ABSTRACT
The term ‘information exchange’ describes the practice of firms gathering ‘marketsensitive’ information for use in reaching decisions on output or price. The practice is commonly found in price fixing or market-sharing cases among firms operating within the framework of trade associations or in cases involving product standardization. The use of trade associations as a vehicle for this behaviour has been attributed to Arthur Eddy’s book The New Competition (1912), written in response to the US Supreme Court decision in the Standard Oil case of 1911. The underlying theme of the book is that cooperation between competitors tends to yield better results than competition.1 The gist here is similar to that we encountered in discussing permissible horizontal cooperation arrangements, with the implication that determining the validity of information sharing arrangements should not be too dissimilar a process to that involved in assessing other types of collaborative arrangements between rivals – that is, assessing whether the benefits to be derived from the arrangement significantly outweigh its anticompetitive effects.
