Tuesday, March 29, 2016

Antitrust and Socially Responsible Collaboration: A Chilling Combination?

Inara Scott, Oregon State asks Antitrust and Socially Responsible Collaboration: A Chilling Combination?

ABSTRACT: A review of recent literature in the field of sustainable and socially responsible business practices reveals that companies are increasingly considering collaboration as a means of solving intractable global problems. Business entities concerned about human rights and labor practices are collaborating with other businesses, government agencies, and nongovernmental organizations (NGOs) on certifications and standards at shared factories and facilities. To save costs and reduce environmental impacts, the most ardent of competitors have agreed to share facilities and other assets, like less than full delivery trucks, as well as engage in joint research and development. Competitors in resource-intensive commodity markets, including those in the coffee and lumber industries, have collaborated on environmental certification standards for production and even have engaged in harvest share agreements to reduce overharvest and waste.

Section 1 of the Sherman Antitrust Act broadly prohibits “[e]very contract, combination … or conspiracy, in restraint of trade or commerce,” leaving all of these collaborations potentially vulnerable to challenge. However, the very breadth of this century-old statutory language has forced courts to engage in an evolving analysis of what behavior should and should not be prohibited. Seemingly unambiguous language prohibiting agreements among competitors may, in fact, not stand as a barrier to certain types of arrangements. The purpose of this article is to determine the outer limits courts have placed upon such agreements and to assess the potentially chilling effect of antitrust law on socially responsible collaboration. Based on this analysis, this article seeks to determine if statutory changes are needed to allow for the type of socially responsible collaboration in which businesses are seeking to engage in order to have the greatest potential impact on environmental, human rights, and sustainability challenges.

Part I of this article sets forth the economic and business justifications for collaborating across businesses, including those between and among competitors, and provides examples of key types of these collaborations. Part II considers the application of antitrust laws and examines the struggle to determine to what extent courts may find these collaborative practices acceptable. Based on this analysis, Part III then examines the chilling effect of antitrust law on socially responsible collaborations and considers changes necessary to facilitate these types of transactions. This article concludes with an examination of some of the basic policy assumptions that underlie antitrust law and a recommendation for the evolution of these assumptions in the face of increasing resource scarcity, global environmental degradation, and climate change.


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