Group Purchasing Organizations (“GPOs” or “buying groups”) are far more common than one might think. For example, many privately owned independent groceries and franchised fast-food restaurants belong to purchasing cooperatives, as do hospitals and local governments. GPOs take various legal forms, including member-owned cooperatives or LLCs, member-governed nonprofit corporations, for-profit member “clubs,” and government agencies. Some buying groups take title and resell products, while others negotiate terms under which members purchase directly from vendors. Some buying groups manufacture all or part of the products that members buy through the group, but it is more common for buying groups to outsource from independent suppliers.
In this article, reprinted from the Summer 2009 issue of Antitrust magazine, Dorsey partner Michael Lindsay explores the antitrust implications of group purchasing.
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