As corporations continue to prioritize environmental, social, and governance (ESG) improvements alongside profit, cooperation with competitors may be an important part of their toolbox. In particular, cooperation can help to advance initiatives like the elimination of an unsustainable product type, which is a drastic step a corporation likely would not take on its own for fear of hurting its bottom line and customer loyalty. The issue is that agreements among competitors to engage in such steps may violate antitrust laws, as suggested by the Justice Department in the Trump administration and numerous state attorneys general.
This Comment uses the term “green product fixing” to refer to the practice of a business entering into agreements with its competitors regarding environmentally-focused product standards and identifies two principal reasons why antitrust law may spell trouble for green product fixing. First, antitrust case law is clear that self-regulation in the form of extra-governmental product standards and codes of conduct is a violation of the Sherman Antitrust Act. Second, while the law does have some room to permit agreements that would otherwise be unlawful, based on certain offsetting procompetitive benefits, factors like a reduction in carbon emissions or pollution would not be considered as procompetitive benefits under the current application of United States antitrust law.
This Comment argues that a different type of analysis from that traditionally used in antitrust law is necessary with respect to green product fixing. The traditional analysis focuses on consumer welfare but does not capture the benefit to consumers, as members of society, from the reduction in negative externalities resulting from a cooperation agreement. This Comment proposes balancing the traditional analysis with consideration of environmental benefits that trickle down to consumers. It also evaluates potential avenues for legislative and judicial implementation of such an analysis.
The Case for Green Product Fixing: Reconciling Antitrust Law with Self-Regulation to Combat Climate Change,
Emory L. J.
Available at: https://scholarlycommons.law.emory.edu/elj/vol73/iss1/5