Antitrust Guide
Statement of Policy: The antitrust laws are among the most important laws affecting business. Their purpose is to encourage fair and honest competition. It is the long-standing policy of NARTS to comply with the letter and spirit of these laws and to conduct its operations in every detail in full compliance of the law.
In recognition of the fact that compliance is dependent upon knowledge of the law, this summary of the antitrust laws is prepared to educate Association members and make them generally aware of the nature and breadth of the antitrust laws. It is not intended to provide members with the means to act as their own lawyers, but to sensitize them to areas of potential antitrust significance. Any specific concerns should of course be referred to legal counsel.
While NARTS meetings and activities are monitored by legal counsel, it is the responsibility of each member to ensure that it fully complies with the spirit and the letter of the antitrust laws.
The Antitrust Laws: The Sherman Act is the most significant antitrust law. Section 1 of the Act prohibits contracts, combinations, or conspiracies which restrain interstate or foreign trade or commerce. Such contracts, agreements or understandings can be either written or oral, either explicitly stated or implicitly entered. And, the Courts have interpreted interstate trade broadly to include almost any business transaction, whether or not it involves the crossing of state boundaries. Section 1 violations include price fixing, group boycotts, bid rigging or customer or market allocations by competitors. The Sherman Act also, in Section 2, forbids monopolies, attempts to monopolize, and conspiracies with another to monopolize any part of interstate or foreign trade or commerce.
The Clayton Act, enacted after the Sherman Act, was designed to supplement and to prohibit potential Sherman Act violations before they become fully established. It regulates certain types of business activities such as mergers, tying arrangements and exclusive dealing.
The Robinson-Patman amendment to the Clayton Act primarily makes it unlawful to discriminate (which the courts have said means "differentiate") in price between purchasers of commodities of like grade and quality when the effect may be substantially to lessen competition or tend to create a monopoly.
The Federal Trade Commission Act, in addition to establishing the Federal Trade Commission and granting it exclusive investigatory and enforcement powers, makes unlawful unfair methods of competition and unfair or deceptive acts or practices in commerce. In addition, most states have their own antitrust laws modeled after the Federal laws.
Antitrust Law Enforcement: The federal antitrust laws may be enforced: (a) by a criminal or civil action by the United States Department of Justice; (b) by administrative proceedings leading to a cease-and-desist order by the Federal Trade Commission; and (c) by a civil suit for treble damages by an injured competitor, customer, or consumer.
The penalties for violation of the antitrust laws can be severe. Individuals who violate the Sherman Act can be fined up to $100,000 and imprisoned up to 3 years, while corporations can be fined up to $1,000,000. Treble damages resulting from private civil suits can easily run into millions of dollars with the plaintiff's attorneys' fees as added damages.
In addition, involved trade associations may be disbanded or allowed to operate only with government supervision. Because the inference of antitrust violations even where there are none may result in long and costly investigations or legal actions, Association members must act to avoid the appearance of improper acts as well as the acts themselves. Accordingly, the following practical guidelines are aimed at ensuring that no illegal conduct may occur or be insinuated from otherwise legitimate activities.
Practical Antitrust Guidance for Association Members
DON'T discuss, comment upon, or complain about prices, terms, or conditions of sale, margins, credit terms, rebates, sales territories or similar matters with a competitor.
DON'T discuss future business plans of your company with a competitor.
DON'T discuss production levels or schedules with a competitor.
DON'T discuss intentions to bid or bids with a competitor.
DON'T discuss with any other party your relationship or planned relationship with any specific customer, competitor or supplier.
DON'T attend rump or informal sessions at any gathering of competitors.
DO utilize agendas for Association meetings prepared and reviewed by staff and legal counsel.
DO ensure that minutes are taken of Association meetings and that such minutes are reviewed by legal counsel.
DO ensure that Association memberships and benefits are available to all competitors on a fair basis.
DO ensure that staff and legal counsel are advised of all Association activities.
DO ensure that legal counsel is in attendance where legally sensitive questions could arise.
DO consult legal counsel whenever you have questions regarding the suitability of any Association activity.
DO read and utilize this guide and encourage other members of the Association to do so.