Overview of Antitrust Statutes and Government Enforcement Regimes that Affect Associations

• Pages: 7-23

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CHAPTER I

OVERVIEW OF ANTITRUST STATUTES AND

GOVERNMENT ENFORCEMENT REGIMES THAT

AFFECT ASSOCIATIONS

A number of federal and state antitrust laws apply to association

activities. In addition, the federal antitrust enforcement agencies have

issued guidelines of importance to trade associations, in particular the

Antitrust Guidelines for Collaborations Among Competitors,

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i ssued in

April 2000 by th e Federal Trade Commission (FTC or Commission) and

the U.S. Department of Justice Antitrust Division (DOJ or Antitrust

Division). This chapter summarizes those laws and guidelines and the

procedures followed by federal and state enforcement agencies.

A. Federal Antitrust Laws and Enforcement

1.

Relevant Federal Antitrust Statutes

The federal antitrust statutes rel evant to associations are:

(1) The Sherman Act, as amended;

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(2) The Clayton Act, as amended in 1936 by the Robinson-Patman

Act;

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(3) The Federal Trade Commission Act;

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(4) The National Cooperative Research Act of 1984, as amended

by (and renamed in) the National Cooperative Research and

Production Act of 1993, and the Standards Development

Organization Advancement Act of 2004;

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and

1. U.S. DEP’T OF JUSTICE & FED. TRADE COMM’N, ANTITRUST GUIDELINES

FOR COLLABORATIONS AMONG COMPETITORS (2000) [hereinafter

COMPETITOR COLLABORATIONS GUIDELINES], available at http://www.ftc.

gov/os/2000/04/ftcdojguidelines.pdf.

2. 15 U.S.C. §§ 1-11.

3. 15 U.S.C. §§ 12-17.

4. 15 U.S.C. §§ 41-77.

5. 15 U.S.C. §§ 4301-06.

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Antitrust and Associations Handbook

(5) The Foreign Trade Antitrust Improvements Act.

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a. The Sherman Act

The Sherman Act contains two substantive sections: one addresses

concerted action and the other addresses monopolization.

(1) Section 1: Illegal Concerted Conduct

Section 1 of the Sherman Act appl ies to concerted conduct by two or

more entities and provides in relevant part that

[e]very contract, combination in the form of trust or otherwise, or

conspiracy, in restraint of trade or commerce among the several States,

or with foreign nations, is hereby declared to be illegal.7

There are two broad categories of business ar rangements within the

scope of Section 1: horizontal arrangements between or among

competitors and verti cal arr angements between or among suppliers and

distributors. Historical ly, association activities that have been found to

constitute antitrust violations have been horizontal in nature. However,

where an association represents more than one segment in the

distribution chain, such as wholesalers and retailers, it is possible that

the association’s activities may result in potent ially unlawful vertical, as

well as horizontal, restraints.

Although Section 1 prohibits “every contract, combination . . . or

conspiracy in restraint of trade,” the U.S. Supre me Court recognized

long ago that every contract restrains trade to some degree, and Congress

could not have intended all contracts to be illegal.

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Thus, Section 1 has

been interpreted to prohibit only unreasonable restr aints of trade.

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Certain conduct is considered to be per se unreasonable, i.e., so

inherently likely to harm c ompetition that a court will not exa mine

justifications. Traditional categories of per se offenses include price

6. 15 U.S.C. § 6(a); 15 U.S.C. § 45(a) (3).

7. 15 U.S.C. § 1.

8. Standard Oil Co. v. United States, 221 U.S. 1, 58 (1911).

9. Texaco Inc. v. Dagher, 547 U.S. 1, 5 (20 06).