Overview: How Antitrust Law Applies to Group Buying Arrangements

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A Primer on the Law of Joint Purchasing

DOJ “Business Review” programs, which have

been utilized for a significant number of pro-

posed buying groups. Companies planning cer-

tain future activity can describe their plans in

a letter to either agency, submit to a limited

investigation, and receive a written statement

of that agency’s enforcement intentions. A fa-

vorable letter from the FTC or DOJ, although

not binding upon the courts, nor even techni-

cally binding upon the issuing agency, can pro-

vide considerable practical comfort. While delay

and other factors make this procedure not suit-

able in a variety of circumstances—the vast

majority of buying groups may not present the

sort of novel or difficult issues that merit the

time and expense of voluntary submission for

government review—this is one of the many

items that should be discussed with your anti-

trust counsel when planning a buying group.

II. Overview: How the Law Applies to

Group Buying Arrangements

Buying groups can take various forms, rang-

ing from simple, naked agreements among pur-

chasers to fix prices offered to sellers, to full

joint ventures involving creation of new stand-

alone entities complete with formal by-laws,

separate employees, and performance of func-

tions such as accounting, warehousing, and dis-

tribution, in addition to purchasing. The

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