A more detailed issue is the question of how to interpret the phrase about a company that ‘can exercise a dominant influence over another’ used in the Directive. According to the EWC Directive there are three ways for a company to exercise control:

• the ownership of shares (company’s subscribed capital);

• controlling the majority of votes attached to the shares of a company;

• appointing more than 50 per cent of a company’s administrative, management (for example, board of directors) or supervisory (supervisory board) bodies.

These regulations exclude, however, companies in which a given company has holdings (defined by Council Regulation 4046/89).

It is widely disputed whether subcontractors and franchisees fall within the category of companies over which the receivers of their production/services (that is, groups of undertakings) exercise a dominant influence. In fact, these relations between such subcontractors and the sole purchasers of their products/services represent a situation known as monopsony (a market in which there is only one buyer).