Every once in awhile, someone asks, “hey, there’s a trade association meeting coming up, is there any antitrust stuff we need to think about?”
“Yes, there is,” I say.
Sometimes the day-to-day questions that come up make for a reasonable jumping off point for a post. Sometimes they don’t and you try to force them to because you need something to write about. Sometimes the topic of actual conversation is rather more sensitive than should even be alluded to in public on a blog. Hopefully this one has a little from column A and none from column C.
Whenever this question comes up I think about whether to point out how frequently allegations of cartel behavior, both here and abroad, center on trade association meetings or their immediate surroundings (airport bars and golf courses seem like particularly popular places to reach nefarious agreements). And I think about whether to mention that “hardcore” antitrust offenses (price fixing, bid rigging and market allocation) can be prosecuted as felonies that send people to jail and cause companies to pay large fines and civil damages (that’s and, not or). And I think about mentioning specific cases with publicly-known facts.
Then I realize that my audience usually isn’t looking for all that stuff. What they want to know is (1) what can I do to reduce the potential antitrust risk, and (2) is it even worthwhile or effective?
Of course, the answer to number 2 always depends on which options you select for number 1. It’s completely effective if you decide not to attend any trade association meetings, but one finds that abstinence-only antitrust counselling is shockingly unpopular.
If you’re a company that wants to participate in a trade association, or you’re a trade association, abstinence obviously isn’t going to work for you. What should you do?
Well, the basic advice is generally the same for any time you’re involved with dealings with competitors: prepare an agenda (consider running it by counsel), stick to it, document that you stuck to it, consider whether supervision (in the form of a lawyer or otherwise) is needed and keep in mind that sharing competitively sensitive information, or worse, reaching anticompetitive agreements, can be personally harmful to you and as well as harmful to the company.
If you’re the trade association, consider whether you want remind participants, in writing or out loud at the start of the proceedings, about their obligations under the antitrust laws.
“But,” you ask, “does all of that really add up to anything that works?”
Well, let’s define, “works.” Does doing all of that make the mean prosecutors from the Antitrust Division leave you alone even if anticompetitive agreements are actually reached? If you’re the trade association, maybe. If you’re a competitor/participant, no.
The Department of Justice isn’t going to look the other way on anticompetitive conduct because you took precautions. At best, you might get a little credit when it comes to sentencing. But aren’t we really trying to use those precautions to try to prevent anticompetitive conduct in the first place?
I suppose it’s appropriate to wonder whether the precautions really have that effect too, but in the absence of empirical evidence otherwise, I’m thinking that trade association participants are probably better off having attempted to take prophylactic measures. If nothing else, reminding people to be cautious in their dealings with competitors can help prevent careless actions.
It’s like when ticket agent at the airport used to ask if anyone gave you anything to carry on to the plane. They weren’t hoping that someone trying to sneak a bomb aboard would spontaneously confess. They were hoping that a naive traveler who failed to realize that they should not transport packages for strangers would answer honestly.
So too these basic precautions are meant to remind the innocent sales representative who might otherwise not see why it isn’t a great idea to divide customers up with his competitor might be made just a little wary.
