Communications with Competitors

• Pages: 1-14

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CHAPTER I

COMMUNICATIONS WITH COMPETITORS

A. “We need to know more about our competition — how much

protection can we get by calling it ‘benchmarking’?”

Merely calling your activities “benchmarking” does not insulate

them from possible liability under the antitrust laws. Benchmarking is

the process of comparing the business practices of two or more

companies in order to improve the business practices of at least the

inquiring company. The antitrust risks associated with such efforts do

not turn on the label applied, but instead depend upon the type of

information gathered, the manner in which it is gathered, from whom it is

gathered, and with whom it is shared.

Benchmarking poses little or no risk if the other party is not a

competitor or if the information shared is publicly available. A

manufacturer of auto parts and a retailer of men’s clothing, for example,

might profitably benchmark warehousing systems without adversely

affecting competition. Similarly, benchmarking through publicly

available information should pose little antitrust risk because there is no

direct communication among competitors. For example, there should be

no antitrust concern in reviewing financial analyst reports that provide an

indication of a company’s manufacturing costs compared to others in the

industry.1

1 However, companies should be careful not to engage in indirect

communications with competitors through an intermediary such as a

financial analyst or a supplier. Such indirect communication plus parallel

actions might be viewed as evidence of collusion. See Interstate Circuit,

Inc. v. United States, 306 U.S. 208, 222 (1939).