Antitrust back in the spotlight
It took three weeks for the newly confirmed Assistant Attorney General for the Antitrust Division Christine Varney to note a major federal policy shift. In remarks on Monday and Tuesday, she left little doubt that the Obama Administration will actively pursue possible antitrust violations. As if right on cue, the European Union on Tuesday smacked Intel with a record antitrust fine, all of which presents the perfect opportunity for associations to take a look at their own antitrust risks and practices. I talked with Pillsbury Winthrop Shaw Pittman attorney Jeff Glassie about what this means for associations.
"I think you have to look at the new assistant district attorney's remarks and you have to look at the consent order the FTC issued to settle charges against the National Association of Music Manufacturers issued in March as evidence of how this administration is going to focus on antitrust issues," says Glassie.
The NAMM case is notable because there was not an allegation of an anticompetitive agreement being reached by means of NAMM, only that NAMM facilitated an exchange of information. Agreements can be per se antitrust violations, information exchanges by themselves are not. Still, the FTC pursued NAMM because it said the way they actively sought to exchange information could lead to anticompetitive practices. (Read the FTC's take.)
Varney's remarks, on the other hand, were aimed more at monopolisitic parts of antitrust law, which are not an area where associations face a great deal of risk. Still, Glassie warns that her remarks are not insignificant to associations.
In a poor economy, there might be some expectation of deference to business to ensure that they remain or regain profitability and avoid bankruptcy or closure. But "she pretty clearly laid out that protecting consumer welfare cannot take a backseat in a challenging economy," he says. "She didn't use the word 'associations,' but she did say that there is no adequate substitute for a competitive market, particularly in times of economic stress. In terms of antitrust enforcement, the administration has signaled it intends to play a vigorous roles, which is a sharp contrast to the last eight years."
So what should associations do about it?
First, "Don't look at this as some kind of black cloud," says Glassie. "When I make presentations to associations on antitrust, I'm sure to say that our country is founded on a free market system. What keeps it a free market and not one subject to collusion or to the dominance of a very few, very large players, is antitrust law."
As for due diligence, this is what Glassie recommends:
- Dust off the antitrust policy and make sure that it's updated and applied. It should be part of board books and any relevant committee meetings as part of the agenda and minutes.
- Be especially diligent that any surveys or research on prices, fees, salaries, or other sensitive areas are performed and released appropriately. (See Statement 5 in "Statements of Antitrust Enforcement Policy in Health Care.")
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Comments
This was really valuable to share with us! One thing I really miss from serving in staff positions is knowing developments in the general GR area since I no longer have a colleague sitting with me in management team meetings to share these developments!
Posted by: Kevin Whorton | May 19, 2009 6:47 AM