To ensure strict compliance with the antitrust laws of the United States, ACA has prepared this Antitrust Policy. These clear statements of conduct must always be kept in mind, and all Association meetings and other activities must be conducted in accordance therewith.
The primary antitrust law covering association conduct is Section 1 of the Sherman Antitrust Act. Section 1 prohibits contracts, combinations or conspiracies in restraint of trade. Conduct prohibited under Section 1 of the Sherman Act generally includes any agreements between competitors to reduce competition in order to fix prices or reduce output.
One of the clearest antitrust violations an association can experience is an agreement by its members to fix prices. Such an agreement is a per se violation of the antitrust laws—illegal even if the agreement ends up not impacting the market. This is true even if the prices set are reasonable or the ends sought are worthy. Importantly, terms and conditions of sale which affect the price are also subject to the same restrictions. These terms include discounts, freight allowances, terms of product warranties and other individual policies followed in dealing with customers. Informal understandings and planned courses of action on these subjects by competitors are also forbidden.
Another type of agreement that associations sometimes experience prohibited by Section 1 of the Sherman Act is a boycott, either of competitors or of suppliers or customers. In its starkest terms, a boycott is an agreement by a group of companies to not do business with a targeted company. Administrative or disciplinary action against member companies, or the expulsion of member companies, may result in economic injury to the affected members and, thus, may constitute an illegal boycott under the Sherman Act. Therefore, membership decisions and related disciplinary decisions must be discussed in accordance with strictly-defined legal guidelines and only in the presence of counsel.
Frequently, an association engages in the voluntary development of a product specification or industry standard of quality. Antitrust problems can arise if the standard developed advances the economic interests or operates as a marketing advantage for some members to the detriment of others. As a result, standards development should be done in consultation with counsel.
Statistical reporting is another common association-sponsored activity. However, the courts have long recognized the possibility that such reporting, if done incorrectly, could further price-fixing and monopolistic schemes. As a result, statistical reporting projects must be conducted with great care in order to conform with clearly-defined rules regarding the collection, protection, and dispersal of confidential product information. Development of new statistical reporting programs should be done in consultation with counsel.
A potential antitrust infraction can also involve normally protected association-sponsored efforts to petition government agencies for action. While it is the case that petitioning activity that is intended to lead to government action is protected, sham petitioning that is designed to harm competition through the imposition of government processes that themselves limit competition or harm competitors is not protected conduct.
The proper conduct of association meetings requires an understanding and conscious awareness by all of antitrust implications. Your non-participation in an improper discussion may not protect you if, out of such discussions at a meeting you attend, any agreement in restraint of trade originates. However, no imputed unlawful purpose can arise if conscious independent and individual judgment is exercised and no illegal common course of action is pursued.
From time to time, ACA member companies might solicit the support of the Association in circumstances involving government administrative actions directed against that company. In such situations, the appropriate role of the Association is to act in a manner consistent with the interests of the membership as a whole. Accordingly, any assistance provided individual members shall be done solely with a view toward protecting or advancing the interests of the industry and shall seek, where appropriate, to promote favorable government policies or foster precedent advantageous to the entire industry.
BE ALERT AND KEEP INFORMED. Antitrust laws are wide-ranging, complex, and subject to changing interpretations. Violations of the antitrust laws can have very serious consequences for the Association, its members and their employees. Consult your company’s lawyer or Association counsel immediately if you have any questions about the legality of any proposed Association action.
(Revised Dec. 2018)
ACA Antitrust Compliance Statement of Policy for Distribution and Recitation at Meetings and Conference Calls
It is American Coating Association (“ACA”) policy to comply fully and strictly with both federal and state antitrust laws. ACA’s policy is motivated by a firm respect and belief in the antitrust laws and the free market philosophy underlying those laws, as well as, recognition of the potentially severe detrimental consequences of antitrust violations. Our aim is to conduct ourselves in such a way as to avoid any potential for antitrust exposure.
Full compliance with the antitrust laws is a requirement for ACA participation, and responsibility for compliance rests with each participant.
In order to comply with the antitrust laws, competitors should not discuss certain subjects when they are together — whether at formal ACA meetings, on conference calls, in correspondence, or through informal contacts with other ACA participants. Topics to avoid discussing with competitors include: prices, price trends, timing of price changes, costs of common inputs, margins, terms of sale, discounts and rebates, inventory levels, production levels, capacities, and the like. Further, participants are prohibited from:
- Fixing or setting prices for selling products or services;
- Allocating geographic markets or customers between or among competitors;
- Bid rigging, bid rotation, or otherwise distorting the bid process;
- Boycotting customers or vendors;
- Agreeing upon levels of production or output;
- Conspiring to exclude competitors or customers from the market; and
- Discussing specific non-public R&D, sales or marketing plans, or any company’s confidential product, development, or production strategies.
ACA meeting participants have an obligation to terminate any discussion, seek legal counsel’s advice, or, if necessary, terminate any meeting if the discussion might be construed to raise any antitrust risks.
(Revised Dec. 2018)