K.6 A JV may constitute an anti-competitive agreement95, if it can be judged to have an appreciable effect on competition. In general, although much will turn on the likely economic effects the agreement in question, a JV agreement is unlikely to be judged to have an appreciable effect on competition (and therefore is unlikely to infringe competition law) if the JV entity's share of the relevant market is less than 10%.
K.7 Where the JV's share of the relevant market is in excess of 10%, the JV agreement may still be exempted from the UK and EC provisions against anti-competitive agreements. There is an exemption for research and development (R&D), e.g., which seeks to encourage co-operation in R&D, although a competition authority investigating a JV arrangement would typically be concerned to ensure that such arrangements do not unduly prejudice potential competition in the future (particularly if the arrangements extend to joint production and/or exploitation). The JV's founders will need to consult their advisors and "self-assess" the JV agreement for compliance with competition law as it is no longer possible to notify proposed agreements to the relevant competition authority in order to gain advance clearance.96
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95 A JV agreement will normally only be assessed as an "agreement" if it is not a "merger" for the purposes of the Enterprise Act or the ECMR (regardless of whether the "merger" needs to be notified).
96 OFT Guidance www.oft.gov.uk/advice_and_resources/publications/guidance/competition-act.