Chapter 15 - § 15.14 • ANTITRUST LAWS

• Jurisdiction: Colorado

§ 15.14 • ANTITRUST LAWS

Although there are limited exemptions from antitrust laws available to farmer or agricultural cooperatives,¹⁶⁰ in general cooperatives must be mindful of the restraints imposed on nearly all business enterprises by antitrust laws. The Co-op Act provides:

No cooperative formed under or subject to this article shall solely by its organization and existence be deemed to be a conspiracy or a combination in restraint of trade, an illegal monopoly, or an attempt to lessen competition or to fix prices arbitrarily, nor shall the marketing or purchasing contracts and agreements between any cooperative and its members or any agreements authorized in this article be considered illegal as such, in unlawful restraint of trade, or as part of a conspiracy or combination to accomplish an improper or illegal purpose.¹⁶¹

This provision is far from a complete exemption from Colorado antitrust and unfair business practices laws. It simply states that the mere existence of a cooperative or contracts between the cooperative and its members authorized by the Co-op Act will not in and of themselves constitute a viola27-36

tion of state antitrust laws.¹⁶²

It has been held that Congress has the power to grant privileges to farmer cooperatives while not providing the same types of privileges to other cooperatives.¹⁶³ Without specific legislative exemption, cooperatives must examine all aspects of antitrust laws to ensure that their operations comply with those laws. In fact, without a clear statutory exemption, a question can be raised as to whether the mere existence of a cooperative could be construed as a potential violation of antitrust laws.

It has been held under the Robinson-Patman Act¹⁶⁴ that a cooperative may not seek unlawful price discrimination (discounts) from a supplier by aggregating the purchases of its members.¹⁶⁵

Since the early 1900s, the U.S. Department of Justice and state antitrust regulators have not pursued cooperatives in any kind of concerted effort simply on the basis of their formation and existence. This may be because most cooperatives do not have sufficient economic clout to hinder or adversely influence the marketplace in a material way. There is no clear guidance of general applicability to non-agricultural cooperative organizations, but in recent years several cases have been brought under the Sherman Act involving agricultural cooperatives and they are listed in the footnote below.¹⁶⁶

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Notes:

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