Joint venture is defined as “any collaborative effort among firms, short of merger, to the restrictive: separate enterprise characterized by an integration of operations between subject to control by its patent firms which results in the creation of significant new enterprise capability . . .” (Lerner et al., 2000, 5). Previously, the definition of a joint venture is very broad as it tends to encompass a wide of different collaborative activities. As such, the legal and business communities established this definition in order to clearly identify a legitimate joint venture under the antitrust laws.
There are also various laws that govern joint ventures as well as competition among organizations. In the United States of America, there are several federal laws that govern most of the areas that are within the field of antitrust law such as: the Sherman Anti-Trust Act, The Clayton Act, and the Federal Trade Commission Act.
The Sherman Anti-Trust Act is recognized as the basic federal antitrust statute in the country. The main purpose of this act is to prohibit businesses that participate in interstate commerce from contracting, combining, or conspiring in order to restrain trade or establish a monopoly of the market for a certain business. The violations that are included within the Sherman Act are: price fixing, group boycotts, allocating markets, and monopolization (“Texas Antitrust Law”).
The Clayton Act is regarded as another major antitrust law. This law focuses on prohibiting activities that lessen or impede competition or establish monopoly in an industry. It also bans making contracts that would create price fixing, price discrimination, and tying. In relation to these, the United States Congress enacted an amendment to the Clayton Act, which is known as the Robinson-Patman Act. The purpose of this amendment is to strengthen prohibitions when it comes to price discrimination. Moreover, this act makes sure that businesses have equal opportunity in the various operations of their business (“Texas Antitrust Law”).
Lastly, the Federal Trade Commission Act is responsible in prohibiting and addressing unfair competition that would be detrimental to commerce. A violation is said to be committed when there are the presence of material practice, representation or omission that will mislead reasonable consumers. This act prevents people and businesses from making false statements about their products and services. The main objective of this statute is to safeguard the public from anti-competition (“Texas Antitrust Law”).