Two Recent FTC Cases Demonstrate the Antitrust Risk of Association Codes of Ethics

The Federal Trade Commission (FTC) recently entered into consent orders with the Music Teachers National Association (MTNA) and the California Association of Legal Support Professionals (CALSPro). The consent orders highlight how trade and professional association codes of ethics can raise competitive concerns no matter the size of the association. Together, they demonstrate that codes of ethics (and other similar membership restrictions) can raise potential antitrust concerns if they limit the ability of members to compete, reduce prices, increase output, engage in truthful competitive advertising, or recruit the employees of rivals.

We provide below a brief overview of the two consent orders, highlight the relevant antitrust risks of codes of ethics, and discuss certain best practices that an association can take to minimize potential antitrust (and other) legal risks in connection with such codes. In particular, any association that is considering adopting a code of ethics should first determine what it hopes to accomplish through such a program, and then ensure that the program is designed to minimize potential legal risk.

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Topics:  Antitrust Provisions, Code of Conduct, Ethics, FTC

Published In: Antitrust & Trade Regulation Updates, Business Organization Updates, Nonprofits Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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