Tacit Agreement Antitrust

Summary: In cases where violations of Section 1 of the Sherman Act are invoked, the priority is whether the defendants acted within an agreement and not independently or solely interdependently. An important source of uncertainty in these cases is the importance of the “tacit agreement,” a category that the Supreme Court (last in Twombly) continued to include in Section 1, although it insisted that “simple interdependence” or tacit collusion is legal in itself. In this article, I try to clarify the importance and practical importance of the category of the tacit agreement. Having shown how Twombly and previous cases have used this term, I try to explain its place in the hierarchy of means of coordination, notably by distinating it from simple interdependence on the one hand, and explicitly expressing its agreement, on the other. Secondly, I argue for a definition of the tacit agreement – interdependent behaviours, coordinated by prior discussions, which limit strategic uncertainty – and I propose what type of communication fits that definition. In this discussion, I rely on myself to identify cases that illustrate tacit concordance, identifying what I call paradigms and hybrid examples. In conclusion, I describe four categories of communication between competitors, depending on whether they are public or private communications and whether they relate to current or future behaviour. The central question is whether the defendants have already reached an agreement, both in dozens of cases each year where horizontal pricing is invoked and other offences per se in Section 1 of the Sherman Act. A source of uncertainty in resolving this problem in litigation is the importance of a “tacit agreement,” a term that the Supreme Court continued to enshrine in Section 1, although it expressly excluded “simple interdependence” or tacit collusion. In this article, I try to clarify the importance of a tacit agreement and to show its practical significance in litigation. After considering the use of the term Bell Atlantic Corp. in Bell Atlantic Corp.

v. Twombly, I see a tacit agreement in the hierarchy of means of coordination, distinguishing it in particular from simple interdependence, on the one hand, and explicit consent, on the other. Secondly, I argue for a definition of the tacit agreement – interdependent behaviour, coordinated by prior private communications of competition intentions – and I think of the forms of communication and behaviour that correspond to that definition. I argue that a tacit agreement so defined is more effective than mere interdependence as a means of coordinating uncompetitive balances and sanctioning or justifying more easily for the courts, without causing more harm than profit. To highlight the analytical importance of the concept, I distinguish four categories of communications that depend on whether the communications are public or private and whether they relate to current or future behaviours. I then insult the cases involving the four types of communication to show their relative importance in identifying and concluding the tacit agreement.