The treatment of exchanges of competitively sensitive information among competitors represents a new frontier in antitrust enforcement because the law in the United States differs from that in the European Union and some other countries. Information exchanges may sometimes take place without any other unlawful conduct such as price fixing, and can take place directly through meetings, emails or phone calls among competitors, or indirectly through an industry association or a market intelligence firm.

There is little consistency in how antitrust enforcers in different countries approach information exchange issues. In the United States, in the absence of any other evidence of a price-fixing agreement, exchanges of competitively sensitive information are typically evaluated under the rule of reason. However, several other jurisdictions consider information exchanges to be hardcore antitrust violations. Further, in the United States, the European Union and other jurisdictions, information exchanges may lead to government investigations and an avalanche of civil lawsuits with substantial damages exposure.

Both antitrust advisers and enforcers may find it challenging to know where to draw the line because information exchange cases are murkier than 'smoke-filled room' cases.

Rule of reason

Information exchanges are not presumptively illegal under US law unless they are part of an agreement to fix prices or some other per se illegal agreement. The rule of reason is the standard mode of analysis in the United States, but a "quick look" may be used in cases involving a practice that is facially anti-competitive – in the words of the Supreme Court in California Dental, where the likelihood of anti-competitive effects is "obvious" to an observer "with even a rudimentary understanding of economics". The per se rule in the United States is limited to cases involving agreements that are so plainly anti-competitive and so unlikely to have any redeeming virtues that no analysis is required to establish illegality, such as price fixing, bid rigging or market allocation. Most cases involving the exchange of information among competitors have been evaluated under the rule of reason. In some cases, especially when coupled with other evidence such as meetings or other communications among competitors, exchanges of information have been held to constitute civil violations of Section 1 of the Sherman Act, but they are rarely prosecuted criminally as cartel behaviour in the absence of other conduct more consistent with a cartel. Some other countries, such as Canada, follow the US approach.

In the United States, the greatest threat to companies involved in information exchanges is likely to involve potential civil liability. Because of joint and several liability and the prospect of class actions, the potential civil liabilities to private plaintiffs may be high, even if the price effects on any particular product are relatively small.

Compliance issues

Information exchanges warrant special caution by antitrust advisers. Even antitrust-savvy business executives may not be aware of the possible risks of information exchanges, especially when the sharing of information happens through benchmarking against rivals or through a third party (eg, an industry association or a market research organisation). Many companies require that the general counsel's office be consulted about competitor communications, but information exchanges through third parties may fly under the radar. For all these reasons, such conduct is hard for antitrust counsel to detect and advise on. There is no one-size-fits-all set of compliance guidelines, other than that counsel must stay close to the business and tailor compliance training to the specific issues of the company and the industry in which it operates. Both companies and enforcers must pay special attention to information exchanges and consider a global perspective.

For further information on this topic please contact Janet McDavid at Hogan Lovells US LLP's Washington DC office by telephone (+1 202 637 5600) or email ( Alternatively, contact Gianni De Stefano at Hogan Lovells International LLP's Brussels office by telephone (+32 2 205 0911) or email ( The Hogan Lovells website can be accessed at

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