A notice on horizontal cooperation agreements has been issued by the Federal Trade Commission (FTC) to provide guidance on how businesses should approach such agreements in a way that does not violate antitrust laws.
Horizontal cooperation agreements refer to agreements made between businesses that operate at the same level of the supply chain and are therefore considered horizontal competitors. These agreements can provide benefits such as increased efficiency and improved services, but they can also lead to anticompetitive behavior if they involve price-fixing, market allocation, or output restrictions.
To avoid violating antitrust laws, businesses should ensure that their horizontal cooperation agreements adhere to certain guidelines. These guidelines include:
1. Not engaging in price-fixing. This means that businesses should not agree to set prices for their goods or services, or to coordinate pricing strategies.
2. Not dividing up markets. Businesses should not agree to divide up markets among themselves, such as by agreeing to only sell in certain geographic areas.
3. Not limiting output. Businesses should not agree to limit their production or output, as this can lead to higher prices for consumers.
4. Ensuring that the agreement is necessary. Businesses should only enter into horizontal cooperation agreements if they are necessary to achieve a legitimate business objective, such as improving efficiency or reducing costs.
5. Avoiding exclusivity clauses. Businesses should avoid including clauses in their agreements that require exclusivity, as this can limit competition and harm consumers.
By following these guidelines, businesses can ensure that their horizontal cooperation agreements do not violate antitrust laws. Additionally, businesses should consult with legal counsel to ensure that their agreements comply with all applicable laws and regulations.
In conclusion, while horizontal cooperation agreements can provide benefits for businesses, it is important to approach them with caution and ensure that they do not violate antitrust laws. By adhering to the guidelines outlined by the FTC, businesses can engage in horizontal cooperation agreements in a way that benefits both themselves and consumers.