Joint Ventures and Competitor Collaborations: A General Overview

05/05/2011

You have just been hired as the general counsel for a global energy company with integrated upstream and downstream operations throughout the world. On your first day, the company’s CEO comes to you with a new idea: the company is going to pair up with one of its main competitors to form a joint venture to refine and sell gasoline in part of the western United States. The CEO explains that, rather than competing against this rival company in the target market, it would be more lucrative to collaborate and divide the profits evenly. The joint venture would not only market both brands of gasoline under their original names, but it would also be able to set a single price for both brands.

You can see that the CEO is excited about his latest brainchild. But he also has a serious question: “I know someone’s going to sue us about this, but the returns would be worth it… if we win. Are we breaking any of the antitrust laws?” The CEO tells you that the Board is waiting to finalize the deal until he gets your approval.

You tell the CEO that you will have an answer for him by the end of the week.

Presented at Antitrust and Consumer Law Issues In the Energy Industry, May 5-6, 2011, Houston, Texas. To read the full text, click here.

 

Email Disclaimer