Antitrust and information exchange: navigating without a safe harbour

August 2025  |  SPECIAL REPORT: COMPETITION & ANTITRUST

Financier Worldwide Magazine

August 2025 Issue

Most US business executives today are broadly familiar with the antitrust laws and know that agreements with competitors that dull competition can carry risk. But what many may not know is that companies can also risk antitrust accusations by receiving market data from a third-party information service.

Benchmarking is a hot-button and rapidly developing area of antitrust law. The practice is not new. Companies in certain industries have long shared information with each other, whether directly or through third-party intermediaries. The potential for antitrust liability arising from these practices is also not new. There is Supreme Court precedent dating back to 1921 holding that certain information sharing between competitors can violate the antitrust laws.

The law also has long recognised that information sharing between competitors can be procompetitive. When competitors can assess how their own performance compares to that of others in a given industry, they can identify areas where they are lagging and implement that feedback to reduce their costs, invest in operational improvements, and ultimately reduce their prices. Recognising benchmarking’s procompetitive potential, the Supreme Court decided decades ago that it was inappropriate to apply an overly strict liability standard to information sharing. If businesses stopped benchmarking altogether, the Supreme Court reasoned, competition in industries served by benchmarking could suffer.

Cases challenging information sharing among competitors most typically have involved the exchange of current and detailed pricing information that complainants argue goes beyond what is needed to promote procompetitive benchmarking. While there are no bright-line rules, exchanges of current or forward-looking prices for particular transactions have often triggered antitrust scrutiny, whereas exchanges of historic data that are anonymised and averaged across transactions have been preferred.

Antitrust accusations typically try to fit practices into a few buckets. The exchange (generally combined with other evidence of collusion) could be found to reflect a price-fixing agreement among the competitors. Even if not necessarily proof of price fixing, information exchange can violate antitrust laws if the effect of the exchange is to harm competition in the industry, such as by driving up prices.

So what has changed? First, technology. Modern service providers can collect, aggregate and analyse massive amounts of competitor data in real time. Enforcers have argued the output from those services is more informative – and potentially more concerning – than the typical benchmarking reports of the past.

Second, enforcement. In recent years, the Department of Justice’s (DOJ’s) Antitrust Division has communicated an aggressive new approach in the information-sharing arena. In 2023, the DOJ withdrew information-sharing guidelines that had been in force since 1993. Under the old guidelines, companies could operate within clear guardrails to avoid antitrust risk associated with benchmarking by sharing aggregated, anonymised and historic information through a third party. Citing technological developments, including the rise of machine learning and algorithms, the DOJ now says those old rules may be too permissive. Notably, the DOJ has not issued new guidelines, meaning there are no longer any clear rules of the road.

In the absence of guidelines, a developing body of antitrust case law will dictate when information sharing between competitors is anticompetitive. Both regulators and class action attorneys appear to be seizing on this opportunity to ask courts to declare increasingly broad swathes of benchmarking activity as unlawful. Enforcers have brought lawsuits against both the purveyors and users of information-sharing services in industries ranging from hotels to chicken.

Unsurprisingly, lawsuits have taken aim at revenue management software and pricing algorithms alleged to use real-time data to generate specific pricing recommendations. But they have not stopped there. Instead, some lawsuits are now targeting traditional benchmarking reports, even where they involve only historic, aggregated and anonymised data, the exchange of which has typically been considered benign (or even procompetitive). Some suits have also challenged employers’ exchange of wage, salary or benefit information.

Enforcers have tried to develop a stricter body of law on information sharing in a few different ways. For starters, they have tried to lower the bar for what they must prove. The DOJ has argued, for example, that courts should not require any proof of coordination – or any interaction whatsoever – among the users of an information-sharing service to infer an agreement among the users. To date, at least one federal district court has allowed this theory to proceed past a motion to dismiss, albeit in the context of software alleged to ingest data from competing companies to generate pricing recommendations. That court reasoned that where each company grants a third-party service access to confidential business information to feed a pricing algorithm knowing its competitors are doing the same, that simple fact may serve as proof of an illegal ‘agreement’ between users. Of course, no plaintiff has yet managed to develop the requisite evidence to actually prove – or even to survive summary judgment on – such a theory.

To capitalise on early success in one lawsuit targeting pricing algorithms, claimants have also attempted to blur the line between algorithms and run-of-the-mill benchmarking. For example, some have claimed ad hoc discussions between a benchmarking provider and its users are somehow akin to real-time and artificial intelligence-generated price recommendations. To what extent courts will give credence to these false equivalencies remains an open question.

To build their cases, plaintiffs often look to public-facing marketing statements made by the companies that offer benchmarking services and investor calls by the users of those services. Plaintiffs have particularly focused on advertising insinuating that benchmarking services can help users achieve higher prices. Statements like that feature prominently in civil complaints, and although many such suits have been dismissed, such statements are cited by plaintiffs to urge courts to let their cases move forward to costly discovery. As an example, plaintiffs brought a civil suit against Yardi, a company that offers revenue management software that employed a pricing algorithm to recommend rental prices to landlords. In both their complaint and successful briefing in opposition to a motion to dismiss, the plaintiffs emphasised that Yardi publicly touted in its marketing materials that its software, ‘RENTmaximizer’, was responsible for driving large increases in apartment rents.

The antitrust legality of Yardi and other information services remains to be determined by the courts. But the fact that some courts have already ruled that these new theories are credible enough to proceed to discovery is significant in its own right. Discovery in antitrust cases can be exceptionally broad. It is not uncommon for defendants to have to produce emails and text messages from dozens of executives, and to subject multiple employees ranging from salespeople to C-suite executives to depositions.

The level of risk associated with information sharing, particularly when done through a reputable trade association or commercially available software, surprises many business people. It is relatively intuitive that a furtive pricing discussion between competitors in the proverbial smoke-filled room carries antitrust risk. The notion that you could subject your company to legal risk by signing up for an information service offered by a sophisticated software company is much less obvious. But as strange and unfair as this new reality may seem, it is high time businesses recognise the potential risks certain services pose.

Importantly, while services that provide competitors with revenue management and pricing recommendations face the most intense scrutiny, even ordinary benchmarking efforts – particularly when data are current or forward-looking and lack anonymisation – are not beyond attack. Perhaps the best example of this reality: the hotel benchmarking reports that have been offered by Smith Travel Research for 35 years became the subject of a class action lawsuit in October 2024.

So what does this all mean? In this climate, companies need to be thinking very carefully about which revenue management and benchmarking tools they use and how they use them. It is essential to vet new tools and services with antitrust counsel before signing up. Depending on, for instance, who uses the service, the data that feed into it, and what the tool reports out, including whether the tool provides a pricing recommendation, the potential antitrust risk can vary significantly. Investing in this review on the front end has enormous potential to mitigate antitrust risk. Even if counsel determines that a particular service is low-risk, they can provide valuable insights on safeguards to employ to ensure the tool is not misused or misdescribed in ways that could invite unwarranted antitrust scrutiny.

The new and heightened focus on information sharing also means companies should be taking stock of the services they already use – even those that have been in use for years. Capable counsel can lead companywide audits to gather key information and to advise on what steps can be taken to reduce antitrust risk.

There can be no doubt that companies have a variety of legitimate business reasons for benchmarking and litigation risk should not chill such activity. That said, with potential for costly litigation on the line, proactive risk mitigation is undoubtedly the best course.

 

James Attridge is a partner and Lindsey Strang Aberg is a counsel at Axinn, Veltrop & Harkrider LLP. Mr Attridge can be contacted on +1 (202) 721 5404 or by email: jattridge@axinn.com. Ms Aberg can be contacted on +1 (202) 469 3550 or by email: lstrang@axinn.com.

© Financier Worldwide

BY

James Attridge and Lindsey Strang Aberg

Axinn, Veltrop & Harkrider LLP

©2001-2025 Financier Worldwide Ltd. All rights reserved. Any statements expressed on this website are understood to be general opinions and should not be relied upon as legal, financial or any other form of professional advice. Opinions expressed do not necessarily represent the views of the authors’ current or previous employers, or clients. The publisher, authors and authors' firms are not responsible for any loss third parties may suffer in connection with information or materials presented on this website, or use of any such information or materials by any third parties.