Association Activities

• Pages: 20-60

An Antitrust Guide for Trade Associations

20

other penalties, such as forfeiture of property

rights, also are allowed under the laws of some

states, and may be more severe than the penal-

ties allowed under federal law. The attorneys

general in several states conduct active antitrust

enforcement programs, bringing actions under

both the federal laws and applicable state anti-

trust laws. The specific provisions of the anti-

trust statutes for the states, the District of

Columbia, the Virgin Islands, and Puerto Rico

are discussed in State Antitrust Practice and

Statutes (3d ed. anticipated in 2004), published

by the ABA Section of Antitrust Law. The en-

forcement practices of the attorneys general also

are discussed in that source and in Antitrust Law

Developments 803-34 (5th ed. 2002), published

by the ABA Section of Antitrust Law.

IV. Association Activities

A. Overview

Although the antitrust laws are not an im-

pediment to appropriate association activity,

trade associations and their members must be

fully aware of the types of conduct these laws

proscribe when carrying out an association’s

programs and activities. The antitrust prob-

lems that association activities may present

fall into three broad categories:

1. Activities That Are Illegal in Themselves,

Specifically Price-Fixing, Bid Rigging, and

An Antitrust Guide for Trade Associations

21

Market or Customer Allocation. These prac-

tices are universally understood to be illegal

under any circumstances, regardless of their

actual effect on competition, and thus are called

per se unlawful. They usually are subject to

criminal prosecution, as well as to civil actions

seeking damages.

2. Activities That May Result in Unreason-

able Restraints on Competition Under Certain

Circumstances. These activities include mem-

bership requirements, expulsion, nonmember

participation in association programs, the ex-

change of economic and statistical information

(including bench-marking), the promulgation

of product standards, the preparation of indus-

try codes of conduct and self-regulation, joint

research and product development efforts, joint

purchasing and joint marketing, advertising

programs, and lobbying efforts. These types of

activities might not be designed to harm com-

petition or competitors, and may not be per-

ceived to present potential antitrust concerns,

but can be anticompetitive under certain con-

ditions. Appropriate legal advice can ensure

that associations develop and carry out these

types of activities in a manner that reduces

the risk of antitrust liability.

3. Activities That May Create an Inference or

Appearance of Wrongdoing, But in Fact Are

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Innocent. Suspicious behavior, casual contacts

and camaraderie, or carelessly worded letters,

statements, and memoranda often needlessly

create the impression or aura of an anticom-

petitive understanding or agreement. With

appropriate education and sensitivity to the

impact and the consequences, this type of prob-

lem should be avoidable.

To analyze trade association activities, as

well as all cooperative and joint activities

among competing firms, the Federal Trade

Commission and the Department of Justice fol-

low an approach that they describe in the An-

titrust Guidelines for Collaborations among

Competitors (2000) (Competitor Collaboration

Guidelines). The agencies begin by determin-

ing the business purpose of the agreement or

arrangement under consideration and whether

it already has caused anticompetitive harm.

Where anticompetitive harm is evident

from the nature of an agreement or has already

occurred, the agencies will challenge the agree-

ment. Such agreements would appear to be

plainly, or per se, illegal, as discussed in sec-

tion IV.B.

If the nature of an agreement and its pur-

pose indicate possible anticompetitive concerns,

the agencies will consider whether the agree-

ment may create, increase or facilitate mar-