Tacit Agreement Antitrust
Summary: In cases where violations of Section 1 of the Sherman Act per se are alleged, one of the central issues is whether the defendants acted under an agreement and not independently or only interdependently. One of the main sources of uncertainty in these cases is the importance of a “tacit agreement”, a category that the Supreme Court has continued to include in Section 1 (most recently in Twombly), although it has insisted on the legality per se of “mere interdependence” or tacit agreements. In this article, I try to clarify the importance and practical importance of the tacit agreement category. After showing how Twombly and previous cases used this term, I try to explain its place in the hierarchy of means of coordination, leaving it in particular from simple interdependence on the one hand and explicit agreement on the other. Secondly, I argue for a definition of tacit agreement – interdependent behaviour coordinated by previous discussions that limit strategic uncertainty – and propose what types of communication correspond to this definition. I rely on this discussion to identify cases that illustrate tacit convergence and identify what I call paradigms and hybrid examples. Finally, I describe four categories of communications between rivals, depending on whether the communication is public or private and whether they relate to current or future behaviour. Both in dozens of cases per year where horizontal price agreements and other infringements per se are alleged against Section 1 of the Sherman Act, the central question is whether the defendants have already entered into an agreement. One of the sources of uncertainty in resolving this issue in litigation is the meaning of a “tacit agreement,” a term that the Supreme Court has continued to include in the scope of Section 1, although it has firmly ruled out “mere interdependence” or tacit collusion. In this article, I try to clarify the importance of tacit agreement and shed light on its practical importance in disputes.
Having examined how the Court of Justice used the term in Bell Atlantic Corp. to Twombly, I insert tacit coherence into the hierarchy of means of coordination and distinguish them in particular from mere interdependence, on the one hand, and explicit consent, on the other. Secondly, I advocate a definition of tacit agreement – interdependent conduct, coordinated by prior private communications of competitive intentions – and I wonder what forms of communication and conduct correspond to this definition. I argue that a tacit agreement, as defined, is more effective than mere interdependence as a means of coordinating non-competitive balances and that it is easier for the courts to punish or seize them without causing more harm than good. To show the analytical importance of the concept, I distinguish four categories of communications, depending on whether the communications are public or private, on the one hand, and whether, on the other hand, they concern current or future behavior. I then examine the cases concerning the four types of communication in order to deal with their relative importance for the identification and conclusion of a tacit agreement. In that regard, I consider the correct meaning and importance of `signage` as a communication capable of constituting or implementing an agreement. The definition clarified, which will be illustrative cases and the relevant categories of communications, I argue, helps the courts to determine, at each stage of the dispute, whether competitors have limited competition through an agreement. 48 pages Published: Apr 9, 2016 Last Revised: Apr 25 P.O. Box 117625Gainesville, FL 32611-7625 United States Microeconomics: Production, Market Structure and Pricing eJournal. Subscribe to this free journal for more articles on the subject. .
Implied Agreement pursuant to Section 1 of the Sherman Act William H. Page (University of Florida) University of Florida Levin College of Law Research Paper No. 16-45. . . .