Tradeshows are great opportunities to meet new contacts and reconnect with old friends. They are also a good time to see what your competitors are bringing to market, and they present plenty of opportunities to run into many old friends. Because ours is a tightknit industry, many of those old friends may now likely be competitors. When competing companies with friendly ties are close together, there is a potential for discussions and dealings that run afoul of antitrust regulations.
Some of the more common problems arise where companies make deals that try to distort competition, such as rigged bidding or pricing cooperation—actions where the end-consumer is arguably harmed. Other prohibited conduct that is more common includes agreements to price caps or efforts to divide a particular market or region. Agreeing to common credit terms or not to deal with particular suppliers can also be problematic.
The solo activities of a company can also be an antitrust violation, for example, where companies require their customers to set minimum pricing or mandated tied-sales. Biased terms for payment, delivery or conditions of sale among customers without a reasonable commercial justification can violate antitrust laws. So, too, can deceptive advertising or sales literature that is offered without support for its representations.
Penalties for violating antitrust laws are broad and severe. Criminal indictments of companies, as well as their officers and directors, are possible for the most serious violations. Civil penalties and triple-damages are also a statutory reality. And, given that antitrust violations can be alleged by the government or competitors, all companies should be knowledgeable about the potential for antitrust violations.
Defending against an antitrust claim can take years of litigation expenses. In the face of such stiff penalties and costs, does your company take the time to educate sales personnel on the potential for antitrust violations? Post a comment, review this week’s poll or send an email with your thoughts. And, you can read more about antitrust risks in the most recent Legal column in the September issue of Window & Door magazine.
Survey Results for 09/21/2016: Does your company educate sales staff about antitrust regulations?
No. I don't think we need to.
Yes. We educate our personnel and keep our legal advisor close for particular deals when they arise.