Information Exchange Between Competitors — A Competition Law Perspective

7 min read

There is no doubt that "information" is a valuable asset in today's economy and companies must be "well informed" in order to remain competitive. The exchange of information between companies is therefore a commercial reality and a common feature of competitive markets.

It is also widely accepted by both economists and competition law practitioners that information exchanges may have positive effects on competition through the generation of certain gains in efficiency, with a direct benefit to consumers. On the other hand, sharing too much information may lead to restrictive effects on competition and therefore create exposure to the risk of significant penalties through breaches of competition law. It is therefore essential for companies to understand the fine line between pro-competitive and anticompetitive exchanges of information.

This article aims to provide a brief overview of information exchange from a competition law perspective and guidance for companies in managing competition law related risks arising from external communications.

There are various ways for companies to exchange information: they may choose to communicate directly or they may exchange information indirectly through third parties such as professional associations and market research institutions, through a common distributor or supplier, or through public disclosures. Regardless of how information is exchanged, a competition law risk is consistently present if through information received or delivered companies possess knowledge regarding competitors' market strategies, as this may lead to coordination and collusive behavior.

Responding to a seemingly innocent information request from an industry association; a newspaper article involving a statement by a company executive regarding expected price increases in the market; a benchmarking exercise by a market research company involving detailed, individualized and up-to-date market data or information shared by a common distributor regarding a competitor's future price increases may create competition law risks for a company. Accordingly, any information inflow to and outflow from companies should be managed with utmost care.

The Turkish Competition Board (the "Board") published the "Guidelines on Horizontal Cooperation Agreements" in 2013 (the "Guidelines"), which is very similar in content to the European Commission's Guidelines on the same topic. Paragraphs 40 to 90 of the Guidelines specifically cover the competitive assessment of information exchange among competitors.


What is your Intent?

The Guidelines make clear that any information exchange with the objective of restricting competition in the market will be considered a restriction of competition, regardless of its actual effect on the market. Accordingly, if the aim of the exchange of information is to fix prices, quantities or other terms of trade, it would be considered and treated as cartel activity regardless of whether such information exchange has an actual effect on the market. In other words, once the Board establishes that the exchange of information is a restriction of competition by object, it is no longer required to analyse the effect of such exchange. The exchange of strategic information such as future prices or sales amounts generally fall under this category and would typically be treated as cartel activity.


Is there an Effect?

Exchanges of information may also lead to infringement of competition laws where the objective is not to restrict competition. In this case, the actual and potential effects on competition of such an exchange must be analysed on a case-by-case basis. As a first step, the characteristics of the market as well as the nature of the information exchanged must be assessed. Secondly, it is necessary to analyse whether the pro-competitive benefits of the information exchange (if any) outweigh the anti-competitive effects.


Assessing Your Risk - What Type of Market Are You Operating In?

The Guidelines list five main market characteristics that increase the likelihood of information exchanges resulting in a collusive outcome:


Information exchanges may increase market transparency. The more transparent the market in terms of prices, costs, volume, demand, output, etc., the more likely that exchanges of information may result in the restriction of competition.


The fewer the number of competitors in a market, the more likely that information exchanges will have restrictive effects.


Information exchanges may decrease volatility in a market. It is easier to collude in a stable market in terms of demand, supply, market share, number of competitors, etc. Therefore, the more stable the market, the more likely that information exchanges will restrict competition.


Companies with similar cost structures, market shares, product range, capacities, etc. are more likely to end up with a collusive outcome through the exchange of information.

Non- Complex

It is harder to restrict competition through information exchanges in complex markets covering a number of differentiated products.


Assessing Your Risk — What Type of Information Are You Exchanging?

The Guidelines lists the following factors that affect the assessment of whether information exchanged is likely to raise competition law concerns:

Commercially Sensitive (Strategic) Information

Future sales prices, costs, profit margins, promotions, terms of sale, business plans, customers, territories, capacities, production, output, quantities, turnovers and any information that is likely to reduce market uncertainty is considered particularly sensitive and risky to exchange with competitors.

Market Coverage

Information exchanges covering a substantial portion of the market are more likely to raise competition law concerns.

Aggregated / Individualized

The exchange of genuinely aggregated data, which would make identification of the individual data of a particular company difficult, is not likely to have restrictive effects.

Age of Data

The older the data, the less likely it is to have restrictive effects. Exchange of historic data is unlikely to be problematic; however, there is no threshold to determine how dated the data must be in order to be considered historic. This would require case-by-case analysis. On the other hand, the exchange of current and especially future data is generally considered problematic.

Frequency of Exchange

Frequent exchanges of information are more likely to lead to concerns compared to infrequent exchanges; however, it should be noted that even one single exchange of information may be considered restrictive.

Public / Non- public Information

The exchange of genuinely public information, described in the Guidelines as information that is equally accessible to all competitors and customers in terms of cost of access, is unlikely to restrict competition. A distinction should be made between genuinely public information and publicly available information, the exchange of which may give rise to a collusive outcome. The cost of collecting such data is an important factor in the analysis and should be assessed on a case-by-case basis.


In cases where it has been established that the exchange of information is likely to have restrictive effects due to market characteristics and the nature of information exchanged, the next step would be to determine whether there are any pro-competitive effects of the exchange and, if so, whether such pro-competitive effects outweigh the restrictive effects of the exchange. In order to do so, based on Article 5 of the Law on the Protection of Competition No. 4054, companies must show: (i) gains in efficiency, (ii) consumer benefits arising from such efficiencies, (iii) that competition is not eliminated in a significant part of the market and (iv) that competition is not restricted more than necessary to achieve such efficiencies and consumer benefits.

Although detailed explanations are provided in the Guidelines as to how the Board would make its assessment, it is also made very clear that there is no definitive list of information that can or cannot be exchanged and that the restrictive effects of any information exchange require a case-by-case analysis, much of which depends on the specific economic and factual context.



Information exchange is a rather grey area within the competition sphere. Despite the fact that specific Guidelines have been issued by the Board, the boundaries in this area are still vague, leaving significant room for discretion. Companies must therefore be extremely cautious in the exchange of information with competitors, particularly with information regarding future prices and quantities. Any information that reduces strategic uncertainty in the market and that is likely to affect the future market conduct of participating companies is problematic from a competition law perspective and may lead to significant fines issued by the Board.


Esma Aktaş (White & Case, Associate, Istanbul) and Arslan Gülsoy (White & Case, Legal Intern, Istanbul) contributed to the development of this publication

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