Marketplace agreements between competitors: commercial efficiencies and risks

In recent years, competition authorities have intensified their scrutiny of cooperation agreements in the digital sphere, particularly those linked to the creation and management of marketplaces. The European Commission, the Federal Trade Commission (FTC) and various Latin American agencies have identified a double potential in these initiatives: on the one hand, the generation of pro-competitive efficiencies; on the other hand, the possibility of leading to restrictive conducts that harm the competitive process.

A marketplace can be defined, in general terms, as a digital platform that allows multiple suppliers to market products or services through the same channel, constituting an intermediation space where supply and demand converge under common operating rules.

Commercial Advantages of Marketplace Agreements between Competitors.

The agreements entered into between competitors to jointly operate a marketplace have shown relevant economic and strategic benefits, among them:

• Expansion of market reach by concentrating diverse catalogues in a single channel.
• Reducing costs and generating efficiencies from the shared use of technology, logistics and payment infrastructure.
• Improved consumer experience and confidence, as consumers have access to a wider range of products and services in conditions of greater transactional security.
• Accelerating the digitisation of trade and strengthening competitiveness vis-à-vis large-scale global platforms.

These factors explain why marketplace agreements have become a central trend in global e-commerce.

Antitrust risks and the need for adequate controls.

Cooperation between competitors, however, poses potential competition law challenges. Among the most frequent risks are

• Undue exchange of sensitive information (prices, margins, costs or commercial strategies).
• Standardisation of commercial policies that reduce competitive diversity. (e.g. delivery fees, minimum purchase orders, etc.).
• Unjustified exclusivity limiting third party access to the digital channel.

In this context, marketplace agreements should be carefully structured to differentiate legitimate cooperation aimed at generating efficiencies from practices that may constitute collusion or abuse of position. Clear contractual rules that delimit the scope of the collaboration, establish confidentiality guidelines and regulate the treatment of sensitive data are indispensable.

In addition, operational rules should be established and enforced, in particular those that prevent members from accessing competitively sensitive information of other participants.

The Relevance of Internal Training.

Beyond the contractual design, the day-to-day management of the marketplace requires clear compliance guidelines for the staff involved. Antitrust compliance training helps to:

• Prevent conduct that could be construed as restrictive of competition.
• Ensure that interactions between competitors remain within legal limits.
• Demonstrate, in the face of possible investigations, the existence of a compliance-oriented organisational culture.

The importance of audits.

One of the hallmarks of an effective compliance programme is audits, which ensure the effectiveness of policies, controls and training. Audits also help to demonstrate to third parties, including competition authorities, that an organisation's compliance programme is robust and not just words on paper. Audits can be conducted in a variety of ways and should be tailored to the specific characteristics of each organisation.

Concluding remarks.

Marketplace agreements between competitors are a highly relevant strategic tool in the contemporary digital economy. However, increasing scrutiny by competition authorities requires that these instruments be designed and managed with transparent governance, clear rules and controls, trained staff and audits, so as to exploit economic and commercial efficiencies without incurring risks that neutralise their benefits.

Article written by Jose Sauro de Carvalho, partner at ECIJA Argentina with the collaboration of Sandford Pastroff, partner at Pastroff Law, Chicago, USA.