DOJ Statement of Interest Offers Reminder for Trade Associations

Key Points From the DOJ Statement of Interest

The DOJ’s October 1 statement in In Re Pork Antitrust Litigation emphasizes that every information exchange, such as a survey of association members, can raise antitrust risks. The DOJ confirmed its position that “[the antitrust laws] look to the full circumstances to gauge anticompetitive potential.” They stated that “When competitors agree to exchange competitively sensitive information only among each other, it suggests that the information sharing will benefit only the competitors at the expense of consumers, workers, or other market participants… Modern advances have also enabled information sharing to take a more dangerous form than in the past, as greater amounts of information are exchanged more quickly, more frequently, and with increasing granularity.”

This Statement of Interest follows the DOJ’s withdrawal of the decades-old guidance for “safety zones” in information exchanges. The “safety zones” provided a framework within which certain information exchanges were presumed to be lawful. However, the DOJ’s withdrawal of this guidance indicates a shift towards a more case-by-case analysis, emphasizing the need for vigilance and proactive risk management.

Implications for Trade Associations

Trade associations often conduct surveys that benefit competition and efficiency among their members. But some types of surveys may pose antitrust risks:

1.  Price Competition: Information exchanges that could enable members to avoid price competition are particularly concerning. For instance, sharing detailed pricing information could lead to price-fixing arrangements, which are illegal under antitrust laws.
2. Customer and Supplier Preferences: Exchanges that help members identify customers or suppliers to prefer or avoid can also be problematic. Such practices could lead to market allocation schemes, where competitors agree to divide markets among themselves, reducing competition.
3. Employee Compensation and Recruitment: Information that affects employee compensation and recruitment in a way that impacts competition is another potential area of concern. For example, sharing detailed salary information could lead to wage-fixing agreements, while exchanging recruitment strategies could result in no-poach agreements, both of which can be illegal.

In every case, trade associations should seek out antitrust counsel to help them distinguish between procompetitive information exchanges that encourage growth, competition, and innovation, and those that may present antitrust risk.

The DOJ’s New Stance Has Several Insights for Trade Associations

1. Increased Scrutiny: Trade associations can expect increased scrutiny of their information exchange practices. The DOJ is likely to examine these practices more closely to ensure they do not facilitate anti-competitive behavior.
2. Need for Comprehensive Risk Assessments: Each survey and similar information exchange must be evaluated for its unique risks. This requires a thorough understanding of the potential competitive impacts of the information being exchanged. Trade associations must ensure that their information exchange practices comply with antitrust laws. This may involve seeking legal advice to navigate the complexities of these regulations.
   1. Conduct a comprehensive review of your current information exchange practices. Identify any areas where the exchange of information could potentially impact competition.
   2. Establish clear guidelines for the types of information that can be shared and the circumstances under which it can be exchanged.
   3. Consult with antitrust counsel to ensure that your information exchange practices comply with antitrust laws. Legal advice can help you navigate the complexities of these regulations and avoid potential pitfalls.
   4. Educate your members about the risks associated with information exchanges and the importance of compliance with antitrust laws. Provide training and resources to help them understand the potential competitive impacts of the information they share.

Conclusion

The DOJ’s Statement of Interest underscores the need for careful evaluation of every survey and information exchange for their unique risks. Trade association executives must take proactive steps to review their information exchange practices, implement risk management strategies, seek legal advice, educate their members, and monitor and review their practices regularly. By doing so, they can ensure compliance with antitrust laws and avoid potential legal pitfalls.

ArentFox Schiff’s Antitrust & Competition and Nonprofits & Associations groups regularly advise associations and other member-governed organizations on strategies for antitrust compliance that align with their business goals.