How to Spot Antitrust Risk in Your Commercial Contracts

Start by asking whether your counterparty is a competitor. Most antitrust risk turns on that single question, so we run it before anything else. When the other side is a true competitor and the clause touches price, territory, or a swap of sensitive information, we slow down and look harder. When they sit somewhere else in the vertical chain, the risk drops a lot. That one diagnostic gets us most of the way to knowing whether we have a problem.

Remember that the contract is usually the symptom, not the cause. By the time a deal hits antitrust trouble, the real issue often started long before drafting. It lives in who the counterparty was, a side conversation outside the four corners, or a market that grew up around a provision nobody revisited. That is why we stay close to the business teams and pull on the thread when something sounds off. The earlier we catch it, the more room we have to fix it.

Treat per se violations as bright lines you do not cross. Price fixing, bid rigging, and dividing customers or territories with a direct competitor are automatically illegal, with no business justification available. These are the agreements that send people to jail, not just companies to settlement. So when a clause starts to look like a naked agreement not to compete, we stop and call someone with real antitrust depth. There is no clever drafting that rescues a per se violation.

Watch the conversations that happen around the contract, not just the document. A clean NDA still does not stop two competitors from swapping pricing or product plans in the room next door. The paper can be perfect while the conduct creates the exposure. We get legal involved early enough to shape how the business actually talks to a competitor, not just how the agreement reads. Improper information exchange is one of the easiest traps to walk into without noticing.

Handle resale price maintenance with extra caution. Telling a distributor exactly what to charge is legal under federal law now, but a handful of states such as California, Maryland, and New Jersey still treat it as per se illegal, and the EU and UK ban it outright. For most clients we keep it out of distribution agreements rather than manage it state by state. When a client needs price discipline, a unilateral policy the seller adopts on its own paper is the safer route. Document the real reason, usually preventing free riding, not just a wish to keep prices up.

Size exclusivity, tying, and bundling to your market power. These provisions are low risk when your share is modest and start to bite once you become a market leader. A rough alarm goes off somewhere above thirty to thirty-five percent share, and foreclosing a large slice of a distribution channel raises the stakes further. We pull the levers that make these arrangements safer, shorter duration, narrower scope, and easy termination rights. The narrower the restriction, the better it holds up.

Manage exclusivity as a living provision, not a set it and forget it term. A clause that was fine at fifteen percent share can come back to bite you at fifty. Companies grow, people leave, and the rationale that made a provision safe stops getting documented. So we either future-proof the drafting for where the business is heading or build in a real review every year or two. Someone has to keep checking whether the market changed underneath the contract.

Separate your restrictive covenants and tailor each one. Customer non-solicits, confidentiality protections, and employee no-poach terms carry very different antitrust profiles, so we draft them as distinct provisions instead of one lump. Protecting customers and confidential information is usually low risk with an obvious justification. A naked agreement between competitors not to hire each other's people is a different animal, and the DOJ has now won a criminal case on exactly that. When a no-hire term is genuinely tied to a real deal, we keep it narrow in scope and proportionate in time.

Build the record that explains why a clause exists. Agencies find contemporaneous business reasons persuasive, so the time to capture them is while the deal is happening, not after a concern surfaces. Most companies have legitimate reasons for the restrictions they want, and the gap is usually just papering them up. We ask the business to say, in writing, what pro-competitive goal a restraint serves. That record is some of the best protection we can give a client.

Lean on compliance to turn a bad moment into a survivable one. A real compliance program does not erase a violation, but the DOJ treats an active, trained, and followed program as a reason to see a problem as one rogue employee rather than a company strategy. The current expectation runs deeper than a binder on a shelf. The DOJ wants a culture of compliance that everyone models, from the chief executive down, including in the everyday Slack and text messages. When we invest there before anything goes wrong, we give ourselves real leverage if it does.