New Tariffs, Old Risks: Antitrust Considerations

With regulatory scrutiny by governments on the rise, this LawFlash summarizes key antitrust issues for companies in all industries affected by tariffs. 

CARTELS AMID ECONOMIC SHOCKS

History shows that cartels tend to form in times of rapid economic change. Businesses are forced to respond to market shocks that they did not anticipate. This often happens during (or shortly after) a crisis (e.g., transportation, banking, and COVID-19)[1] or even when new regulations come into force. Tariffs and the ongoing uncertainty around global trade and supply lines could have the same effect.[2] Businesses within the same sector can feel united by a common threat to their profitability and be tempted to act together.[3] Cartels are an illegal shock absorber, which can attract very high fines and potential criminal sanctions in some jurisdictions.

Competition authorities are now particularly focused on price signaling and concerted responses to industry crises, and that focus could intensify in the coming months.

TARIFFS ARE GIVING RISE TO INCREASED REGULATORY SCRUTINY

The US government is closely monitoring the impact of new tariffs on competition and mergers, and competition regulators have certainly not eased any antitrust rules or the enforcement of these rules in the current climate. US Department of Justice (DOJ) and Federal Trade Commission (FTC) officials have warned businesses not to exploit tariffs to increase prices or engage in anticompetitive behavior. In early April 2025, FTC Chair Andrew Ferguson emphasized that the FTC would monitor pricing behaviors to prevent unlawful behavior.

OVERVIEW OF TARIFF AND ANTITRUST CONSIDERATIONS

Tariffs or even the threat of tariffs can distort competition in ways that raise antitrust considerations. Below are a few key issues that firms across industries impacted by tariffs should keep in mind.

Information Sharing

• Issue: Firms may want to share information about how they are sourcing inputs for their business, terms used with suppliers, best practices, how they are handling employee compensation or benefits, and/or benchmark various metrics, possibly with the use of artificial intelligence.
• Antitrust Consideration: There is an inherent risk that information exchanges among competitors, if not carefully limited, can be construed as an unlawful agreement to restrict trade, such as agreements to boycott a supplier; an agreement as to pricing or other terms on which a group of buyers will deal with a supplier; allocation of markets, customers, or suppliers; or an agreement to suppress wages or other benefits.

Joint Ventures

• Issue: Firms may want to form joint ventures for purposes of sourcing or selling materials to leverage a larger market position.
• Antitrust Consideration: While joint ventures can be permissible under federal antitrust law, they must be structured in a way to minimize the risk that the joint venture is misused (or misconstrued) as an arrangement to fix prices or undertake some other activity prohibited by the antitrust laws.

Exclusivity

• Issue: A firm may find a reliable supplier who is subject to a lower tariff and want to limit the ability of competitors to access the same supplier. The firm proposes contractual exclusivity to the supplier.
• Antitrust Consideration: Contractual exclusivity can raise antitrust concerns if other firms are substantially foreclosed from competing due to the inability to access a necessary input. There are a number of considerations when entering into such agreements, including whether the agreement is limited in duration and tied to a legitimate supply need.

Bundling/Discounting

• Issue: A firm may condition access to one product or service on the purchase of another or condition the availability of discounts on the purchase of groups of products or services.
• Antitrust Consideration: These types of arrangements could amount to unlawful tying, where a supplier uses a dominant market position to economically coerce buyers into purchasing another product or service

Below-Cost Pricing

• Issue: A firm that is less impacted by short-term increases in costs than its weaker competitors may see an opportunity to temporarily lower its price below its cost to force its rivals out of business only to raise prices when those rivals leave the marketplace.
• Antitrust Consideration: Pricing below a measure of cost could be a form of predatory pricing prohibited under the antitrust or unfair competition laws of many jurisdictions.

Government Petitioning

• Issue: A firm or group of firms may wish to influence the US executive branch to erect (or eliminate) certain barriers to trade, or to tie up a certain industry or market participant in regulatory uncertainty.
• Antitrust Consideration: While government petitioning is generally immune conduct under the US antitrust laws, petitions that are a sham intended to abuse the government process to disadvantage a competitor can be actionable

Robinson-Patman Act

• Issue: A seller may want to offer different promotional allowances to competing buyers or provide preferential advertising or promotional services in connection with the resale of the seller’s product.
• Antitrust Consideration: The US Robinson-Patman Act is a New Deal Era price discrimination statute that has been used against sellers that use discounts and other commercial terms to advantage certain customers and that run afoul of the statute’s technical and arcane rules.

Key Reminders

• Information exchanges within the industry should be undertaken with great care.
• Antitrust law does not impose a duty to deal with competitors or any counterparty absent unusual circumstances, such as an abrupt change in past practice.
• A variety of actors may enforce the antitrust laws, including government authorities (which in the United States includes federal agencies and state attorneys general), market participants, and customers.
• Adequate training and compliance programs are essential. Now is a good time to refresh antitrust training programs and ensure adequate compliance controls are in place.

As economic conditions evolve, with tariffs and market disruptions, companies must remain vigilant. Tariffs may temporarily change competitive dynamics, but they do not grant immunity from antitrust laws, and the competition authorities have been clear that they are monitoring industry reactions.

THE IMPORTANCE OF AN EFFECTIVE ANTITRUST CORPORATE COMPLIANCE PROGRAM

In light of the risks and pressures of a turbulent economy, companies should reexamine their antitrust compliance programs. In the United States, for example, the DOJ Antitrust Division’s guidelines for the Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (AT ECCP) provides guideposts that can impact DOJ’s decision to prosecute or resolve antitrust investigations. In evaluating the design and efficacy of antitrust compliance programs, DOJ considers the following elements:

• Design and comprehensiveness of the program
• Culture of compliance within the company
• Responsibility for and resources dedicated to antitrust compliance
• Antitrust risk assessment techniques
• Compliance training and communication to employees
• Monitoring and auditing techniques, including continued review, evaluation, and revision of the antitrust compliance program
• Reporting mechanisms
• Compliance incentives and discipline
• Remediation methods

As we set forth into uncharted economic waters, companies are well advised to review their corporate compliance programs with experienced antitrust and compliance counsel to ensure that those programs are effective and well designed in the eyes of antitrust enforcers.