1. Does this case mean that competitors may simply create a joint venture to avoid any liability for price-fixing?
2. Why did the retailers allege that forming this joint venture was anticompetitive behavior?
Texaco and Shell formed a joint venture, Equilon, to consolidate their operations in the western U.S., whereby they agreed to share expenses and profits from the jointly controlled new entity. Although Equilon engaged in the refinement of crude oil into gasoline, the actual end product was sold to retailers under the brand names of Texaco and Shell at a mutually agreed upon price. The retailers of Texaco and Shell products brought a class action lawsuit against Texaco and Shell, alleging that creating the joint venture was a per se violation of the Sherman Act because it amounted to a horizontal price-fixing scheme.