Antitrust Issues Teaming Agreements

State contractors and other companies in this area should be aware of the particular risks and challenges associated with the cartel and abuse of dominance rules they face when considering acquisitions or other business practices. Companies should be advised on activities that may pose a high risk to cartels and abuse of dominance, including reviewing a merger or acquisition, forming an association agreement, or reviewing an agreement that may limit the hiring or compensation of staff. As noted above, prudent compliance efforts can reduce the risk of an investigation or action to implement cartel rules and potentially costly and cumbersome abuse of dominance. Finally, antitrust authorities have recently tightened their control over personnel and personnel issues, particularly in sectors with a limited number of skilled workers. While some restrictions on hiring or hiring employees are likely to be acceptable – z.B. the imposition of appropriate restrictions on a company that does due diligence to acquire another business, or as part of a legitimate joint venture or team agreement – “naked” agreements between companies that do not compete for employees are a violation of antitrust law. This newsletter identifies when “team agreements” between contractors are likely to raise issues of agreement and abuse of dominance and offers some practical advice for evaluating or defending these agreements. Another aspect of competition in the area of public procurement, which often raises issues of cartels and abuse of dominance, is the use of cooperation between competitors and team agreements. Both DOD and antitrust authorities have recognized the pro-competitive value of association agreements and have provided specific guidelines for evaluating these agreements13 The DCAA Memorandum, which also implements Gansler`s memorandum, stresses that the mere existence of an exclusive association agreement does not only create anti-competitive activities. In accordance with Gansler`s memorandum, an exclusive association agreement is considered anti-competitive and may only violate the rules of cartels and abuse of dominance if a team member is “the sole supplier of a product or service essential to the performance of the contract” and the government`s efforts to eliminate the exclusive team agreement are in vain.

The latter implements the former and instructs DCAA auditors to take actions when identifying anti-competitive team agreements. However, this guide and case law also identify any anti-competitive harms that may result from these agreements. Team agreements may be subject to increased state control if they remove a potential competitor from the tendering process, increase the ability or incentive of other contracting parties to increase prices or reduce production, or facilitate agreements between team members that might otherwise be competitors.14 This type of agreement can be particularly risky in the defence industry or in other segments where there are few viable competitors.14 This type of agreements can be particularly risky in the defence industry or in other segments where there are few viable competitors. for certain types of businesses or contracts.

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