Sherman Act - Sharing of Information - Explained
When is Sharing Information Among Competitors Illegal?
Written by J. Mance Gordon
Updated at April 20th, 2024
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When is Sharing of Information Illegal Under the Sherman Act?
A horizontal restraint on trade is commonly understood to be illegal. Under the Sherman Act 1, sharing of information among competitors with the purpose of restraining trade (i.e., a naked restraint of trade) is per se illegal. So, the question of whether information sharing is illegal turns primarily upon whether there is some way the information sharing is or could be harmful to competition and restrain trade. If no, the practice is not a naked restraint and therefore not per se illegal. As such, a court will generally apply the rule of reason and look at the actual effect of the sharing activity.
What are the Factors for determining whether Sharing of Information is Illegal?
Factors used in determining whether information sharing is harmful may include the:
- Nature of the Information - Where the parties are sharing future, present, or past information?
- Actions taken by Either Party - Was there any enforcement of the sharing relationship by either party, monitoring of another party's activity, or coercive mechanisms involved with the sharing of information?
- Availability of Information - Was the information available to insiders, publicly available, or available at a reasonable cost?
- Market Structure - Is the market concentrated to the point that sharing between the parties looks like collusion?
If the pro-competitive justifications outweigh the anti-competitive aspects of the activity, it may not violate the Sherman Act.
Related Topics
- Antitrust Law (Intro)
- What is Antitrust Law?
- What are the Major Antitrust Laws?
- What government agency enforces antitrust law?
- What Sanctions are available under antitrust law?
- What is the Sherman Act of 1890 (Sherman Act)?
- What is a Contract, Combination, of Conspiracy in restraint of trade?
- What is Per Se Illegality and the Rule of Reason?
- What is a Monopoly?
- Herfindahl Hirschman Index (HHI) Definition
- What businesses are exempt from the Sherman Act?
- Horizontal Restraint Sherman Act?
- Sharing Information?
- Refusal to Deal?
- Territorial Agreement?
- Price Fixing?
- Resale restraint?
- Exclusive dealing?
- Tying products?
- Territorial agreements?
- What is Monopolization under the Sherman Act?
- What is the Clayton Act of 1914 (Clayton Act)?
- What is price discrimination under the Clayton Act?
- What are special arrangements prohibited under the Clayton Act?
- When are tying contracts an illegal restraint under the Clayton Act?
- When are reciprocal dealing contracts an illegal restraint under the Clayton Act?
- How does the Clayton Act regulate mergers and acquisition?
- FTC Act Antitrust Law