Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Thursday, March 26, 2020

A Knowledge Theory of Tacit Agreement

Wentong Zheng, University of Floirda offers A Knowledge Theory of Tacit Agreement.

ABSTRACT: A persistent puzzle in antitrust law is whether and when an unlawful agreement could arise from conduct or verbalized communications that fall short of an explicit agreement. While courts have found such tacit agreements to exist in idiosyncratic scenarios, they have failed to articulate a clear and consistent logic for such findings. This Article attempts to fill this gap by proposing a unified theory of tacit agreement. It defines a tacit agreement as an agreement formed by non-explicit communications that enable the alleged coconspirators to have constructive knowledge of one another's conspiratory intent. This approach to tacit agreement is more faithful to the conceptual integrity and the statutory meaning of the agreement requirement under the Sherman Act. More importantly, it provides a flexible yet consistent formula for determining tacit agreements. This formula could be applied to any factual scenarios, including conscious parallelism, parallel conduct preceded by suggestive communications, hub-and-spoke conspiracy, and facilitating practices.

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