Antitrust law condemns price-fixing cartels and seeks to encourage private suits against the conspirators by automatically trebling antitrust damages and by providing for joint and several liability. Because the Supreme Court has held that there is no right to contribution among antitrust violators, this creates the risk of a single defendant being saddled with damages significantly greater than three times the amount of the harm associated with that firm's own market share. Firms engaged in-or accused of-price fixing often try to ameliorate this risk by entering into judgment-sharing agreements, which essentially create a right to contribution through contract. Despite their ubiquity, judgment-sharing agreements have received almost no scholarly attention. Courts and commentators uniformly praise them as a reasonable way for firms to manage risk and eliminate the perceived unfairness of joint and several liability without a right to contribution.
This Article shows how judgment-sharing agreements can undermine antitrust deterrence and stabilize price-fixing cartels. Using both economic theory and empirical evidence, the Article explains how judgment-sharing agreements may reduce settlement values, lead to the suppression of incriminating evidence, reduce the likelihood of success of meritorious price-fixing suits, and make price fixing cost-beneficial. The Article then argues that fairness arguments in favor of judgment-sharing agreements (and contribution more generally) are misguided and easily disproved, and in any event outweighed by the potential anticompetitive effects of such agreements. Finally, the Article advocates a more informed antitrust treatment of judgment-sharing agreements that takes into account their potential use for anticompetitive purposes.