majority of the agreement-based groups. Sectoral diversification is a characteristic feature of the capital groups and in most cases they are vertically integrated. Polish competition law enables the supervision of agreements between undertakings, acquisitions and buy-outs by private investors. The application of the competition law resulted in the formation of multi-sectoral company groups. The market power of companies and their groups depends not only on their size but also on the size of their relevant markets. Liberalisation of international economic relations results in the elimination of barriers to entry on product and geographic markets, weakening the market power of the domestic market players and developing competition.

Journal ArticleDOI
TL;DR: In this article, the authors fit market economy into the categories of the theory of decision-making and defined a market economy as the spontaneous order that results when people coordinate their actions by way of mutual adjustment in transmitting and receiving information.
Abstract: Competition is a value in itself. It is not directed towards specific objectives. Market economy can be fitted into the categories of the theory of decision-making. Decision-makers are individuals, not a collective entity like the state. The objects of decision-making are arbitrary and therefore necessarily unknown. Legally speaking, the participants are making use of their personal autonomy. The procedure of decision-making is the contract, the voluntary reaching of an agreement with another party. The order achieved through such a process cannot be directed towards specific objectives. The methodological reason for this is: freedom would be abolished if one attempted to define its content in advance. Market organisation through competition is the spontaneous order that results when people coordinate their actions by way of mutual adjustment in transmitting and receiving information. Only statements about the general structures of such a system (pattern predictions) are possible. Such a systemt results in mutual advantages for the individuals involved, and in economic overall advantages, as a generic term for growth, inducement and unfolding of technological progress and efficient allocation. This general social task that is achieved by the exercise of individual freedom remains recognisable, even though it may be difficult to discern in the individual case.

Journal ArticleDOI
TL;DR: In this paper, a model of the transformation process of statutory monopolies in European Community (EC) Law, on the basis of the liberalisation of the markets which has taken place in the past ten years, is proposed.
Abstract: This article proposes a model of the transformation process of statutory monopolies in European Community (EC) Law, on the basis of the liberalisation of the markets which has taken place in the past ten years. Despite discrepancies between the paths chosen for the various public utilities’ sectors, EC institutions, including the Court of Justice of the European Communities, have pursued a policy, which they have constantly refined, regarding the transformation of statutory monopolies, regardless of its legal basis in the EC Treaty. After first defending a very far-reaching approach in favour of total liberalisation, EC institutions have adopted a more balanced attitude towards statutory monopolies. This is reflected in a four-tier transformation programme, which comprises both a functional and a structural transformation.