Contract Terms That Impede Competition Investigations

Every company knows it’s usually best to “get it in writing,” and a lot of time is spent negotiating contracts in the ordinary course of business.  But some of those contracts contain provisions that can impede the Bureau’s law enforcement investigations of potentially harmful mergers and conduct.  Our staff are hearing troubling reports about certain types of contract terms that can get in the way of open, candid conversations with the FTC: confidentiality clauses, nondisclosure agreements, and “notice of agency contact” provisions.  

Voluntary interviews are a critical part of our investigations.  They help us quickly get up to speed on marketplace realities by speaking with actual market participants.  And that makes voluntary interviews essential to the Bureau’s mission.  As an added bonus, voluntary interviews can be less burdensome on both staff and market participants than compulsory tools like subpoenas and civil investigative demands.  While the FTC does not intend to provide legal advice to any potential witnesses and advises anyone with concerns about liability under such contract terms to consult an attorney, we believe the law on this is clear.  When contract terms inhibit Bureau investigations, those terms are contrary to public policy, void, and unenforceable.

The Bureau’s legal analysis of this issue is available at:  Contracts That Impede Bureau of Competition Investigations.