It happened many times that I saw a paper submitted to a conference where I am on the PC, or a journal where I am editing, and such paper had something similar to what I am working on. The situation is worse when I already have something better.
Of course I should declare a conflict of interest and should let others handle the paper. But I always wonder whether I should contact the authors.
- If I don't contact the authors, they might doubt the independence of my paper from theirs when I publish my paper (since my name is shown in the conference/journal they submitted their paper to). This will be worse if their paper was not published at that point (perhaps it got rejected several times).
- If I do contact the them, they may feel that I push them to do something they don't want to, such as making their paper public or collaborating with me.
There are more pros and cons, but I will stop here to keep the question short.