Because trade associations are composed of a group of competitors, members should take particular care to avoid engaging in any behavior that may unwittingly run afoul of U.S. antitrust laws. Trade association meetings in particular may present a number of antitrust risks. For example, the topic of conversation may turn to matters that would be expected to be kept secret by competitors.
Government regulators or a court may use trade association meetings as evidence of a “cover” to facilitate collusion in a particular industry. For example, the U.S. Court of Appeals for the Sixth Circuit recently held in in Carrier Corporation v. Outokumpu Oyj¸673 F.3d 430 (6th Cir. 2012), that the plaintiff’s complaint pled sufficient facts to substantiate its antitrust claims that copper tube manufacturers conspired to allocate customers and markets - in part because the plaintiff alleged that manufacturers coordinated their conspiracy through biannual trade association meetings, and that trade association meetings corresponded with industry price increases.
Topics that are off-limits at trade association meetings include:
- Pricing of goods, including any discussions of methods, strategies, timing, discounts, advertising, or what constitutes a fair and reasonable price
- Terms or conditions of sale, including credit or promotional programs
- Output restrictions or production capacity
- Allocation of customers or territories
- Whether to do business with suppliers, customers, or competitors
- Exchange of pricing, margins, costs and other competitively sensitive information
- “Areas of responsibility” like geographic regions, types of customers, or types of products
- Complaints about business practices of other firms, especially collective action aimed at injuring or coercing another competitor (group boycott)
So beyond steering clear of the off-limit topics above, what can trade associations and its members do to avoid antitrust issues (or the perception of issues) relating to communications with competitors at trade association meetings? Some safeguards include:
- Experienced antitrust counsel (or at minimum, trade association staff trained in antitrust compliance) should attend trade association meetings.
- Prepare agendas and presentations in advance of meetings.
- Take care to stick to the agenda for the meeting unless there is a good reason to depart.
- Prepare meetings of the minutes that concisely reflect the discussions – especially where they diverge from pre-prepared materials.
- If any discussions or meetings appear to violate the antitrust laws – or even makes you think it could be an issue – ensure that minutes reflect the fact that you raised objections and voted “no.” Then disassociate yourself immediately from the discussion and leave.
- If you have a pro-competitive, legitimate, but self-interested reason for supporting a measure, ensure this reasoning is reflected in minutes and your own records.
- In situations where there are no meeting minutes (e.g., trade shows, social gatherings), bring someone else with you. Consider memorializing the discussion in an e-mail to discussion participants afterward.
If you are a trade association or a trade association member and have antitrust questions or concerns, don’t hesitate to call us. We’re here to help.