Forms of Manifestation of Economic Concentration in International Trade


Economic development of participants in international trade is a naturally goal which leads to the creation of complex structures, with or without legal personality that tend to dominate the market. A dominant position can only be the result of successful actions that have created a prosperous position, customers for the company with such a position. The legislature could not conceive that the professionals in trade to remain in positions of approximately equal share without distinction in terms of market domination. Such a picture of market competition is more compatible with a centralized economy, an economy in which resources and operations are distributed or arranged by a national authority. These structures, the result of economic concentration, can have different shapes and sizes, their diversity being given by each national legal system, but are characterized by certain traits, peculiarities which we will analyse in our study. In Romanian law, as in the French-inspired national systems, is recognised the existence of the Economic Interest Group (EIG) which is outlined at the European level as a European Economic Interest Group. Joint venture, all French-inspired, is not a new institution from law point of view, being taken from the old commercial code, but it is applied frequently in the market, being a simple operation aimed to realise a business partnerships to achieve in joint activities. Our approach will extend to other manifestations of economic concentration known in international trade, in particular on those existing at European level, referring here to the English and German law.


1.General considerations

Naturally, the economic concentration is a desirable phenomenon of business, they being interested

in profit growth and achieving domination, control over a segment of the relevant market. The

economic concentration is seen in terms of competition as a potential risk for the market, although

there is admitted that naturally, any form of concentration leads to development and performance.

Banning the merger would be an abuse that would narrow the right to association, to decide freely on

the market if you do anything or not, in the interest of your own business. This form of enterprises

differs from one legal system to another, customizing it mainly in the following forms: in German law

by establishing the corporation, in English law by recognizing groups holding and in French law is

specific Economic Interest Group. In European law is established the European Society by Regulation

(EC) no. 2157/2001, followed by another regulation regarding the status of European Cooperative

Society, adopted by Regulation (EC) No. 1435/2003.

Thus, it is allowed to arise groups of companies that allow the concentration of capital in various

forms, literature showing that they are marked by the existence of two elements of the international

conjuncture: the revolutions in Central and Eastern Europe and adopting the euro (Mazilu, 1999, p. 3).

No matter of organization of these types of groups of companies, in French law and systems of

French inspiration, as is the Romanian law, is allowed to conclude a contract of joint venture, a

contract named, acknowledged by the legislative, through which as a result of a joint venture does not

creates a new legal entity, but associates agree to participate in one or more operations that they will

undertake. In this way, joint venture is a form of concentration of capital, with its peculiarities, distinct

from forms shown above and that we find in international trade.

The analysis of the forms of economic concentration are also relevant for both law theorists and

practitioners in international trade, because knowing different ways of association through which they

can achieve legal control of a market segment or economic development and it is especially useful

taking into account the existing differences in the legal approach at international level in terms of the

two major legal systems: the European system and common-law system. International trade

professionals can decide what type of concentration is the most appropiate concentration for their

specific interests, so that the investment made to matchthe economic purpose for which it was


In the following analysis, we will focus on the main forms of concentration encountered in

international trade, showing their particularities, especially those functional in European law: concern,

the holding, group of economic interest and European group of economic interest, European companies

and European cooperative companies. We will show their importance, making a comprehensive

overview and presenting ways of constituting and realization of concentration and where appropriate

comparative analysis.

2.Business Organization as Concern

Concern has its origins in german law, being essentially a group of companies with economic power

relatively small, but that is of interest for concern because of its development capabilities, corporation

providing a unitary management in order to pursue a common economic and commercial policy,

leading through this mechanism to control an entire relevant market of a product or service.

As similar form of manifestation at internationally level is Trust,concern being formed after its

pattern, which are pooled in strong collective groups, small companies that are subordinate, its purpose

being to specialize and coordinate the companies that compose it. As an immediate expected result is to

increase profitability and efficiency of the trust and its subordinated structures (Dumitrescu, 2014, p.

68). As a feature of it, the companies lose their autonomy, which demonstrates the level of economic

concentration. Trust is specific to the US economy (North America) and Germany, from which it was

drew concern.

Unlike trust, in the case of concern, both the dominant and dominated societies keep their legal

status, such as the group control is ensured by controlling the decision, to the level of governing bodies

that meet economic and commercial strategy of the corporation.

As a way of formation and organization, it can be found in the international market as concern by

domination and as concern by incorporating. In the first case, the dominant company acquires from the

market shares or social parts of society dominated to such an extent that it acquired a controlling stake

of the capital. In the second case, the dominant company is the only partner / shakeholder of a company

dominated (embedded), way that ensures control at all levels.

We appreciate that the concern, compared with the trust, provides greater equity of the advantages

of the concentration in terms of both dominant and dominated society. By keeping the legal personality

of companies dominated, it is also protected the goodwill and intangible elements, which once acquired

and known on the market, their protection will maintain the relationships with third parties. In addition,

changing the ownership structure by the appearance of dominant society, is another advantage, in our

view providing stability and confidence, for third parties. The mainstream society is also interested in

this way of concentration because it is more efficient decision control, by the fact that companies which

are still dominated operates under the laws of that State, so there are no major structural changes, the

changes being only in the managerial decision level.

3.Business Organization as Holding

Holding is another form of capital concentration created by buying on the market shares belonging

to one or more companies, that after these operations will be part of a group holding. As the origin, the

holding is specific to English law, similar to concern, through which it is not to create a new legal

entity, distinct from the dominant society. The purpose of holding company is to acquire the entire

stake of the company on which is seeking to obtain control, offering founders for their actions, after

negotiations, in exchange shares of the holding company. In this way, both companies will get

advantages: the dominant one is strengthens its market position and the dominated one opens prospects

for economic stability and development.

Also Regulation (EC) no. 2157/2001 confers the possibility of creating an European holding

companies. Thus, public and private limited-liability companies, incorporated under the law of a

Member State, having its registered office and head office within the community may promote the

formation of a European company holding, if at least two of them are governed by the laws of different

Member States and have at least two years had a subsidiary company governed by the law of another

Member State or a branch situated in another Member State.

Under the regulation, literature (Sitaru, 2008, pp. 318-319; 325-326) identify for the establishment

of a European company holding the performance of the following graduate steps: Drafting a

constitution proposal; Ensure publicity of the proposal for the establishment of holding company under

the law of each Member State in whose territory the headquarters of the participating companies reside;

Drawing up a report by a group of experts on the proposal; Proposal approval by the general meeting of

each of the merging companies; Making advertising holding company formation for each of the

companies party; Registration of the holding company. Making publicity about registration of the

European holding company.

We consider that holding is a form of concentration of a group of companies that is of interest

especially to investors, prospective partners, which want to constitute a strong holding company by

their mere association but also by companies that will dominate holding, especially due to the fact that

they can offer advantages to companies founders seeking to dominate.

4.Business Organization as Economic Interest Groups

These groups of companies known after initial G.I.E. (Economic interest group) and G.E.I.E.

(European Economic Interest Group) are regulated both in Romanian law but also in legislation of

other countries, inspired by the French law. They are associative forms, representing a new legal entity

that performs activities of common interest to associates.

In our law, it has to be mentioned the law no 161/2003 regarding some measures for ensuring

transparency in exercising public dignities, public functions and in business, preventing and

sanctioning corruption.

G.I.E. is a legal entity with patrimonial purpose, result of the association of two or more natural or

legal persons, constituted for a determined period in order to facilitate or development activities of its

members, as well as improving the results of that activity (Article 118 of the Act).

Regarding the group's activity, it must relate to the economic activity of its members and have only

incidental to it.

G.E.I.E. are legal entities recognized in Romania, operating under Council Regulation (EEC) No.

2.137 / 85 of 25 July 1985 on the establishment of European Economic Interest Group, published in the

Official Journal of the European Communities no. L 199 of 31 July 1985. European economic interest

groups registered in Romania cannot have more than 20 members.

Also the European economic interest group and economic interest group cannot issue shares, bonds

or other negotiable instruments.

From the statements presented above, groups do not represent a real form of economic concentration

as holding or concern, but they are a means that can be used by any entity operating in the international

market, with the main purpose of their business development. As we highlighted both corporation and

holding company aimed at developing a specific niche market, specialisation of the enterprises in the

relevant market and interest groups can contribute to fulfilling this objective.

By EU Council Regulation no. 2137/85 European legislator has formulated minimized rules in order

to be applied more easily, act endowing European economic interest group members with considerable

freedom in their contractual relations and the internal organization.

Economic interest group was conceived as a legal structure located between society and association,

the dominant in its organization and functioning being the will of members, allowing joint actions more

effective than mere collaboration contract, due to the legal personality of the group.

5.Business Organization as European Companies and European Cooperative Societies

In the absence of a definition of the European Company (SE) specified by Regulation (EC) no.

2157/2001 on the European Company Statute, we can say that European Society (SE) is a form of joint

stock company, also called anonymous European society, which is constituted within the European

Union under the conditions and in the manner prescribed in the Regulations and by the rules of national

law of the Member State in whose territory has its head office.

The necessity of creation of legal framework resides in the preamble to the Regulation, the Council

stating that: „The completion of the internal market and the improvement it brings about in the

economic and social situation throughout the Community mean not only that barriers must be removed,

but also that the structures of production must be adapted to Community dimension. For that purpose it

is essential that companies the business of which is not limited to satisfying purely local needs should

be able to plan and carry out the reorganization of their business on a Community scale.”

Basically this regulation represents a new vision of the organization and reorganization of

enterprises involved in trade at Union level, while respecting competition rules under the Treaty.

Importance of the adoption of Regulation 2157/2001 is that it allows the creation and management

of companies with a European dimension, without the constraints resulting from the disparity and the

limited territorial application of national law on commercial companies.

The European company is marked by the following features: It is a limited company formed under

that regulation; Capital is divided into shares, and shareholders are not responsible for a different

amount than the subscribed amount. The capital of a European society is expressed in euros. The

subscribed capital may not be lower than the amount of 120,000 euros.; European company benefits

from its own legal personality; Acknowledge the right of employees to engage in issues and decisions

affecting the life of SE, in accordance with Directive 2001/86 / EC; As a rule, the legal regime of

European society is governed by the rules of the Regulation, and the exceptional way, if the rules

permitted or no incidents rules will be applicable provisions of the law of the Member State in whose

territory the company has established headquarters.

Regarding European cooperative societies, they are covered by Regulation (EC) no. 1435/2003 on

the Statute of the European Cooperative Society and Council Directive. 2003/72 / EC supplementing

the Statute for a European cooperative society with regard to employee involvement.

From the preamble to the regulation can detach the arguments that led to the concern of the

European legislator for this type of company, in that what it is found at Community level is that

business are still governed by national laws, and this regulatory framework is not always appropiate to

the objectives pursued by the Treaty. Also legislature is interested in setting up groups of companies of

different Member States, so we have shown above, and at the same time, wanting to ensure equal

conditions of competition and to offer the same opportunities on the market to cooperatives, entities

that have particular features by comparison with other companies on the market.

Cooperatives are primarily groups of persons or legal entities which comply with special operating

principles, different from those of other operators. These special principles relate in particular to the

rule of the person, which is reflected by specific provisions on the conditions of accession, withdrawal

and exclusion of members. Regulation 1435/2003 aims mainly the establishment of a European legal

form for cooperatives, based on common principles, but that take into account the specifics of

cooperatives, which allow them to operate outside to their national borders, throughout the community

or a part thereof.

As in European society, and in the case of European cooperative, regulation does not provide a

definition, but in literature was concluded on the basis thereof (Sitaru, 2008) that it is the joint stock

company with legal personality established in the manner prescribed by regulation.

The main specific features of European cooperative society can be drawn from the regulation, thus:

Is a company whose its subscribed capital is divided into shares and the number of members and

capital are variable. The subscribed capital is at least 30 000; Its main purpose is satisfaction of the

needs and / or development of economic and social activities of its members. By way of exception,

only if it is mentioned in the statute, non-members can benefit from its activities or participate in its

operations; Has legal personality; Involvement of employees is permitted under the conditions of

Directive 2003/72 / EC.

6.Business Organization as Joint Ventures

By comparison with the forms presented above, a discordant note is the joint venture, which

although is a joint with economic purpose, so a concentration of capital, it does not create a new legal

person, distinct to operate on the market. Apparently we might confuse joint venture with a constituent

act, specific for societies which creates a new entity. This confusion could be produced by the fact that

we consider contribution to association, to share in profits and losses, the management of the

association, so specific elements to societies.

But according to art. 1941 Civil Code joint venture contract is a contract by which a person give one

or more people a stake in the benefits and losses of one or more operations that he is undertaking. As

remarked in legal literature (Nemes, 2012, pp. 348-355) art. 1941 Civil Code should be read in

conjunction with art. 1881 Civil Code on civil society without legal personality, according to which the

articles of association requires the manifestation of the will of two or more persons who mutually

undertake to cooperate in order to conduct an activity and contribute to it through cash contributions in

goods, specific knowledge or benefits with the aim of sharing the benefits or to use the economy that

may result. Each partner contributes to bear losses proportional to the distribution of benefits, if the

contract has not been agreed otherwise.

Regarding our study, a joint venture is a manifestation of economic concentration, even it is a

structure without legal personality, so that we do not undertake to third parties in its own name

(Stanciulescu, 2012, pp. 268-275). Mere intent of the associates to work under contract in order to

develop joint commercial activities, demonstrates their intention to concentrate, to make their presence

felt in the market in a way permitted by law. It is true that these associative are not very large, that

would create a dominant position on the market or jeopardize competition.


In our opinion, any of the presented forms are of interest as a way of formation of economic

concentration and it is not possible to say that one of the forms stand out against another. It depends

very much on what the entities involved want: economic and decision-making control (see holding

company and concern), the development of research in general, in marketing in particular, of some

common activities (see GIE and EEIG), care for fulfillment of needs and/or development of joint

economic activities (European companies and European cooperative societies) or creation of new

contractual partnerships that lead to growth of the profit for work done (joint venture).

We appreciate that economic concentration should not be viewed only in terms of competition, in

the sense of control that antitrust authorities have to carry it out to discipline the market. This market

should be analyzed from the perspective of the possibility of development, creating advantages for both

entities involved in business and consumers. European legislature is very concerned about the

functioning of a free market in which, in compliance with competition rules, to rule out the principle of

equal opportunities to work in business, the possibility of cross-border development, to respect the

principle of freedom of contract and association. Obviously all these manifestations of concentration

must be controlled, but not restrictively, to be permissive. Also, analyzing the European market it was

found that national laws are not always adjusted to objectives of the Treaty, which required the

adoption of regulations, analyzed in our study, through which were eliminated any discrepancies to the

level of union. Also, we must recognize that as long as there are not violated the rules of the Treaty,

there may be forms of concentration which have their origin in legislation of different countries.


  1. Mazilu, D. (1999). International Trade Law. Bucharest: Ed. Lumina Lex.
  2. Dumitrescu, A.D. (2014). International Trade Law. Bucharest: Ed. C.H. Beck.
  3. Sitaru, D-A. (2008). International Trade Law. Bucharest: Ed. Universul Juridic.
  4. Nemes, V. (2012). Trade Law. Bucharest: Ed. Hamangiu.
  5. Stanciulescu, L. (2012). Civil law course. Contracts. Bucharest: Ed. Hamangiu.
  6. Regulation (CE) no 2157/2001 on the statute for a European company Regulation (CE) no 1435/2003 on the statute for a European cooperative society Law no. 161/2003 on measures to ensure transparency in the exercise of public dignities, public functions and in business, preventing and sanctioning corruption

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