On February 28, 2006, the U.S. Supreme Court issued an important decision for joint ventures and companies that form and invest in joint ventures. In Texaco Inc. v. Dagher et al./Shell Oil Company v. Dagher et al. the court unanimously held that it is not per se illegal under Section 1 of the Sherman Act for an economically integrated joint venture to set the prices at which it sells its products. By ruling that joint venture pricing decisions do not amount to price fixing in an antitrust sense, the court provided much needed certainty to the business community that legitimate joint venture activity will not be paralyzed by the specter of per se illegality.
Background
The case involved Equilon, a joint venture formed by Texaco and Shell. Through Equilon, Texaco and Shell consolidated their refining, marketing, wholesaling and retail operations in the United States. Among other things, Equilon was responsible for pricing the products it manufactured and owned—i.e., Shell and Texaco
