Competitors often form joint ventures to achieve procompetitive objectives together that they could not achieve alone, such as:

For example, competitors with complementary assets might form a joint venture to enter into a new geographic market, develop new products, or integrate manufacturing facilities.

Any form of collaboration among competitors, including joint ventures, raises potential antitrust risk. In particular, Section 1 of the Sherman Act (Section 1) broadly prohibits contracts, combinations, and conspiracies in restraint of trade (15 U.S.C. § 1) (see Practice Note, Section 1 of the Sherman Act: Overview). However, it does not outlaw every agreement between or among competitors. The antitrust enforcement agencies and the courts recognize that many common forms of joint activity may, overall, promote competition and benefit consumers, rather than limit competition. These types of agreements are analyzed under the rule of reason, which balances the procompetitive benefits against the anticompetitive harm to determine legality (see Practice Note, Antitrust Rule of Reason). Some agreements, however, such as naked agreements between competitors to fix prices or reduce output, are illegal under the per se rule and the government prosecutes those agreements criminally (see Practice Note, Antitrust Per Se Standard).

Transacting parties must report certain joint venture formations to the US federal antitrust agencies and observe a waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) before implementation.

This Toolkit provides several continuously maintained resources to guide counsel in creating and implementing a joint venture. This Toolkit also includes resources on how to ensure a joint venture complies with substantive federal antitrust laws.