Competition Issues in Joint Ventures

Joint ventures present a wide spectrum in terms of their cost-benefit ratios where costs refer to anti-competitive effects and benefits mean pro-competitive efficiencies. Many joint ventures warrant a competition review based on a careful assessment and balancing of pro-and anti-competitive effects. Joint ventures having overall pro-competitive effects should be permitted, but this is not necessarily the case for any anti-competitive restrictions they may contain. Enforcement guidelines are particularly valuable in terms of enhancing compliance with competition laws. Safe harbours are especially helpful. When countries’ laws have important differences in procedural and substantive treatments accorded to mergers as opposed to inter-firm agreements, firms may have strong incentives to structure their joint ventures in ways that might be sub-optimal from an economic efficiency perspective. European Union competition policy and policies in countries following the European Union example have traditionally been more formalistic and less economic in their approach to joint ventures than has been the case in many other jurisdictions. They may also have been more restrictive as regards joint ventures. Both differences eroded in recent years, however, as reflected in the European Union’s approach to horizontal agreements. This document comprises proceedings in the original languages of a Roundtable on Joint Ventures which was held by the Committee on Competition Law and Policy in October 2000.