Collaboration in a supply chain has become a key competitive strategy for many shippers. But efforts to work closely with other businesses may overstep antitrust boundaries, warns a white paper on the topic.

That report, Antitrust and Collaborative Arrangements: A Primer, was prepared by lawyers from the Washington, D.C., law firm of Collier Shannon Scott PLLC for Nistevo, which operates an Internet-based collaborative logistics network. In the paper, the authors describe how three antitrust laws—the Sherman Act, the Clayton Act, and the Federal Trade Commission Act—govern interactions between competitors. They also outline how regulators judge whether collaborative efforts step into antitrust territory and offer guidelines on how to ensure that those efforts stay within legally defensible territory.

The writers—William C. MacLeod, Michael H. Knight, and Mary Jean Fell-Casler—say that supply chain management joint ventures carry less risk of antitrust scrutiny than some other types of collaborative efforts, but they warn that such risks do exist. To pass muster, they say, competing companies in supply chain joint ventures (and most collaborations are viewed as joint ventures for antitrust purposes) cannot share sensitive purchasing information. Companies that do not join the group should not be prevented from competing effectively, and members cannot exclude a particular organization. The participation of network members in upstream or downstream markets, moreover, may not have anti-competitive effects on those markets.

The authors offer suggestions on how to ensure that collaborative arrangements survive antitrust scrutiny. They urge members of any such agreement to compete aggressively with collaborators and non-collaborators alike. They also advise against engaging in collaborative activities that offer no countervailing competitive benefits—so called "per se" violations—such as agreeing with competitors on prices or competitive terms. In addition, they suggest that collaborators develop rules about membership and information sharing, and have those rules approved by antitrust counsel.

The full text of the report is available on Nistevo's Web site (www.nistevo.com).