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Many companies are turning to joint purchasing agreements or buying groups in order to lower procurement costs. Courts and the antitrust agencies acknowledge that many joint purchasing agreements are procompetitive because they allow companies to lower input costs and achieve other cost savings. These purchasing efficiencies, however, have to be balanced against the potential to create monopoly buying power (monopsony power) and facilitate collusion through standardization of costs and information sharing. Therefore, joint purchasing arrangements can raise antitrust concerns if the arrangement accounts for so large a portion of the purchases of a product or service that the buying group can effectively exercise market power in the purchase of the product or service (“monopsony concern”); or the products or services being purchased jointly account for so large a proportion of the total cost of the products or services being sold by the participants that the joint purchasing arrangement may facilitate price fixing or otherwise reduce competition (“collusion concern”).

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