An Overview: The Standard of Review

The antitrust analysis of joint ventures has evolved considerably over
time. Having encountered an increasing number of joint venture
arrangements in a wide variety of contexts, courts have had many
opportunities to analyze challenges to their legality. In reviewing the
legality of a joint venture, a threshold issue is whether the arrangement—
or a particular aspect of it—will be subject to per se condemnation or
rule-of-reason analysis.1
A. The Per Se Standard
A literal reading of the Sherman Act would render every competitor
collaboration unlawful.2 The Supreme Court, however, has held that only
those agreements or practices that are “plainly anticompetitive”3 and
“lack . . . any redeeming virtue”4 constitute “naked” restraints of trade,
1. Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1, 9 (1979) (“[I]t is
necessary to characterize the challenged conduct as falling within or
without that category of behavior to which we apply the label ‘per se
price fixing.’”).
2. See, e.g., Business Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S.. 717, 736-
37 (1985) (Stevens, J., dissenting) (“The plain language of § 1 of the
Sherman Act prohibits ‘every’ contract that restrains trade. Because such
a literal reading of the statute would outlaw the entire body of private
contract law, and because Congress plainly intended the Act to be
interpreted in the light of its common-law background, the Court has long
held that certain ‘ancillary’ restraints of trade may be defended as
reasonable.” (footnote omitted)); Arizona v. Maricopa Cnty. Med. Soc’y,
457 U.S. 332, 342 (1982) (“Section 1 of the Sherman Act of 1890
literally prohibits every agreement ‘in restraint of trade.’”); United States
v. Joint Traffic Ass’n, 171 U.S. 505, 568 (1898) (noting that Congress
could not have intended to render every business contract illegal).
3. National Soc’y of Prof’l En g’rs v. United States, 435 U.S. 679, 692
4. Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958). Of course,
these statements should not be taken to mean that a restraint cannot be
condemned as unlawful just because the industry or organization is
relatively new or has not previously been before the courts. See, e.g.,

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