FTC to Trade Associations: We’re Watching You
The Federal Trade Commission (FTC) issued a press release yesterday (available here) touting its continued focus on trade associations’ compliance with the antitrust laws. What makes the release interesting is that it was not triggered by a specific enforcement action. Instead, it seems intended to send the message that the FTC’s antitrust team is keeping a close eye on trade associations.
The FTC’s release began by confirming the FTC’s long-standing view that trade associations serve an important role, yet also are uniquely positioned to facilitate coordination among members in violation of the antitrust laws. The FTC admitted that “today’s trade associations typically serve many legitimate purposes, and from an antitrust perspective, most trade association activities are procompetitive or benign.” But the Commission also warned that “[t]rade association conduct or rules that restrict competition in a way that harms consumers will continue to invite antitrust scrutiny.”
As Arent Fox reported earlier this year, the FTC obtained settlement agreements with two trade associations at the end of 2013. Those enforcement actions targeted the propensity for the associations’ membership rules to reduce competition among members. Those rules were intended to promote collegiality among members, but they had the effect of stymieing marketing and sales practices. Yesterday’s release explained that these two cases should “serve as a reminder that the Commission ... remains vigilant about trade association activity that restrains competition among the members without a legitimate business justification. If you are a member of a trade association ... remember that there are no special antitrust rules for trade associations.”
The FTC’s warning is a good opportunity for trade associations to ask:
- Do our bylaws and member rules constrain how members compete? Or do they promote competition?
- Are meeting agendas carefully tailored to avoid anticompetitive discussions? Do meetings adhere to those agendas?
- Are attendees reminded about compliance with the antitrust laws and the ramifications if some flout the laws?
- Can attendees engage in “off the record” discussions that could be problematic?
- Are members using the association’s discussion boards for inappropriate topics?
- What information or data is collected from members, and how might that be used to limit competition?
Meanwhile, association members should ask:
- Do the association’s bylaws and rules help the company avoid competition? Or do they elevate and promote quality, innovation, and other precompetitive outcomes?
- Are employees attending trade association meetings where they may discuss competitively sensitive issues? If so, will antitrust counsel be present?
- What information do we receive from trade associations about competitive firms that could be used to limit competition?
Arent Fox’s Antitrust & Competition Law team routinely works with clients to answer these questions. Please contact one of the team’s attorneys or the Arent Fox professional who regularly handles your matters.