Health information exchange (HIE) is intended to enable better, more efficient health care by electronically transferring patient data across provider organizations. Many policy makers, including members of Congress, are concerned that some electronic health record (EHR) vendors may be impeding this effort by making cross-vendor HIE difficult. We used national data to assess how market dominance by EHR vendors was related to hospitals’ engagement in HIE in 2012 and 2013. Across all levels of vendor market dominance, hospitals using EHR systems supplied by the dominant vendor engaged in an average of 45 percent more HIE activities than hospitals not using the dominant vendor. However, when the dominant vendor controlled a small proportion—20 percent—of the market, hospitals using the dominant vendor engaged in 59 percent more HIE activities than hospitals using a different vendor. Conversely, when the dominant vendor controlled 80 percent of the market, hospitals using that vendor engaged in only 25 percent more HIE activities than hospitals using a different vendor. In markets with low vendor dominance, hospitals may engage in less HIE with hospitals using other vendors’ systems, compared to markets with high vendor dominance, because of high costs and competitive barriers. Policies designed to promote cross-vendor HIE may need to take local market competition into account.