Guide for Members of the Southern Society of Coatings Technology – SSCT Trade associations are subject to strict scrutiny under the many federal and state antitrust laws. One of the most powerful of these is the Sherman Act. Section 1 of that Act prohibits "contracts combinations or conspiracies… in restraint of trade." But by its very nature a trade association is a combination, such that there is no problem in proving the fact. This should serve as a signal to trade associations that they must proceed with extreme caution lest they be cited for antitrust infringements carrying stiff fines and jail sentences.
Responsibility for enforcement of the antitrust laws lies with the Department of Justice, the Federal Trade Commission and the over 40 states which have enacted antitrust legislation.
The federal government can be expected to bring civil and criminal felony cases each year against trade associations, including members and staff. Penalties are severe. Each individual can be fined up to $1,000,000 and each member corporation can be fined up to $100,000,000. Individuals are subject to
excess price charged.
From a practical standpoint trade associations should focus their concern on five principal antitrust problem areas. These are: price-fixing, division of customers, membership standardization and certification and industry self-regulation.
PRICE-FIXING. Price (defined broadly to
therefore government has evinced its greatest concern about violations and potential violations of the price-fixing prohibitions of the Sherman Act. A price-fixing violation can be inferred from the fact of similar price conduct by members, even though there is no written or oral agreement shown. If prices are fixed it is no defense that the prices set are reasonable or that the ends sought are worthy