Antitrust Implications of Industry Standards and

Transcript:Antitrust Implications of Industry Standards and:
Antitrust Implications of Industry Standards and Certification Programs April 11, 2013 Laura A. Wilkinson Weil, Gotshal & Manges LLP Background Most trade associations, standard-setting organizations (SSOs) and other forums where competitors interact are procompetitive or at least competitively neutral. These organizations provide a substantially useful function to their members and society. (E.g., perform an industry-wide information-gathering function, establish legitimate industry standards, or represent their members before legislative or governmental bodies.) However, the very nature of such groups — i.e., a gathering of competitors — provides a forum that is ripe for anticompetitive activity. Most trade associations, if managed carefully, can perform these functions without undue antitrust risks. When trade association members intentionally or unintentionally fail to take account of antitrust concerns, the activities have the potential to evolve into illegal conduct. 2 Central Antitrust Issue The central antitrust concern is, of course, that competitors will act in concert — rather than as independent competitors. There are many things that a company on its own can do legally, such as setting its prices or refusing to deal with a certain customer or competitor. However, when such decisions are made together with other competitors, they become price fixing and horizontal group boycotts. Coordinated conduct that directly impacts price or output is per se unlawful. Where there are some procompetitive, efficiency-enhancing aspects, the conduct may be analyzed under the rule of reason, a fact-specific analysis that considers whether the procompetitive aspects of the agreement outweigh any potential anticompetitive effects. 3 Informal Discussions Although business people today are less likely to get together in a smoke filled room and agree on prices, the informal discussions that precede and follow the formal trade association or SSO meeting create the biggest risk of antitrust exposure. Informal discussions can often involve anticompetitive overtones — e.g., agreements as to price, customers, sales and marketing strategies, restrictions on advertising and the like. They may gather around a table and commiserate because “prices are lower than they would like,” or “their company would certainly make more profit if there were some ‘order’ to the industry,” or “there’s just too much capacity for any of us to make money.” These same types of discussions easily could occur on the phone, in written correspondence, or in e‑mail messages or an industry online forum — and the antitrust risk inherent in such discussions is just as real as if the members sat in