The American Lighting Association (“ALA”) is a trade association representing the residential lighting industry, serving members and their customers, and working to protect and advance the industry while promoting the sale and proper application of quality lighting products.
Because ALA members compete in the residential lighting industry, ALA activities are subject to the antitrust laws. To ensure that ALA members and staff understand these legal requirements, ALA takes the opportunity, through this statement of policy, to make clear its intent always to comply with the antitrust laws and to reiterate ALA’s existing policy that ALA members and staff must comply with the antitrust laws in connection with all ALA events, programs, and other activities.
I. Trade Associations & General Antitrust
Trade associations perform an important pro-competitive function. They research and promote industry best practices, gather technical and trade information, and often represent the industry to the government and the public. At the same time, all trade associations inherently create some degree of antitrust risk because they bring competitors together for meetings and discussions.
Because antitrust violations can lead to harsh penalties for a trade association and its members, antitrust compliance is important to protect both ALA and its members from liability. Antitrust violations are punishable by criminal and civil penalties including jail sentences of up to three years for individuals and fines of up to $10,000,000 for corporations and $350,000 for individuals. In addition, the government can seek a wide range of other monetary relief. In the United States, the government has frequently obtained penalties for antitrust violations in the hundreds of millions of dollars. The costs of antitrust violations do not end with government action. Private parties often sue for treble damages, plus court costs and reasonable attorneys’ fees. Such private actions often follow on the heels of criminal investigations. Even a successful defense against private plaintiffs may cost many millions of dollars and constitute a significant disruption to business operations.
II. Examples of Areas Raising Antitrust Concern
Below are general categories of conduct that may raise antitrust concerns. These categories are general in nature and cannot address all of the possible antitrust issues that may arise in connection with association activities. These categories are not intended to be a substitute for specific legal advice.
A. Price. Agreements among competitors to fix prices are generally per se illegal, meaning there is no legal justification for such an agreement. Price fixing includes any agreement or understanding among competitors to raise, lower, stabilize, maintain or otherwise affect prices. It does not matter that prices are decreased rather than increased, that prices are stabilized, or that the agreed upon prices are reasonable. An agreement to fix prices need not be formal or written to be illegal; an informal or “gentlemen’s agreement” also violates the antitrust laws. Moreover, an illegal price fixing agreement can sometimes be inferred solely from circumstantial evidence. Participants in a price-fixing conspiracy can be subject to criminal liability, to include jail time. Members should never discuss prices with competitors or engage in conduct that could be interpreted as price fixing.
B. Standardization of Terms and Conditions. ALA members should not discuss or agree to terms and conditions of bidding or sale. Such agreements may be just as illegal as agreements upon price. Members should not discuss or agree to discounts, credit, promotions or advertising, services, delivery, or other terms or conditions of competition.
C. Standardization. Associations may create standards, provided such standards are properly developed and administered. Antitrust counsel should be consulted before any standards are implemented.
D. Bid Rigging and Allocation of Markets and Customers. It is also per se illegal for competitors to agree to bid or not bid, divide or to allocate bids, territories or customers. ALA members should never discuss or agree to allocate bids, geographic areas, or customers. In addition, ALA members should not agree to bid only certain prices to competitors’ customers or not to solicit those customers.
E. Group Boycotts. It is generally unlawful for competitors to enter into an agreement to refuse to deal with certain customers or suppliers. Although each member has a legal right refuse to deal with whomever it chooses, this right must be exercised independently. Members should never suggest to competitors that they should not sell to or buy from another entity. Before developing or implementing “policy statements” that call upon customers or suppliers to deal with members in a uniform or specified way, members should consult with legal counsel. Such agreements may raise antitrust concerns.
F. Sharing Confidential Competitively-Sensitive Information. Because an anticompetitive agreement can be inferred from the sharing of competitively-sensitive information in some circumstances, ALA members should never disclose competitively-sensitive information to competitors. Competitively-sensitive information includes, but is not limited to: non-public price information; future pricing plans; cost information; margin information; future strategic plans; bidding plans, including whether or not a company will bid for a particular opportunity; plans to enter or exit any market, or expand or reduce the production of any product; and wages, salaries and benefits for employees and independent contractors. If there is doubt about whether particular information is competitively-sensitive, consult antitrust counsel before disclosing it.
Upon receipt of notification, antitrust counsel will notify ALA leadership of the general nature of the concern and determine the appropriate course of action to ensure compliance with the antitrust laws. It is the policy of the ALA always to comply with the antitrust laws.
III. Antitrust Compliance Rules and Practices
To ensure that the ALA’s activities are conducted in full compliance with the antitrust laws, the following practices should be followed:
1. ALA staff should be kept informed of all organization activities.
2. ALA staff should review agendas, meeting minutes, significant correspondence and publications before they are sent out to members or the public. Where ALA staff perceives there may be antitrust risk in connection with any document, ALA staff should consult ALA’s antitrust counsel.
3. ALA staff should attend all association meetings. Any activity raises antitrust concern should be brought to the attention of ALA antitrust counsel as soon as practicable.
4. Written agendas should be created for each meeting and distributed to attendees in advance. Approved agendas should be followed and minutes should be taken. Generally, subjects not reflected in the agenda should not be discussed unless they are clearly proper.
5. In addition to complying with the antitrust laws at all times, ALA members and staff should also avoid the appearance of anticompetitive activity. To that end, members are expected follow the following guidelines.
a. Never discuss prices or other conditions of bidding or sale with competitors or other ALA members.
b. Avoid informal meetings, particularly where ALA staff or legal counsel is not present.
c. Do not discuss or take collective action against competitors, suppliers, or customers. If questions about this rule arise, members should contact ALA antitrust counsel.
d. Take special care to be accurate when drafting articles, blog posts, or internal trade association correspondence, including all forms of electronic communication. Be aware that internal communications are often discoverable in the event of an investigation or litigation. Use words with care.
e. Immediately and firmly object and stop the discussion if a prohibited topic is being discussed. Immediately and conspicuously withdraw from the group if discussion continues. Report any conduct or discussions that may violate this policy to ALA antitrust counsel. Mere silence is not enough.
f. Always make independent business decisions on important issues such as price changes, the decision to bid or not bid and on what terms, or whether to deal with a particular supplier or sales platform.
The antitrust laws and government enforcement policies may change from time to time based on new court decisions or other events. In addition, nearly every state has its own antitrust laws, which may differ from the federal antitrust laws. Accordingly, ALA staff and members should consult ALA antitrust counsel when potential antitrust concerns covered by this policy arise.
Enacted: June 21, 2019
American Lighting Association, Board of Governors