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Horizontal agreements that could hinder your company’s success

When you are looking for new ways to make your company competitive in your industry, one of the methods you may choose is to collaborate with other competitors to achieve a broader purpose. At Wang IP Law Group, we have helped many of our clients in California to work their way through complex business litigation. 

When you are forming horizontal agreements with other industry experts in your field, the advantages can be many, including the fact that you may access core competencies that you may not have. Utilizing another company’s resources and strengths may be an invaluable way for you to further your initiatives and work toward a more successful outcome. However, certain agreements can potentially have legal consequences if they are found to be a source of unfair competition with other competitors. 

According to the Federal Trade Commission, some disagreements that you should avoid include the following:

  • Forming business associations that are exclusive and provide members with desirable benefits. However, you are only allowed access to the benefits if you are an approved member, thus excluding other competitors who do not have a membership. 
  • Placing restrictions on the advertisement privileges of other competitors in your industry to give yourself a leading edge. 
  • Implementing stringent ethics rules that restrict competition from your competitors. 

When you are aware of the dangers of forming certain agreements with your competitive partners, you can avoid participating in behavior that could potentially get you in trouble. For more information about business litigation topics, visit our web page.  

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