Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Professional associations settle FTC charges of anticompetitive codes of ethics, (Aug 22, 2014)

By Greg Hammond, J.D.

Two professional associations—the National Association of Residential Property Managers, Inc. (NARPM) and the National Association of Teachers of Singing, Inc. (NATS)—have agreed to settle FTC charges that they limited competition among their respective members through provisions in their codes of ethics.

FTC allegations. The NARPM represents more than 4,000 real estate agents, brokers, and managers. The Commission alleged that the association restrained competition and violated the FTC Act by restricting advertising and solicitation of competitor’s clients in its code of ethics. Specifically, the Commission noted that the NARPM’s code states, “The Property manager shall not knowingly solicit competitor’s clients,” and “NARPM Professional Members shall refrain from criticizing other property managers or their business practices.”

The NATS represents over 7,300 vocal arts teachers in the United States. The FTC alleged that the association restrained competition and violated the FTC Act by prohibiting its members from soliciting students from other members in its code of ethics. The association’s code, according to the Commission, states that “members will not, either by inducements, innuendos, or other acts, proselytize students of other teachers.”

Proposed consent orders. The Commission announced that both professional associations agreed to proposed consent orders aimed at preventing the challenged restrains on competition from occurring in the future. Namely, the NARPM will be prohibited from restraining its members from soliciting property management work and from making truthful statements regarding competitors’ business, commercial practices, products, or services. Similarly, the NATS will be prohibited from restraining its members from looking for teaching work and from informing members that solicitation of students is unethical. The NATS will also be required to (1) acquire certificates from all of its chapters stating that they are not restricting advertising, price-related competition, or solicitation and (2) cut ties with any chapter that does restrict advertising, price-related competition, or solicitation. Both associations must also implement and follow and antitrust compliance program.

The Commission voted 5-0 in favor of accepting the proposed consent orders for public comment. The 30-day public comment period will expire September 22, 2014, at which time the FTC will determine whether final approval of the consent orders is appropriate.

Companies: National Association of Residential Property Managers, Inc.; National Association of Teachers of Singing, Inc.

News: Antitrust FederalTradeCommissionNews