Trade associations play an important role in promoting both the interests of their members and the industries they serve. Despite their many legitimate activities, however, trade associations have always been and remain subject to the antitrust laws. Trade associations inherently are comprised of competitors, and as recently noted on the FTC’s website, “competitors are expected to compete.” ¹

While competitor conduct in the context of association meetings and other events is often the focus of regulatory scrutiny, recent FTC enforcement actions have targeted formal ethics codes of certain trade associations as constituting unreasonable restraints of trade.

In one such case earlier this year, In the Matter of California Association of Legal Support Professionals, the FTC ordered the trade association cease and desist from its practice of barring its members from taking out comparative ads, and preventing members from offering discounted rates to another member’s clients or recruiting another member’s employees without giving prior notice. In another recent case, In the Matter of Music Teachers National Association, Inc., the FTC ordered the association to stop restricting its members from soliciting work from rival music teachers.

The FTC deemed the challenged conduct, i.e. – restraining members from “competing for customers, cutting prices, and recruiting employees” – of both associations to be “precisely the kinds of unreasonable restraint of trade that the Sherman Act was designed to combat.” ² Under the final consent orders issued in both cases, the targeted associations agreed to eliminate the provisions in their codes of ethics provisions, and the associations were ordered to institute and maintain antitrust compliance programs under continuing supervision by the agency.

This recent focus on trade associations is a clear warning that “there are no special antitrust rules for trade associations.” ³ Their activities are subject to close scrutiny under the antitrust laws and by enforcers.

In light of the recent FTC spotlight, a few practices that trade associations may wish to consider include:

1. Implementation of an Antitrust Compliance Program;
2. Promulgation of association bylaws and guidelines for association members and staff of what to do and what not to do within the context of their association activities; 
3. Preparation and circulation of agendas in advance of all meet¬ings; and  
4. Avoidance of competitively sensitive issues in both association and “off the record” meetings and discussions.

¹ Federal Trade Commission website: http://www.ftc.gov/news-events/blogs/competition-matters/2014/05/antitrust-associations.
² Statement of the Federal Trade Commission, In the Matter of Music Teachers National Association, Inc. File No. 131-0118; In the Matter of California Association of Legal Support Professionals, File No. 13100205.
³ Id.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents.