On May 1, the Federal Trade Commission issued a press release concerning the antitrust risks involved in trade association activity and cautioned such groups that the Commission continues to maintain an active antitrust enforcement focus on trade association activity. Interestingly, the release does not appear to have been the result of any specific enforcement action, but, instead appears designed to communicate the FTC’s continued interest, and perhaps a particular focus, on trade association activity.
In the release, the FTC acknowledged its understanding that trade association activity can be of great benefit to not only the particular business involved, but also the public. Yet the Commission cautioned that trade associations also are uniquely positioned to facilitate unlawful coordination among members. Thus, while the FTC recognized that “today’s trade associations typically serve many legitimate purposes, and from an antitrust perspective, most trade association activities are procompetitive or benign,” it warned that “[t]rade association conduct or rules that restrict competition in a way that harms consumers will continue to invite antitrust scrutiny.”
Notably, the FTC recently obtained settlement agreements with two trade associations, to which the release refers. Those enforcement actions sought to remedy rules adopted by the associations’ membership which, in the Commission’s view, threatened to reduce competition among members. While the rules were defended as a means to promote collegiality among members, in the Commission’s view, they had the effect of stifling members’ freedom in their marketing and sales practices. Using those settlements in its recent release, the Commission noted that the release 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 to revisit some best practices that trade associations may wish to consider:
- Promulgating association bylaws and member rules that do not constrain how members compete and that promote competition.
- Drafting meeting agendas to avoid discussion of competitively sensitive areas.
- Prefacing each association meeting with guidance on antitrust compliance issues.
- Discouraging attendees from having “off the record” discussions.
This article is only a general guide to the subject matter, and specialized advice should be sought regarding any specific circumstances of concern.