Chapter IV. An Overview: The Standard of Review

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CHAPTER IV

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 ar-

rangements in a wide variety of contexts, courts have had many opportu-

nities to analyze challenges to their legality. In reviewing the legality of a

joint venture, a threshold issue is whether the arrangement—or a particu-

lar 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

1

. Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1, 9 (1979) (“[I]t is neces-

sary to characterize the challenged conduct as falling within or without

that categor y of behavior to which we apply the label ‘per se price fix-

ing’”).

2

. E.g., Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 US. 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 read-

ing of the statu te 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’ restrai nts of trade may be defended as reasonable.” (footnote

omitted)); Arizona v. Maricopa County Med. Soc’y, 457 U.S. 332, 342

(1982) (“Section 1 of the Sher man 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).