If a driving impetus of capital is competition, it is in tension with a tendency towards concentration. Joint venture operations which exclude the entry of potential competitors by circumscribing the assignment of participants’ interests are an example of the latter. The anti-cartel provisions of the Competition and Consumer Act 2010 (Cth) may be understood as an attempt to manage these divergent tendencies. Their operation also suggests deeper questions about the role of the state and law in overseeing the economy.

Joint venture operations may be traced to the mercantilist period of the 18th and 19th centuries. English and Scottish merchants pooled financial resources for the common purchase of goods to be divided among the participants or sold. Early joint ventures law was outlined in cases such as Hoare v Dawes (1780) 1 Doug 371; 99 ER 239 (an arrangement for the purchase of a ‘lot’ of tea) and Coope v Eyre (1788) I H Bl 37; 126 ER 24 (parties engaged in the common purchase of oil).

This spirit of common endeavour lives on in Australia, for example in the co-operative mobilisation of financial, technical, and human resources by participants in joint venture mineral and petroleum exploration, development, and production activities. As well as hoping to maximise their productive potential, joint venture participants can also expect to enjoy other advantages, including in relation to tax offsets and financing flexibility.

The logic implicit in joint ventures – maximising return on investment – would also seem to inform efforts aimed at preventing new parties entering into the arrangement and sharing in its advantages. This occurs when the joint venture participants by agreement place restrictions on their ability to assign their proprietary and managerial interests in the joint venture – their “participating interest”. Such restrictions may be intended to ensure that future participants are commercially compatible and have the necessary financial and other resources.

Conditions are imposed on participants hoping to assign the whole or part of their interests to non-related third parties. For example, a requirement that the participant offer its participating interest to other participants in the joint venture before doing so to a third party.

Inasmuch as their effect may be to prevent other corporations entering into the joint venture, assignment restrictions may offend the provisions of Pt IV Div 1 of the Competition and Consumer Act 2010 prohibiting cartel conduct. Such conduct may be both a criminal offence and civil contravention. However, the same section of the Act provides exceptions to the prohibition in the case of joint ventures. To avail themselves of these, joint venture participants must be able to establish that: the cartel provision was for the purposes of the joint venture; the joint venture was for the production or supply of goods and services; and it is carried on jointly by the participants or by a relevant body corporate.

The prohibition on cartels and its qualification begs the question: Is it feasible to attempt to reconcile the contradictory tendencies towards competition and concentration in capitalism? Is it even reasonable to expect venture capitalists to open up their operations to new participants with the risk of diminution of their gains? Surely, the internal dynamism of capital – the imperative to maximise return – must imply that competitors be driven from the market or be pre-empted from entering it?

Can governments really be expected to contain and direct this tremendous energy? In the contest within capital between competing interests, who is the state to side with?

Joint ventures are examined in The Laws of Australia Subtitle 4.8 “Non-corporate Organisations”.