Rethinking Competitor Collaboration in the AI Era
The Federal Trade Commission (FTC) and the U.S. Justice Department (DOJ) have opened a joint public inquiry into whether to update antitrust guidance for collaborations among competitors. That’s good news. Modern markets—especially those shaped by artificial intelligence—need clear rules that distinguish genuinely harmful collusion from productive, welfare-enhancing cooperation.
No one seriously disputes that naked price-fixing and horizontal market-division schemes remain unlawful. But not every agreement among rivals amounts to a cartel. In innovation-driven sectors, collaboration often reduces risk, combines complementary assets, and enables new products and productive capacity that would not emerge nearly as quickly through atomized action. Law & economics scholars have long recognized this point, and it should anchor any new guidance.
AI provides a particularly useful test case. Building and deploying advanced systems requires vast, specialized inputs: semiconductors, cloud capacity, engineering talent, model-evaluation tools, cybersecurity safeguards, privacy-preserving techniques, land, electricity, transmission access, cooling systems, and sometimes shared technical standards. In that environment, antitrust overdeterrence can be as harmful as underenforcement. Guidance that treats coordination with reflexive suspicion will raise costs, slow deployment, and weaken dynamic competition. Sensible safe harbors and administrable rule-of-reason principles, by contrast, can promote innovation without giving cover to true cartel conduct.
That is the core point. Updated competitor-collaboration guidance should make clear—early and often—that collaboration aimed at expanding innovation, infrastructure, interoperability, privacy, and safety usually promotes competition. The law should target agreements that suppress rivalry, not those that make rivalry more effective.