How An Association is Investigated and What is the Government Looking For— a Federal Trade Commission Perspective

• Published date: 01 June 1977
• Date: 01 June 1977
• DOI: 10.1177/0003603X7702200204
• Subject Matter: Article

HOW

AN

ASSOCIATION

IS INVESTIGATED

AND

WHAT

IS THE

GOVERNMENT

LOOKING

FOR-

A FEDERALTRADE

COMMISSION

PERSPECTIVE

by

RONALD J.

DOLAN*

In commenting upon the trade associations and craftsmen's

guilds of his day, Adam Smith once observed

that

"[p]eople of

the same trade seldom meet together, even for merriment and

diversion,

but

the conversation ends in a conspiracy against

the public, or in some contrivance to raise prices."! A contem-

porary student of

antitrust

law, Professor S. Chesterfield Op-

penheim, has carried the spirit of Smith's dictum to the point

of remarking

that

"[u]nless trade associations promote com-

petition and except as they do, there is little justification for

their existence."?

I leave to others both the existential question and an af-

firmative description of those association activities which may

promote competition. Instead, I will confine my remarks to a

review of how the Commission staff has proceeded in in-

vestigating associations, and the types of association behavior

that

may be considered suspect. Before going further,

however, I should add

that

as an Assistant Director of the

Bureau of Competition, I do not speak for the Commission, or

any of the Commissioners; nor are any of my comments this

morning intended to reflect upon the merits of any cases

which are pending before the Commission.

I. BACKGROUND OF THE NATIONAL

TRADE

ASSOCIATION INVESTIGATION

In October of 1975, the Bureau of Competition initiated a

formal investigation of several national trade associations for

*Assistant Director, Bureau of Competition, Federal Trade Commis-

sion, Washington, D.C.

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