April 7, 2014
As an update to two association cases that I blogged about last December (see: here), this past Friday the U.S. Federal Trade Commission (FTC) announced that it had approved settlements with two professional associations for allegedly restraining competition through association codes of ethics.
In these two cases, the FTC took issue with association codes of ethics put into place by an associations of music teachers and another of legal support professionals that allegedly restricted members’ ability to: solicit competitors’ clients; charge fees lower than “community averages”; offer free services; or engage in certain types of price and comparative advertising.
Under the final consent orders the FTC approved, these two professional associations have agreed to eliminate their code of ethics provisions that allegedly restrained competition among members.
These cases are a recent reminder of the importance for trade, professional or other associations to critically assess codes of ethics for restrictions that, while they may make business sense for members, may raise competition/antitrust concerns. In other words, “ethical”, if it involves collectively agreed upon bare restraints on competition, may not be ethical but rather illegal.
These cases are also a reminder that associations remain on antitrust enforcement agencies’ lists, including in Canada where associations have been receiving enhanced attention from the Competition Bureau over the past few years – see for example: New Anti-Cartel Compliance Materials Issued by Competition Bureau, Including Trade Associations Pamphlet.
For more about Canadian competition law and associations see: Associations and Association Compliance.
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