CPCA Anti-Trust Policy
Group activities of competitors in trade associations require special attention to avoid any tendency to attempt even tacit agreements about joint activity, which could violate Canadian and foreign competition laws or which could lead observers to suspect such violations. Joint activity with competitors may be legitimate but should be subjected to legal review in advance of the preliminary discussion.
The Association’s Role
The best vehicle for enjoying the benefit of permitted contacts among competitors while avoiding the pitfalls of illegal arrangements is by belonging to a trade association or professional society which takes its obligations in this regard very seriously. These guidelines have been prepared to ensure that participants in all CPCA activities are aware of their responsibilities in this area.
Within an association, it remains the responsibility of each member in the first instance to avoid raising improper subjects for discussion.
One of the clearest antitrust violations an association can commit is an agreement by its members to set prices at a fixed level.
- Such a price-fixing agreement is a per se violation of the antitrust laws, even if the prices set are reasonable or the ends sought are worthy.
- Terms and conditions of sale which affect the buyer should not be discussed. These 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 among competitors are also clearly forbidden.
- ILLEGAL BOYCOTT Administrative or disciplinary action against member companies, or the expulsion of member companies, may result in economic injury to the affected members. This action against a member company may constitute an illegal boycott or restraint of trade, therefore, these sensitive areas must be discussed in accordance with strictly-defined legal guidelines should the situation arise.
Restraint of Trade
Frequently, an association engages in the voluntary development of a product specification or industry standard of quality.
- Anti-trust problems will arise if the industry standard developed advances the economic interests or operates as a marketing advantage for one or more members, to the detriment of others.
- Anti-trust infractions can arise if association- sponsored efforts to petition government agencies for action could be considered to have an adverse economic impact on certain competing companies.
- A delicate balance must always be maintained between the right to petition government and the antitrust laws' prohibition against restraint of trade.
- The right to petition does not protect parties which seek to prod government agencies into imposing trade restrictions by misleading them, or by engaging in other dishonest activities. Any effort designed to injure industry competitors is clearly prohibited.
CPCA Remains Aware
The proper conduct of association meetings requires an understanding and conscious awareness by all of anti-trust implications. Your non-participation in the discussion pro and con 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 judgement is exercised and no illegal common course of action is pursued. Antitrust laws are wide-ranging, complex, and subject to changing interpretations. Consult your company's lawyer immediately if you have any questions about the legality of any proposed association action.
CPCA Honours the Four Association Anti-trust "DONT'S"
DON'T discuss prices your company will charge customers.
DON'T discuss discounts, terms of sale, warranties, profits or profit margins, market share, bids or the intent to bid, rejection or termination of customers, sales territories or markets.
DON'T discuss administrative or disciplinary action by the association against a particular member in the absence of specific legal guidance discuss any proposal that the association engage in any activity which may produce an adverse economic impact on some competing companies.
DON'T propose or discuss any proposal that the association engage in any activity which may produce an adverse economic impact on some competing companies.
Terms and conditions of sale which affect the buyer are not be discussed. These 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 among competitors are also clearly forbidden.
ILLEGAL BOYCOTT Administrative or disciplinary action against member companies, or the expulsion of member companies, may result in economic injury to the affected members and these sensitive areas can only be discussed in accordance with strictly-defined legal guidelines should they arise.