Joint Ventures Do's and Don'ts
18th April 2018
Many family businesses looking to grow and move into new operations often decide to embark on joint ventures. Whilst working together can be very rewarding and help you achieve long-term, shared objectives, there is a lot to consider in the process. For example, you need to ensure you are complying with the competition law.
The CMA has recently published a short guide on Joint Ventures and Competition Law: do’s and don’ts. Whether you are already in or are considering entering into joint ventures, alliances or other forms of collaboration with another business, you will find useful advice. The guide urges competing businesses to make sure they collaborate legally, check they are compliant with competition law from the outset of agreements and to keep arrangements under regular review to help ensure they remain compliant.
Ann Pope, CMA Senior Director, Antitrust, said: “At the CMA we support collaboration between competitors that leads to innovation and directly benefits customers but there can be a fine line between collaborating and colluding. Certain forms of collaboration between competitors are illegal under competition law and businesses can face large fines if they break the law.
Competing businesses setting up a joint venture should be clear about how collaborating will directly benefit customers, and that the benefit of joining forces couldn’t equally be achieved by acting alone but in competition with each other.
Labelling a collaboration as a ‘joint venture’ will not protect businesses from the scrutiny of competition law. Our new advice provides pointers on what is and isn’t allowed when operating a new or existing joint venture - I urge businesses and legal advisors alike to read and share it.”