ISA – The Association of Learning Providers

VALUE & ANTITRUST GUIDELINES

ISA Values

ISA member companies collaborate to promote business interests and the growth of the training and performance industry.

  • ISA believes active recruitment of people from member companies violates the good faith of the Association.
  • ISA member companies respect the intellectual property rights of their customers and all other firms.
  • ISA member companies agree to respect the copyrights and intellectual property of ISA member firms.
  • ISA membership expects company principals to regularly participate in the life of the Association.
  • ISA member companies serve customers with integrity and respect customer confidentiality.
  • ISA member companies understand and agree to adhere to Antitrust Guidelines.
A Brief Summary of the Antitrust Laws

ISA has a policy of strict compliance with federal and state antitrust laws. ISA members should avoid discussing certain subjects when they are together – both at formal ISA meetings and in informal contacts with other industry members – and should otherwise adhere strictly to the guidelines that follow. If you are confronted with a sensitive antitrust issue, you should consult with counsel.

The antitrust laws are intended to preserve competition by, among other things, prohibiting agreements, combinations and conspiracies in restraint of trade. As groups of competitors working together, trade associations are subject to particular antitrust scrutiny. This guide will provide some helpful background on the antitrust laws, focusing on antitrust issues of particular interest to the ISA – The Association of Learning Providers (“ISA”) and other trade associations.

There are four principal federal antitrust laws affecting trade associations and their members:

The Sherman Act prohibits agreements that unreasonably restrain competition, as well as monopolizing, or attempting to monopolize, a market through unfair means.

The Clayton Act prohibits certain specific types of conduct, such as specific exclusive dealing and “tying” arrangements, certain mergers that may harm competition, and certain interlocking corporate directorates.

The Federal Trade Commission Act generally prohibits the same practices barred by the Sherman and Clayton Acts, as well as practices that are unfair and deceptive, such as making false or misleading claims about a product or service.

The Robinson-Patman Act prohibits price discrimination under certain circumstances, other kinds of discriminatory practices, such as discriminatory promotional allowances, and unlawful brokerage payments.

In addition, every state of the United States has some form of antitrust law, which is usually interpreted and applied similarly to the federal laws (although some state laws have unique provisions). Moreover, activities in the United States and other countries may violate foreign antitrust laws.

The consequences for violating the antitrust laws can be severe – stiff fines and treble damages assessed on the association and its leaders, jail sentences for individuals who participated in the violation, and/or a court order dissolving the association or seriously curtailing its activities. Both government agencies and private parties such as competitors and consumers can enforce the antitrust laws.

Application of the Antitrust Laws

The following summary lists some of the conduct and arrangements that may be illegal under the antitrust laws. Some activities by competitors are deemed so harmful that they are considered per se, or automatically, illegal: price fixing and agreements as to terms of sale that could impact price; allocation of customers, markets or territories; bid-rigging; and some forms of boycotts. Other actions, such as standards development, certification and accreditation programs, and relationships between distributors and suppliers generally are evaluated under a rule of reason – pro-competitive justifications for the activity will be weighed against anti-competitive harm.

Many of the antitrust laws apply only to “concerted” action or “agreements.” However, an illegal agreement can be found even without a “handshake” or express words or writings indicating agreement. Tacit understandings, including responding to pressure, exerting pressure, or doing “what is expected,” can be sufficient. YOU CAN VIOLATE THE ANTITRUST LAWS BY AN INFORMAL VERBAL OR IMPLIED UNDERSTANDING, AND IN SOME CASES BY MERE PARALLEL CONDUCT. NO WRITTEN CONTRACT OR EXPRESS AGREEMENT IS REQUIRED.

The antitrust laws apply to trade associations just as they apply to any individual company or group of competitors. Members should always avoid conduct which would violate the antitrust laws in the ordinary course of business, such as:

Price-Fixing, Bid-Rigging and Resale Price Maintenance, which are per se illegal;

Group Boycotts, which also are generally per se illegal;

Tying and Reciprocity, or the sale of one service or commodity on the condition that the customer also must buy some other service or commodity from the seller, which may be illegal under certain circumstances;

Exclusive Dealing Agreements, which provide that a buyer will purchase its full requirements from a single seller or that a seller will commit its output to a single buyer, also may be illegal under certain circumstances;

Price Discrimination, which is often illegal under the Robinson-Patman Act;

Monopolization and Attempts to Monopolize; and

Unfair Methods of Competition.

Members also should be careful when participating in certain types of association activities that, if undertaken with an improper motive or executed improperly, may give rise to antitrust liability:

Membership. Exclusionary association membership practices that affect a competitor’s ability to compete in the market may raise antitrust issues. Denial of membership or discrimination in membership terms may place competitors at a disadvantage. Even competitors who choose not to join ISA must have access to any membership benefits that are necessary to effectively compete in the market (if any) upon payment of a reasonable fee.

Information Exchange, Data Collection, and Dissemination. Because of the risk that information collected as part of a legitimate information exchange program could be used for unlawful purposes (such as price-fixing), special precautions must be taken in structuring and participating in data collection programs. Consult counsel prior to initiating such a program.

Standard-Setting, Certification and Self-Regulation. Trade associations often adopt industry “codes of ethics” that their members must follow, or engage in certification or standard-setting programs. Any certification or self-regulation program must be based on sound, objective justifications; must be reasonably related to the goals it is intended to achieve; must be no more extensive than is necessary; and must incorporate reasonable procedural safeguards and due process. To the extent that ISA participates in standard-setting activities, it must take care to be inclusive of non-members who want to participate; all opinions should be considered and a sound technical basis for any position should be articulated (and reviewed over time as necessary). Moreover, ISA and its members must disclose voluntarily any proprietary interest (e.g., a patent) they may have in a standard during the process.

Educational Presentations. Discussions at educational presentations should be limited to objectives that promote overall industry or consumer welfare. Written outlines and handout materials for presentations involving antitrust-sensitive topics should be reviewed by counsel prior to distribution and use.

Public Policy Advocacy. Legislative activity, litigation in the courts, and proceedings before administrative bodies intended to influence government policy do not generally violate the antitrust laws. However, “sham” lobbying intended to exclude competitors may be illegal.

Techniques for Complying with the Antitrust Laws

ISA expects members and employees to recognize antitrust risks and conduct themselves in compliance with the antitrust laws. What follows are some techniques that will help to safeguard against antitrust liability.

ISA Communications

Think carefully about how your communications with competitors and others may be perceived, and not just how they are intended. All letters, memoranda and e-mail written in connection with ISA activities should be written clearly so that they cannot be misinterpreted. Note that only ISA employees may send out ISA correspondence. Members should not hold themselves out as having authority to speak for ISA.

Conduct of Meetings

To avoid problems in this area, ISA recommends following these guidelines:

Notice and Agenda. A notice of the meeting and a draft agenda should precede each ISA meeting. Private “off the record” meetings should not be held in connection with any ISA meeting, program or activity.

Minutes and Other Documents. We recommend that after each ISA meeting, written minutes should be prepared and reviewed by ISA prior to circulation. ISA must be informed before any document that could be construed to raise antitrust considerations is circulated.

Meetings. At meetings, all participants should be afforded an opportunity to present their views. With rare exceptions that should be made only upon the advice of counsel, there should never be discussion of the following topics at any ISA meeting:

Any company’s individual prices or pricing policies, including: current and future prices, price increases or decreases; price stabilization; cash discounts; prices paid to input sources; credit terms; or what is a fair profit level;

Terms of sale, warranties or contract provisions;

Division of customers, territories or locations;

Specific R&D, sales or marketing plans, or any company’s confidential product, development or production strategies;

Complaints to or about individual firms or competitors or other actions that might tend to hinder a competitor from competing fully in any market; or discussions about whether to purchase from certain suppliers or sell to certain customers; or

Data concerning fees, prices, production, sales, bids, costs, salaries, credit, or other practices, unless the data in question is exchanged and disclosed pursuant to a well-considered plan that has been approved by counsel.

ISA meeting participants have an obligation to terminate any discussion, seek legal counsel’s advice, or, if necessary, terminate any meeting if the discussion might be construed to raise any antitrust risks.

Guest Speakers. Written outlines and handout materials for presentations by guest speakers involving antitrust-sensitive topics should be reviewed in advance by counsel. Guests should be identified as such in any agenda or minutes, and presentations should be briefly summarized.

Social Functions. Conduct at social events in conjunction with ISA meetings or otherwise should follow the same standards as regular meetings.

Other Areas of Concern

Membership. Membership policies and standards may implicate antitrust issues to the extent they unreasonably limit access to information or exclude would-be participants without sound justification. Reasonable requests from non-members for information, to attend programs, or to purchase or participate in certain other products, services or activities offered by ISA generally should be granted, subject to reasonable fees or charges. If unusual or unreasonable requests are made, counsel should be consulted.

Requests for Information/Investigations. Should you receive a request for ISA information or documentation from a government agency, private attorney, or other non-member, formal or informal, written or oral, make no substantive response before consulting with counsel.

“When in Doubt …” ISA and/or counsel should be consulted prior to any discussion of actions which could raise antitrust risks, or which seem in any way to be questionable or out of the ordinary. It is always better to ask first.

Conclusion

ISA is committed to complying fully with the antitrust laws. If you have any questions or concerns about any of the issues raised in this guide or by the conduct of ISA and its members, do not hesitate to contact ISA. Any contemplated conduct that may involve antitrust risk should be discussed before any action is taken.

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