Membership Criteria and Availability of Association Benefits to Nonmembers

A. Membership Criteria and Expulsion of Members
An association forms because its members have common interests
that can benefit from joint effort. Most associations have limitations on
membership i n order to function effectively.
Membership is typically
restricted to those in a discrete trade or profession, based on the good
produced or service provided. Membership criteria may limit eligibility
to participants at one or more levels of a supply chain or by market
function (e.g., manufacturers, wholesalers, or retailers) or specify t hat
member activities occur in a particular geographic area.
Membership in
a trade or professional association also may be conditioned on a
company’s or individual’s compliance with product or service standards
or ethical codes, or becoming certified to engage in a part icular
profession or line of business.
1. See Northwest W holesale Stationers v. Pac. Stationery & Printing Co.,
472 U.S. 284, 296 (1985) (associations “must establish and enforce
reasonable rules in order to function effectively”).
2. Geographic limitations have b een held to be acceptable where they define
a functionally existing trading region; conversely, arbitrary or overly
restrictive geographic boundaries have been found unreasonable. See
Am. Fe d’n of Tobacco Growers v. Neal, 183 F.2d 869 (4th Cir. 1950)
(rule that prospective members could not join if they were located less
than one quarter of a mile from an existing member found unreaso nable
because the boundary did not reflect a natural trade boundary). It is
increasingly common for international or foreign organizations to seek
membership (or participation) in domestic associations. For purposes of
antitrust analysis, a foreign organization with domestic manufacturing
facilities and sales may be consider ed to be competing with domestic
manufacturers. See, e.g., United States v. Material Handling Inst., 1973
Trade Cas. (CCH) ¶ 74,362 (W.D. P a. 1973) (consent decree requiring six
trade associations to admit to membership any firm that manufactures
within the United States “no less than 75% . . . of all material handling
equipment sold by the firm in the U.S.”).
3. See Chapter VIII for a discussion of the antitrust principles applicable to
standard-setting activities.

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