The Antitrust Review of the Americas 2017

United States: Joint Ventures

Many joint ventures are lawful under section 1 of the Sherman Act1 because they promote competition by bringing together independent and complementary resources that promote competition.2 But some ventures can reduce competition by bringing together competing resources and exercising market power. Once formed, joint ventures may be sufficiently integrated that their activity is akin to that of a single economic entity. As such, they may be beyond the reach of section 1 of the Sherman Act because section 1 requires an agreement among independent actors. But as recent developments show, successfully persuading a court that joint venture partners are a single economic actor and beyond the reach of section 1 is highly uncertain. Courts are still working through the application of the pertinent US Supreme Court precedent and are unpredictable in their treatment of joint ventures. For example, as explained below, in one Sixth Circuit case, the majority and dissent did not agree on the way to apply US Supreme Court precedent or how to weigh the facts. Also, two recent trial court judges have come to different views on whether a joint venture and its owners are capable of conspiring under section 1. Further, the lower courts have not always applied all the factors considered by the US Supreme Court. These developments suggest joint venture parties bear substantial risk if they rely on a court concluding they are incapable of conspiring to avoid section 1 liability.

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