Having an online platform like theLoop is a great resource. It allows you to share ideas with each other and learn from each other's experiences. However, having a platform for open discussion also means we must be vigilant in making sure we are not participating in pricing discussions. The federal government monitors trade associations very closely for violations of price and territory setting. Violating these laws will have a devastating effect on the organization. This is why it is our duty to ensure any platform we provide is free of these activities. I have asked our attorney to provide some information on Anti-Trust.
While Anti-Trust is a complex and a specialized area of law, discussions of how to develop a pricing strategy or the components that go into developing one’s price structure are generally permissible. However, discussions of the “proper” or “appropriate” price for a certain service or product must be avoided as they give the appearance of improper and illegal price fixing or collusion.
In addition to the very real legal risks (both for PPA and the individual photographers involved), such discussions are usually counterproductive as the relevant conditions that go into determining what the market for photographic services and products will bear are going to vary wildly based on a number of factors including location, experience, complexity of a shoot and client need – just to name a few.
The following material is an excerpt from PPA’s Antitrust Compliance Policy and Guidelines which may offer members on theLoop a more detailed explanation of this important issue:
Antitrust Laws Applicable to PPA
Among the federal antitrust laws of principal concern to PPA and its members is Section I of the Sherman Act, which renders illegal all "contracts, combinations, and conspiracies" in restraint of trade in interstate commerce. Section I is interpreted to prohibit only agreements that have the effect of unreasonably restraining trade. A violation of the law occurs when, upon examination of all the facts and circumstances surrounding the conduct in question, it is determined that trade is unreasonably restrained.
Certain activities are regarded by courts as unreasonable by their very nature and are considered illegal per se. When an activity is designated a "per se" antitrust violation, a conclusive presumption is created that the activity was engaged in for no other purpose than to restrain trade. Practices within the "per se" category include agreements to fix or set prices, fees, rates, or commissions, as well as certain kinds of agreements to boycott competitors, suppliers, or customers. Note that the concept of "price fixing" encompasses agreements not only to raise prices but also to lower or stabilize prices. Virtually any agreement, arrangement, or understanding among competitors that involves tampering with free market prices, fees, rates, or premiums is a per se antitrust law violation.
The Sherman Act prohibition applies to any anti-competitive agreement, whether written or oral, formal or informal, express or implicit. Only rarely is an anti-competitive agreement set out clearly in a written document. Antitrust liability is more often found by examining a course of business conduct from which a jury can infer the existence of an illegal conspiracy. The circumstances may be entirely innocent and lawful when viewed separately. But the same circumstances, when viewed in the aggregate, may be held to constitute an antitrust conspiracy.
Potential Antitrust Conflicts Affecting PPA Members
The legality of activities of associations and their members under the various antitrust laws is determined according to standards no different from those used to determine the legality of the activities of other persons or firms. Special problems do arise, however, from the basic nature of an association. Many of an association’s most fundamental policies and valuable programs directly impinge upon areas that could be construed as anti-competitive and therefore in violation of antitrust laws.
The essential principle, which should guide PPA policies, programs, and members in avoiding antitrust violations, is that no illegal agreements, arrangements, or understandings can be reached or carried out through the Association. Conduct that might give the appearance of an illegal agreement must also be avoided. Officers, directors, members, and staff of PPA must be alert to conduct that could fall into areas of antitrust concern.
In analyzing whether information to be exchanged at any Professional Photographers of America meeting or seminar could possibly be in violation of antitrust guidelines, two critical questions must be asked:
Could the information being presented affect the marketing and business policies (including competitive behavior) used by the attendees in their businesses?
Could the information being presented affect the independent business decisions of the companies or firms represented by the attendees?
As a general rule, if the answer to these two questions is yes, and if the exchange of information is intended to or results in an alteration of the competitive behavior of an individual company relative to setting prices, fees, rates, or commissions; or results in a boycott of competitors, suppliers, or customers, then it is prohibited by these guidelines. More specific guidelines are as follows:
Discussion or exchange of information at PPA meetings or seminars concerning future price information or future competitive positions of an individual company or companies is prohibited.
Information concerning the current experience of an individual competitor may, in some circumstances, be viewed as a means of "signaling" future pricing or business decisions. It is, therefore, potentially suspect, and should not be presented or exchanged without an affirmatively stated purpose that is consistent with current industry-wide data or experience.
Where an interpretation or analysis of information concerning past or current experience or prices is exchanged, the risk that collective action will be linked to future market conduct is substantially increased. The prediction of a trend and its implications is, as a general rule, a matter for individual and independent decision-making, and this fact should be made clear when such interpretation and/or analysis is presented.