Vanderbilt Journal of Transnational Law

First Page



The joint venture is a form of organization widely used in international business. Although anticompetitive effects of mergers, interlocking directorates, and cartels are more frequently the targets of enforcement efforts under antitrust laws than joint ventures, the latter can be equally effective in reducing competition in the market place.

The legal status of joint ventures in various jurisdictions has remained a subject of some confusion possibly because of their hybrid nature--not quite cartels, yet not quite mergers. This confusion still exists to some extent in the United States, despite the fact that the Supreme Court has held that section 7 of the Clayton Act, which is aimed specifically at mergers, is also applicable to joint ventures. Although it is not the purpose of this article to discuss antitrust policy toward joint ventures in the United States, the subject matter is important to American business firms, particularly those contemplating joint ventures with Common Market partners. When firms "domiciled" in different jurisdictions undertake joint operations, the antitrust inquiry may involve more than one set of antitrust laws, and it is quite likely that a restraint on competition which is legal in one forum may be illegal under the laws of another. This is especially true when the analysis involves United States and Common Market antitrust rules, primarily because the Treaty Establishing the European Economic Community (EEC Treaty) has no provision comparable to section 7 of the Clayton Act prohibiting anticompetitive effects resulting from mergers. Another major reason is the fact that the EEC Treaty contains a provision which provides an exemption for prohibited anticompetitive agreements meeting certain criteria. No such exemption is found in United States law.