Collective Action or Collusion? Regulators Target Industry Initiatives

But while the chorus of warnings has grown louder, the facts and law may not be on the enforcers’ side. Understanding the distinction between legitimate collective action and unlawful collusion is critical for companies and associations navigating this evolving landscape.

Recent Enforcement Activities 

A coalition of 10 state attorneys general, led by Florida, issued warning letters on February 10 to approximately 80 companies, asserting that participation in the US Plastics Pact, Consumer Goods Forum, and Sustainable Packaging Coalition may expose companies to antitrust liability. The letters escalate earlier correspondence sent to the coalition organizations in October 2025 and also raise consumer protection concerns.

This action is part of a broader pattern of enforcement activity targeting environmental, social, and governance (ESG)-aimed collaborations across multiple industries. In January, the Federal Trade Commission (FTC) sent warning letters to 42 major law firms regarding their participation in the Mansfield certification program, a diversity initiative, asserting that collective participation in such programs could constitute anticompetitive collusion. In August 2025, the FTC closed an investigation into semitruck manufacturers participating in the Clean Truck Partnership, with FTC Chairman Andrew Ferguson emphasizing that “there is no ESG exemption from the antitrust laws.”

Meanwhile, state attorneys general are pursuing aggressive litigation on this front. Michigan Attorney General Dana Nessel filed an antitrust lawsuit in January against major oil companies and the American Petroleum Institute, alleging they operated as a “cartel” to suppress renewable energy competition. And a 2024 lawsuit by state attorneys general against institutional investors alleged that they pressured coal producers to reduce output in line with “net zero” initiatives; the case survived motions to dismiss.

When Does Collective Action Become Collusion?

Across these actions, regulators are characterizing what appear on their face to be voluntary sustainability commitments and industry-wide targets as “collective action” that may restrain trade in violation of the Sherman Act. But warning letters alone do not establish antitrust liability. To prevail on their theories, regulators would need to prove that companies actually entered into an agreement that harmed competition.

The critical question, then, is: When does common action cross the line into unlawful collusion? Several considerations inform that analysis:

• Voluntary vs. Compelled Participation: Genuinely voluntary programs, where individual companies independently decide whether and how to participate, are fundamentally different from arrangements where participation is effectively required or where non-participation carries penalties. A company that independently chooses to follow an industry standard, without any underlying agreement to coordinate competitive behavior, engages in unilateral conduct that should fall outside the scope of Section 1 of the Sherman Act. The key is whether companies retain genuine independence over their core competitive decisions on pricing, sourcing, product design, and market strategies. An industry initiative that establishes shared goals while preserving each participant’s freedom to determine how (or whether) to achieve those goals presents a different risk profile than one that dictates specific competitive conduct.

• Purpose and Effect on Competition: Courts apply different levels of scrutiny depending on the nature of the alleged restraint. Agreements among competitors to fix prices, allocate markets, or engage in group boycotts are treated as “per se” unlawful — no further inquiry into their competitive effects is required. But most sustainability initiatives do not fit neatly into those categories. Where the purpose of a collective effort is to achieve legitimate objectives (such as environmental sustainability or product safety) and the effect is not to restrict output, raise prices, or exclude competitors, courts will apply the more forgiving “rule of reason” analysis that weighs any anticompetitive effects against procompetitive benefits.

• Exclusionary Conduct and Market Foreclosure: Enforcers gain the most traction where an initiative functions to exclude competitors or foreclose market access. If participation in a sustainability program is used as a gatekeeping mechanism, the arrangement begins to look more like a horizontal group boycott. For example, it would be more problematic if purchasers were to collectively refuse to deal with suppliers who do not participate, or if certification becomes a de facto requirement for market access due to regulatory requirements or practical market dynamics. Companies should evaluate whether their initiatives could be characterized as mechanisms for market exclusion, even if that is not their intent.

• Information Exchange and Coordination Mechanisms: Antitrust risk also depends on what information competitors share through collective initiatives and how that information is used. Exchange of competitively sensitive information, such as pricing data, cost structures, or future business plans, can facilitate tacit coordination even without an explicit agreement. Industry initiatives should be structured to avoid unnecessary information sharing and to ensure that any data exchange serves legitimate purposes unrelated to competitive coordination.

Practical Implications for Companies and Associations

In light of this evolving enforcement landscape, companies and associations should consider several practical steps:

1. Assess Current Participation: Companies and associations should evaluate whether their initiatives could be characterized as anticompetitive coordination. This includes reviewing the structure of initiatives, the nature of any commitments made, and whether participation could be framed as collective action to exclude competitors or restrict output.

2. Examine Initiative Structure: Industry associations and consortia should examine whether their initiatives could be reframed to reduce the appearance of horizontal coordination. Structural considerations would include ensuring that members retain genuine independence in implementation decisions, avoiding mechanisms that could function as penalties for non-participation, limiting the exchange of competitively sensitive information, and contemporaneously documenting the procompetitive purposes of any collective efforts. 

3. Consult Antitrust Counsel: Companies and associations should work with antitrust counsel to review participation risks, evaluate whether commitments are truly voluntary and independently determined, and consider how governance structures and program design may affect antitrust exposure.

Compliance collective action requires maintaining genuine independence while pursuing legitimate collective objectives.

ArentFox Schiff’s Antitrust & Competition team and Nonprofits & Associations practices regularly advise clients on strategies for antitrust compliance that align with their business goals.