The CMA is today publishing advice for businesses thinking of, or already operating, joint ventures to help them comply with competition law. This follows a recent case where two businesses in a joint venture were fined £1.7 million by the CMA for agreeing to share the market under the cover of a joint venture agreement.
The CMA’s short guide on Joint Ventures and Competition Law: dos and don’ts is for businesses that are already in, or are considering entering into, joint ventures, alliances or other forms of collaboration with another business.
The CMA’s advice 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. In addition to publishing the advice, the CMA is also writing directly to over one thousand regional commercial law firms to ask them to share the advice with their clients.
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.