ANTITRUST REGULATORS POISED TO POUNCE ON INDUSTRYWIDE ESG COLLABORATIONS
November 20, 2023
Antitrust attorneys are concerned with collaborations related to environmental, social and governance (ESG) issues that may lead to antitrust violations. ESG refers to a set of standards that investors weigh to determine whether a company has controls in place to protect the environment and promote socially conscious relationships with its employees, suppliers, customers, and stakeholders. ESG collaborations occur when different companies within the same industry come together to share and develop ESG related initiatives. Federal and state regulators are stepping up scrutiny over whether ESG collaborations constitute collusion and thus potentially violate antitrust laws. The Department of Justice (DOJ) and the Federal Trade Commission (FTC) have changed draft merger guidelines which may have the impact of classifying more companies as having dominant market positions, a determination that carries consequences beyond M&A. Companies must be weary of collaboration that exceeds what is permissible. Companies that want to maintain their ESG collaborations can take steps to reduce the risks by thoroughly document the procompetitive benefits for engaging in ESG initiatives that involve information-sharing. Moreover, companies should make sure that ESG meetings with competitors are highly structured and documented. Such meetings should have a written agenda and not include “side meetings.” Ideally, the meetings should include an antitrust compliance statement and be held with an antitrust lawyer present.
If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com; Jay Julien at 202.659.6648 or jjulien@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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