Global/International Joint Purchasing Arrangements

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A Primer on the Law of Joint Purchasing

tive could have significant economic conse-

quences for the excluded firm and thus cre-

ate a risk of antitrust litigation. Antitrust

concern might be significant if (i) the fran-

chisee was excluded for an anticompetitive

reason—for example, to punish the franchi-

see for price discounting, and (ii) the excluded

franchisee was unable to join another buy-

ing group focusing on the needs of the par-

ticular system’s franchisees. To avoid

antitrust risks, a buying cooperative for fran-

chisees in a particular system should gener-

ally have an open door to all system

franchisees—particularly if the cooperative

is the only buying group serving the system’s

franchisees. Here, as elsewhere, experienced

counsel should be consulted before any ac-

tion is taken to exclude or expel a member.

V.Global/International Joint Purchasing

Arrangements

A. U.S. Antitrust Law Applies to Buying Ar-

rangements Affecting U.S. Commerce. The an-

titrust laws of the United States will apply to

joint purchasing arrangements operating outside

of the United States, or to individual participants

residing outside the United States, if an arrange-

ment has a “direct, substantial, and reasonably

foreseeable” effect on United States commerce.

The requisite “effect” must be of the type likely

to result from anticompetitive conduct prohib-

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