Ventur and Competition Essay Example | Topics and Well Written Essays - 500 words

Ventur and Competition - Essay Example States is the Federal Sherman Act 1890, with each state having reciprocal antitrust provisions effectively mirroring the Sherman Act (Hovenkamp, 2005). The essence of the Sherman Act is the prohibition of agreements that unreasonably restrain trade, monopolies, attempted monopolies and conspiracies to monopolize (Sherman Act 1890, section 1). The relevant enforcement body is the Federal Trade Commission, the U.S. Department of Justice, state attorneys and general or private parties affected by any proposed anti-competitive measure (Posner, 2001). If a joint venture or partnership agreement is found to fall within any of the Sherman Act 1890 prohibitions, the penalties for violation include the following: The main reason that healthcare joint ventures can fall foul of the antitrust provisions under the Sherman Act is that often the partners will be competitors within the same market with the overriding purpose being to pool resources to maximise economic benefits (Elhauge & Geradin, 2007). However, if additional to this, the venture partners continue to compete outside of the joint venture agreement, the antitrust legislation imposes restrictions on conduct between the partners (Hovenkamp, 2005). Secondly, one of the partners in the venture may have market power or the result of the venture will be to increase market power, which can be anti-competitive if the partners to the venture are then enabled to set prices above a competitive level. Furthermore, in considering the proposed joint venture the company should consider the following four issues in particular: In considering compliance with Sherman Act provisions, it is vital for the company to consider the relevant market (Posner, 20010. The relevant market comprises the relevant service market and relevant geographic market (Elhauge & Geradin, 2007). The service market is where the market of services is â€Å"reasonably interchangeable† and the relevant geographic market is â€Å"the area of effective