Corporate Practice Series Portfolio No. 66-2nd, Antitrust Aspects of Joint Ventures, discusses the antitrust analysis of joint ventures. The portfolio provides an overview of the relevant antitrust statutes and enforcement guidelines. It then examines horizontal joint ventures — between firms that compete with each other; vertical joint ventures—between firms at different levels of production or different levels in the chain of distribution; and conglomerate joint ventures — between firms neither in competition nor in a vertical relationship with each other. The Portfolio distinguishes joint ventures from mergers and cartels, and discusses the approaches to joint ventures taken by the Justice Department and the Federal Trade Commission. After considering joint ventures that are either clearly illegal or clearly permissible, it analyzes the balancing test used for joint ventures whose net competitive effects are not clear on their face. The Portfolio discusses the adverse effects that may result from operating joint ventures, and examines the development and application of the ancillary-restraint doctrine. Finally, it examines specific types of joint ventures, including joint buying arrangements, research and development joint ventures, production joint ventures, and various marketing joint ventures.

Portfolio 66-2nd: Antitrust Aspects of Joint Ventures

I. Introduction
  A. Scope of the Portfolio
  B. Beneficial Effects of Joint Ventures
  C. Adverse Effects on Competition

II. Relevant Statutes and Enforcement Guidelines
  A. Statutes
     1. Section 7 of the Clayton Act
     2. Section 1 of the Sherman Act
     3. Section 1 versus §7 standards of legality
     4. Section 2 of the Sherman Act
     5. Section 5 of the FTC Act
     6. Hart-Scott-Rodino Antitrust Improvements Act
     7. National Cooperative Research Act
     8. Webb-Pomerene Act and other export acts
  B. Enforcement Agency Guidelines

III. Types of Joint Ventures
. Introductory Material
  A. Horizontal Joint Ventures
  B. Joint Ventures Among Non-competitors
     1. Vertical joint ventures
        a. Antitrust objections
        b. Antitrust trends favoring vertical transactions
        c. Renewed concerns
     2. Conglomerate joint ventures

IV. Distinguishing Joint Ventures From Other Cooperative Arrangements
  A. Why Joint Ventures Are Treated Differently From Cartels and Mergers
  B. The Antitrust Analysis of Cartels
  C. The Antitrust Analysis of Mergers
  D. Factors Distinguishing Legitimate Joint Ventures From Mergers and Cartels
     1. Distinguishing joint ventures from mergers
     2. Distinguishing joint ventures from cartels

V. The Enforcement Agencies' Approach to Joint Ventures
  A. Collaboration Guidelines
  B. ‘Quick Look' Approach

VI. Assessing Ventures in Which the Competitive Impact Is Clear
. Introductory Material
  A. Joint Ventures That Are Illegal on Their Face
  B. Joint Ventures That Are Obviously Permissible

VII. The Balancing Test for Joint Ventures in Existing Markets
. Introductory Material
  A. Assessment of Anti-competitive Effects in Primary Markets
     1. Relevant product and geographic markets
     2. Determining the firms in the relevant market
     3. Determining market power
  B. Rebutting Proof of Adverse Effects
     1. Factors mitigating market power
     2. Continued competition among joint venture partners as a mitigating factor
  C. Determining Joint Venture Efficiencies
     1. The courts' treatment of joint venture efficiencies
     2. The agencies' treatment of joint venture efficiencies
     3. Specific types of efficiencies
        a. Elimination of duplication
        b. Reduction of risk
        c. Entry to new markets
        d. Economies of scale
        e. Pooling of complementary resources

VIII. Adverse Effects Resulting From the Operation of Joint Ventures
. Introductory Material
  A. Exchange of Competitive Information
  B. Ancillary Restraints
    1. The ancillary restraints doctrine
    2. Specific types of ancillary restraints
       a. Agreements not to compete
         (1). Vertical agreements not to compete with the joint venture
         (2). Horizontal agreements by partners not to compete with each other
       b. Limitations on access to joint ventures
         (1). The benefits of access restrictions
         (2). Requiring access to essential facilities

IX. Specific Types of Joint Ventures
. Introductory Material
  A. Joint Buying Arrangements
  B. Research and Development Joint Ventures
  C. Production Joint Ventures
  D. Marketing Joint Ventures
    1. The anti-competitive potential of marketing joint ventures
    2. Marketing joint ventures that facilitate access to new markets
    3. Marketing joint ventures in existing markets
    4. Joint ventures for export markets

Portfolio 66-2nd: Antitrust Aspects of Joint Ventures

Wks. 1 Sherman Antitrust Act, 15 U.S.C. §§1 and 2
Wks. 2 Clayton Antitrust Act, 15 U.S.C. §18
Wks. 3 Federal Trade Commission Act, [15 USC 45] 15 U.S.C. §45
Wks. 4 U.S. Department of Justice & Federal Trade Commission, Antitrust Guidelines for Collaborations Among Competitors (2000)
Wks. 5 U.S. Department of Justice & Federal Trade Commission, Horizontal Merger Guidelines (2010)
Wks. 6 U.S. Department of Justice & Federal Trade Commission, Statements of Antitrust Enforcement Policy in Health Care (1996)
Wks. 7 U.S. Department of Justice, Antitrust Guide Concerning Research Joint Ventures (1980)
Wks. 8 Terms of Horizontal Joint Venture Agreements
Wks. 9 Sample Joint Venture Provisions to Avoid Spillover Effects 

Thomas A. Piraino
Parker-Hannifin Corporation
Cleveland, OH