On the Antitrust Treatment of Production Joint Ventures

Abstract

The U.S. Congress is currently considering several bills to alter the antitrust treatment of collaborative production activities among rival firms. This paper sketches the tradeoffs involved in altering U.S. antitrust treatment of joint venture production activities among rival firms. This requires understanding the nature, benefits, difficulties and dangers to competition of production joint ventures; identifying their degrees of prevalence in the U.S. and elsewhere; summarizing the current antitrust treatment of joint ventures; and analyzing the interactions between U.S. competitiveness and antitrust treatment of production joint ventures. We discuss these topics below, after which we assess some proposed alterations to the antitrust treatment of production joint ventures. We conclude that current antitrust law and enforcement policy with regard to production joint ventures are working quite well and hardly can be considered a hindrance to innovation or “competitiveness.” We support some modest changes in antitrust law that may serve to encourage pro-competitive joint production ventures, but we do not endorse the more sweeping legislative changes by Jorde and Teece in this issue.