Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

FTC: Professional Associations' Ethical Codes Restrict Competition

By Diane Bieri, Jonathan Gleklen
April 02, 2014

On Dec. 16, 2013, the FTC announced consent decrees settling charges that two professional associations, the Music Teachers National Association (MTNA) and the California Association of Legal Support Professionals (CALSPro), had violated Section 5 of the FTC Act by using their respective codes of ethics to restrain competition among association members. (Agreements Containing Consent Orders for In the Matter of Music Teachers National Assoc., File No. 131-0118 and In the Matter of California Association of Legal Support Professionals , File No. 131-0205). Specifically, the Commission charged both organizations with banning members from engaging in core competitive activities, such as soliciting or offering discounts to other members' clients, or recruiting other members' employees without first notifying the competing member.

Interested in-house counsel should take note that there is a long history of antitrust enforcement against professional associations that attempt to restrict their members' ability to compete effectively in the marketplace in the name of maintaining ethical standards. Courts have upheld (or at least refused to condemn short of full rule of reason analysis) association codes that arguably have some connection to procompetitive benefits, such as improving quality or protecting customers. Yet courts and agencies have not hesitated to condemn rules that limit price competition or the “poaching” of clients. The FTC's actions against MTNA and CALSPro, for instance, serve as a reminder that counsel who advise professional or trade associations or individual association members should carefully consider the antitrust risks posed by overly restrictive provisions of association ethical codes, and take some simple precautions that can help members achieve their goals while avoiding antitrust problems.

Background

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Removing Restrictive Covenants In New York Image

In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?

Fresh Filings Image

Notable recent court filings in entertainment law.