Instances of AdWords 'truce'?

[shorebreak]

I was talking to a buddy today who manages SEM for a client, and he mentioned that his client and their top 2 competitors have an ongoing truce such that none bids on the other's brand kw.

Has anyone else seen this, and if so, a few questions:

1)How did the parties agree to enter a state of truce? Formally/informally?

2)How was the truce verified over time?

3)How long did the truce last?

4)Would anyone deem this 'collusion'? I don't think it would qualify as such, but if others have opinions...

5)Did benefits of such a truce outweigh costs ('costs' could be net lost conversions, entry of new competitors such that benefits aren't accrued, and 'benefits' could be SEM spend avoided, better SEM margins, etc)?

[briggidere]

Now we just get our clients to register their trademark with Google and this stops their competitors showing for them. It helps putting a bit of the responsibility on the client as well.

Previously when I worked for another company back in the UK we were No 1 organically for the brand name and no 3 in the sponsored links. We got 85% of all traffic for these terms so you can miss out on a bit of traffic if you are a well known brand.