AAVV - Claves del derecho de redes empresariales

As in networks the amount of value obtained for each member depends of the exercise of its own business activity — and is not fixed in relative terms as in companies — the marginal oscillation between the minimal and the maximum gain possible for each member is limited without the acquisition of new quotes of the market through the efficiency and competition or in the case through an arbitrary decision of network head.

That makes that nor company regulation nor exchange contracts regulation may be recognized as an adequate framework to deal with the relationship between the two kinds of network interest. In the case of company or organization regulation this is so because these regulations impose the prevalence of common interest in opposition to private divergent interest of parties. In the case of exchange contracts regulation because this imposes the prevalence of the parties' private interests.

The harmonization of interests is in consequence an important goal for a network regulation.

An efficient network regulation requires a legal framework that legitimizes both interests — the shared interest as well as the divergent — and shall explain with detail the parties’ or members’ relationships and the cases of prevalence of the first or the second interests when both are in conflict.

c. Hierarchy and market from the legal point of view

Only some words about this central question. Business networks imply cooperation, coordination and competition between members. There is no hierarchy but limited central direction — with different degrees of extension — and the position of the members in face of the direction may vary from the complete independent coordination to the dependence.

There is an inverse proportional relationship between market relationships between members or parties on the one hand, and the extension of central direction and the dependence of the members on the other hand.

A legal business network regulation must take account of this typical network miscegenation and of the dialectic relationship between dependence versus independence and coordination versus market.

d. Characteristics of business networks

Another key issue in the field of networks is the feature whose attendance allows us to recognize the existence of a business network.

Legal scholarship has identified the interdependence and stability — of the network, not the special relationship linking the members with her — as the characteristic of business networks. Complementary activities of the members or parties may be seen also as an essential element.

In the most of the cases these networks imply a division of the functions of production and distribution or others included in the value production chain such as research and development.

It is also characteristic that its members may sustain relations of cooperation and competition between them 11. This statement has important consequences in relation with regarding the question of networks and public interest and in particular in relation with competition issues.

Other relevant feature is the existence of a connection with the market shared by the members or parties — brand, technology, products —.

III. DIRECTION - MEMBERS' PROBLEMS AND HORIZONTAL MEMBERS PROBLEMS

In every network there is a direction centre — network directory — that may reside in the network’s head company, may be a manufacturer — outsourcing — or a provider of services — franchising or credit cards —.

The network’s direction also may reside in the entity that structure the network — Joint ventures, cooperatives, consortium or EIG —, or in a stable committee, personified or not, representative of all or some members of the network.

a. Direction power, control and authorisation

Network’s directory has the power to issue instructions and set the general framework for the development of the activity, to monitoring the implementation of these and in general the activity of the members and to allow the members' business decisions in the cases fixed by contract or by statute.

The foundation of directive power in contractual networks lies in bilateral contracts. These contracts generally parallel, adhesive and with a wide homogeneity, limit the commercial autonomy of the member.

On the one hand they involve the setting — usually via contractual appendices — of essential elements of the member company’s business policy such as the suppliers identity, composition and level of minimum stocks, methods of business organization, tradedress, distinctive signs that identify the products or services and even the store of the member — franchising —, marketing formulas and commercial know-how, among others.

In this way the freedom of network members is limited to the framework specified by the contract, and this transfers the decisions on such questions to the network head.

The contracts also provide supervisory powers, to define a greater or lesser degree the organization of the company’s network member, to allow the head to exercise the of ius variandi — to which we will refer in the over next section —, to instruct network members and to found the network head’s power of moderation among networks members by reference to internal organizational documents of the network.

In the case of organizational or associative networks the power of direction founds in company regulations — cooperatives — or results from consensus — second-degree cooperatives, horizontal groups, consortiums , or EIG, even when statutes establish majority decision, since the members possess extremely easy ways to exercise the right of separation.

The network directory provides the network’s business strategy and controls the performance of its members based on the power under contracts or statutes that govern the relationship that links each one with the others or with the head of network.

It also coordinates the activities of its members on achieving the targets — expression of shared interest — and mediates or arbitrates competitive struggles among its members — expression of divergent interest —.

In any case, the preservation of effective competition in the market stands as a limit to power steering, as we will discuss in the last section of this paper.

b. Network’s governance

The exercise of the directive power in networks requires that is shall be done for the benefit of the network, as in the case of corporations and corporate groups, in which it should be exercised for the benefit of society or group.

Unlike the case of corporate common interest, the interest of the network includes not only the parallel interest shared by its members but also their divergent interests. The attainment of the shared interest must respect their contradictory divergent interests.

In this sense the network resembles democratic states which are characterized not only by taking majority decisions but by respecting minorities taking into account their interests.

In this sense the exercise of network directive power by the directory shall take into account of the divergent interest of the members and shall not hurt them if there is not need. Just as in antitrust logic we postulate that a directive action that hurts the divergent interest of a member shall be covered by the shared interest and justified as inevitable to obtain a network goal. This implies that it must be clear that no other less harmful alternative for the member may be found.

An efficient exercise of directive power requires appropriate network governance.

This involves the recognition of the existence of special duties of care and loyalty that affect the network directory in the exercise of directive power and the establishment of a framework for dialogue within the network, enabling efficient pursuit and not conflictual power steering.