It is the policy of ADA to comply with all applicable laws, including state and federal antitrust laws. Any activities undertaken on behalf of the Association by its staff, officers, directors, or members which violate the antitrust laws are contrary to Association policy. Moreover, ADA encourages prompt reporting of any conduct or proposed conduct that might raise issues under the antitrust laws, so that violations can be avoided or corrective action may be taken. Any matter raising possible antitrust issues should be reported immediately to ADA’s General Counsel and Compliance Officer, who is responsible for investigating these complaints. This Antitrust Policy has been developed to provide an overview of antitrust requirements and to set forth specific guidelines to assist in identifying and avoiding possible antitrust issues.
Overview of the Antitrust Laws
The antitrust laws are intended to foster and protect competition for the benefit of consumers. In that regard, the laws prohibit particular anticompetitive activities, and more generally those that unreasonably restrain trade. Many agreements among competitors may be viewed with suspicion under the antitrust laws.
Consequently, while the purpose of ADA is to promote the exchange of ideas and developments in the dental profession, and to promote the oral health of the public, it is, as a professional association, viewed by antitrust enforcement agencies as an organization of competitors whose collective activities may have the effect of lessening competition in the healthcare market.
Group activities of competitors—such as those conducted by a professional association—are inherently suspect under the antitrust laws, and associations are common targets of antitrust plaintiffs and prosecutors. For this reason, among others, ADA has developed this Antitrust Policy to provide a general overview of antitrust laws and specific guidelines to assist ADA in conducting its activities in conformity with antitrust laws.
The primary antitrust laws at the federal level are the Sherman Act, the Clayton Act, the Robinson-Patman Act, and the Federal Trade Commission Act. Basically, these laws, as well as the laws of the various states, prohibit monopolization; agreements, combinations and conspiracies in restraint of trade; and unfair or deceptive trade practices. Over the years, courts and enforcement agencies have found that the following practices, among other purported restraints of trade, are or can be violations of the antitrust laws:
- Price Fixing. Any agreements among competitors to set fees or prices are regarded as illegal, notwithstanding any rationale that may be asserted. Similarly, discussions about fees and prices, or any elements thereof, may be used as evidence of price-fixing or tacit agreements.
- Restrictions on Output. Agreements among competitors to control or limit the production or distribution of goods or services will be regarded as illegal.
- Agreements to Allocate Customers or Territories. Agreements among competitors to allocate, divide, or assign customers, territories, products, or services are also per se illegal.
- Boycotts and Refusals to Deal. Agreements among competitors to boycott or refuse to deal with specified suppliers, insurers, customers or competitors, or to exclude potential competitors from the market, are often found to be unlawful. This may include restrictions on membership and participation in shows or exhibitions, disciplinary proceedings and standard-setting activities, depending on the circumstances.
- Monopolization. Unfair and devious practices by individual competitors to drive other competitors out of the marketplace or to obtain a monopoly, or the use of illegally obtained market power to exclude competitors, may be found to be illegal. Aggressive competitive conduct by any competitor that obtains a dominant market position, whether through legitimate or illegitimate means, will be viewed with great scrutiny.
The consequences for violating the antitrust laws can be severe. Violations of the antitrust laws can be the subject of civil actions resulting in damages and injunctive relief, or criminal felony prosecutions leading to jail sentences, fines and substantial penalties of as much as ten years in prison and $1 million per violation. A successful civil plaintiff is entitled to recover three times his or her actual damages.
The antitrust laws can be enforced against associations, association members, and the association’s employees by both government agencies and private parties (such as competitors and consumers). As the principal federal antitrust law is a criminal conspiracy statute, an executive who attends a meeting at which competitors engage in illegal discussions may be held criminally responsible, even if he or she says nothing at the meeting. The executive’s attendance at the meeting may be sufficient to imply acquiescence in the discussion and to incur liability similar to those who actively participated in the illegal agreement.
The following guidelines do not purport to be exhaustive, but are intended to provide members and employees of the ADA with a list of conduct to which they should adhere:
- DO NOT discuss fees, prices, or rates, or features that can impact prices, such as discounts, costs, terms and conditions of sale, warranties, or profit margin. A price-fixing violation may be inferred from price-related discussions followed by parallel decisions on pricing by association members, even in the absence of an oral or written agreement.
- DO NOT exchange data concerning fees, prices, production, sales, bids, costs, customer credit, or other business practices unless the exchange is made pursuant to a well-considered plan that has been approved by ADA’s legal counsel.
- DO NOT engage in any collective activities with any competitors regarding business practices, including contracts, insurance plans, or conditions of practice, without consulting with legal counsel.
- DO NOT enter into or sanction any agreement that tends to restrict competition between members or within the profession generally.
- DO NOT agree with competitors to divide up customers, markets or territories.
- DO NOT agree with competitors to exclude, penalize, or refuse to deal with specified suppliers, vendors, potential competitors, or others.
- DO NOT deny any party the right to participate in any member benefits, programs, advertising, or expositions without obtaining the advice and clearance of legal counsel.
- DO NOT establish or agree to any membership restrictions, standard-setting, certification, accreditation, or self-regulation programs without the restrictions or programs having been approved by ADA’s legal counsel.
- DO insist that ADA meetings have agendas circulated in advance and that minutes of all meetings properly reflect the actions taken at the meeting.
- DO ensure that legal counsel is present at any meeting in which the subject matter may involve issues that are the subject of these Guidelines or that may be sensitive under the antitrust laws.
- DO leave any meeting, whether formal or informal, where subjects are being discussed that violate these Guidelines, and advise the attendees why you are leaving.
- DO ensure that ADA officers, directors, committee members, members, or staff do not hold themselves out as speaking or acting with the authority of ADA in cases when they do not, in fact, have such authority.
- DO ensure that you seek advice and counsel, either from your own counsel or from the staff and counsel of ADA, in any case where questions arise about the legal aspects of ADA’s activities or your individual responsibilities under the antitrust laws. Any questions about ADA’s antitrust policy should be directed to ADA’s Executive Director or General Counsel.
The antitrust laws prohibit competitors from engaging in actions that could result in an unreasonable restraint of trade. Above all else, association members should be free to make independent business decisions based on market conditions - not the prescriptions of the association. For purposes of these guidelines, each member should presume that every other member is a competitor or potential competitor until assured to the contrary.