Joint Ventures (and Functionally-Analogous Collaborative Arrangements)

This chapter focuses on joint ventures and the restrictive provisions that some joint-venture agreements contain—provisions that preclude the parents from competing against the joint ventures or each other or the joint venture from competing against the parents. This chapter also analyzes collaborative arrangements that are functionally analogous to joint ventures. This chapter argues that some joint ventures and the restrictive provisions the associated joint-venture agreements contain are Sherman-Act-licit and economically efficient, that some joint ventures that by themselves are Sherman-Act-licit and economically efficient will be created by joint-venture agreement that contain restrictive provisions that are Sherman-Act-illicit and economically inefficient, and that the only liberally acceptable way to determine the category to which a particular joint venture and any restrictive provisions with which it is associated belong is to do an individualized detailed analysis that takes account of the relevant considerations that this chapter articulates (inter alia, whether restrictions on the parents are necessary to elicit the parents’ economically-efficient contribution of information and personnel to the joint venture, whether—absent the joint venture—both parents would have invested in the joint venture’s portion of product-space and whether any other actor would replace any such investment the parents do not make individually or through the joint venture, whether either or both parents were effective potential competitors of the other, etc.). This chapter also addresses the appropriate way from various perspectives to define the concept of “an ancillary restraint.” Finally, this chapter distinguishes six functional categories of joint ventures and analyzes the determinants of their impacts on economic efficiency, liberal moral rights, and the instantiation of the various egalitarian conceptions of the moral good.