For executives at publicly-traded corporations, earnings calls are routine business events. In the world of antitrust law, however, statements made on earnings calls can provide fodder for plaintiffs to claim that instead of providing information to investors and the public, the purpose of the statement was to invite competitors to unlawfully collude. This article explores the antitrust implications of earnings call statements and provides guidelines to minimize antitrust risk.
Antitrust price-fixing complaints follow a common formula: They typically allege that the structure of the industry makes it susceptible to collusion, that the defendants increased prices in quick succession, and that the defendants had opportunities to collude at trade association meetings or other industry gatherings. In general, these allegations alone will not survive a motion to dismiss. Rather, plaintiffs must allege “plus factors” that suggest that parallel conduct in the industry was the result of an anticompetitive agreement rather than a rational, independent decision by each company. More and more, plaintiffs try to use public statements in earnings calls or other public communications as a plus factor to satisfy their initial pleading burden.
