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Antitrust Compliance Policy

TPRA is committed to complying with all applicable laws, including federal and state antitrust laws, regulations and guidance and foreign competition laws. This Antitrust Compliance Policy is offered as a guide on topics or conduct that should be avoided during association meetings and association-related activities that could give rise to potential violations of the antitrust laws.

 

I. Significant Penalties for U.S. Antitrust Violations
Penalties for violating federal and state antitrust laws are severe. Violations of the antitrust laws can have very serious consequences for TPRA, members, and participants, as well as the employees of TPRA.

A. Criminal Penalties
Antitrust violations can be prosecuted as felonies and violators can be fined and imprisoned. Additionally, an antitrust violation can result in extensive governmental restraints being imposed on TPRA and its activities, as well as the activities of the staff, members and members’ employers. Failure to obey such an order can result in penalties of as much as $10,000 per day as of the distribution of this policy.

B. Civil Penalties
In addition to governmental prosecution for criminal antitrust violations, TPRA, staff, members, or members’ employers may face a private antitrust action brought by competitors, consumers, or government officials. Civil penalties include payment by the defendant of three times the damages suffered by the plaintiff (treble damages) plus attorney’s fees.

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II. Anti-Competitive Conduct

Trade Associations, like TPRA, bring significant, pro-competitive benefits to their members, the industry, and the general public by promoting the topic of Third-Party Risk Management. TPRA brings together various individuals and groups to discuss and distribute technical and educational information about third-party risk. Associations like TPRA are comprised of competitors and, as such, discussions and conduct at association meetings and other activities are scrutinized by enforcement agencies (such as the United States Department of Justice, Federal Trade Commission, and state agencies) for potential anti-competitive violations.

 

It is critical that associations are not used for anticompetitive purposes. Those prohibited purposes include fixing prices, limiting output, excluding competitors from the third-party risk industry, allocating customers or territories, or facilitating the exchange of competitively sensitive information between competitors.

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It is also critical that an association avoids even the appearance of impropriety. An executive, officer, member, or staff of TPRA or an association attending an association meeting or activity at which competitors engage in illegal anti-competitive discussions may be held criminally and civilly responsible, even if the individual says nothing at the meeting. Attendance at the meeting or other activity may be sufficient to imply agreement with the discussions, making TPRA, the individual and the individual’s company potentially liable for antitrust violations. It is impracticable and impossible to identify each and every act that could arguably be considered an antitrust violation. The following recommendations may assist associations in recognizing potential problems.

 

A. Prohibited Anti-Competitive Conduct

Certain conduct is presumed to be illegal by the courts and is likely to be prosecuted as crimes. In general, members should avoid discussing or sharing information that is confidential or relates to competitively sensitive matters with other members. Members should also avoid conduct that could or does eliminate competitors from a market or limits their access to a market.

The following conduct must be avoided at any association meeting or activity:

B. Price-fixing

It is illegal for competitors to directly or indirectly fix, alter, peg, stabilize, standardize, or otherwise regulate the prices paid by customers. It is also illegal for a group of buyers to fix the prices they will pay for a product or service.

  1. The following topics must be avoided, as must any activity, recommendation, or other statement from an association that could directly or indirectly result in price-fixing:

    • prices, pricing methods, or formulas for computing prices;

    • pricing practices, strategies, or patterns;

    • pricing changes;

    • pricing differentials for different types, sizes, or quantities of products;

    • pricing floors or ceilings;

    • standardization or stabilization of prices;

    • terms or conditions of purchase or sale, including warranties, indemnification agreements, or other terms and conditions of sale affecting price;

    • discounts, rebates, service charges, or credit terms;

    • price advertising;

    • data on costs, profit margins, or other data that bear on price; and

    • what constitutes a fair or appropriate price or profit margin.

2. Bid-Rigging

It is illegal for competitors to agree not to bid, to bid non-competitively, or to agree on the method by which bids will be determined, submitted, or awarded, including:

  • who will or will not bid;

  • who will bid to particular customers;

  • who will bid on specific assets or contracts;

  • who will bid high and who will bid low;

  • the price firms will bid; and

  • exchanging or signaling the prices or other terms of bids.

3. Allocation of Customers or Territories

It is illegal for competitors to allocate or divide markets, territories, or customers, and the illegal conduct includes:

  • agreements to stay out of another’s territory;

  • agreements not to compete for a customer or business opportunity in exchange for a competitor also agreeing not to compete for a customer or business opportunity; and

  • agreements to allocate exports or imports.

4. Output Restrictions

It is illegal for competitors to fix, restrict, or limit the amount of product that is produced, or services provided, including:

  • restrictions on the design, production, distribution or marketing of products or product features;

  • agreements to restrict export or imports;

  • controls or limits on research; and

  • sharing company data on production, capacity, inventory, and sales.

5. Group Boycotts

It is illegal for competitors, suppliers, or customers to agree not to do business with other competitors, suppliers, or customers.

 

C. Potentially Anti-Competitive Conduct

Certain conduct could be deemed anti-competitive under certain circumstances. associations must strictly adhere to the following policies in order to limit potential liability for TPRA, the association, members, or members’ employers:

1. Membership Restriction

TPRA strongly endorses a policy to include all segments of the third-party risk industry in TPRA and the associations. Membership in an association must be open to anyone with an interest in third-party risk provided the individual/member complies with association policies, including this Antitrust Compliance Policy, and membership obligations.

2. Industry Standards, Certification Programs, and Technical Publications, Interpretations and Opinions

Industry standards, certification programs, and technical reports, interpretations and opinions generally are pro-competitive and lawful. However, they can be deemed anti- competitive if they are used to fix prices, restrain output, create boycotts, or exclude competitors from the market. associations must strictly comply with all rules, policies, and regulations instituted by TPRA regarding implementing, establishing, and/or recommending industry standards, certification programs, technical publications, and interpretations and opinions.

3. Statistical Reporting or Information Sharing

Programs associations may participate in or facilitate statistical reporting or information sharing programs if the collection and distribution of the information is structured in such a way that will minimize the risk that it will facilitate collusion among competitors. To reduce the anti- competitive risk associated with such programs, all programs must be reviewed and approved in advance by TPRA.

 

D. Miscellaneous Conduct that seems innocent should still be avoided if, when combined with other actions, it could contribute to a finding of anti-competitive conduct. The following conduct should be avoided due to their potential anti-competitive violations:

  1. complaints about the business practices of individuals or individual companies;

  2. discussions about the validity of any patent or the terms of a patent license;

  3. disclosure of confidential company plans regarding future product or service offerings;

  4. disparagement of a product or material;

  5. discussions regarding the pricing or bidding practices of any member or market participant;

  6. recommendations against the use of a product, material, or the services offered by a company or individual;

  7. control of the association or association committees or activities by any one group or any special interest group; and

  8. promotion of any specific commercial product, material, company, or individual.

 

III. Compliance with Antitrust Compliance Policy

All association officers, directors, members, and staff shall be required to review this Antitrust Compliance Policy and are responsible for familiarizing themselves thoroughly with the requirements of this Policy and any updates to it. Strict adherence with the antitrust laws and the Antitrust Compliance Policy is a condition of membership, appointment, employment, association or affiliation with TPRA and the associations. Any officer, director, member, employee, representative, or agent of TPRA or an association found in violation of the Antitrust Compliance Policy, the antitrust laws, or foreign competition laws shall be subject to strict disciplinary action, up to and including, immediate termination of membership, appointment, association or affiliation with TPRA or the association. TPRA and the associations reserve the right to take any and all reasonable and appropriate disciplinary actions against any officer, director, member, or staff who fails to comply with the Antitrust Compliance Policy in connection with their participation in TPRA.

1. Reporting of Potentially Anti-Competitive Activity

Any association officer, director, member, or staff with knowledge of activities believed to violate the Antitrust Compliance Policy or antitrust laws should, upon becoming aware of such activities, promptly report the matter to TPRA’s Board of Directors. Reports may be made anonymously. Reporters will not be penalized, sanctioned, or retaliated against in any way.

2. Association Board of Directors, Executives, Officers, and Staff Responsibilities

Association boards, executives, and officers are primarily responsible for implementation and enforcement of the Antitrust Compliance Policy. No association board, executive, officer, member, or staff has any authority to act contrary to the Antitrust Compliance Policy.

3. The following policies may be adopted by TPRA:

  • Association posting Policy on website.

  • Attach policy to annual membership application.

  • TPRA to update Policy every three years.

  • Annual certification for Board and Staff of reading and understanding policy.

  • Reporting to TPRA if any of the following happen: Anyone threatens to sue an association or TPRA;

  • Read an antitrust statement at each meeting/activity and include antitrust statement on each agenda (see below for more information).

  • Affirmative action if improper discussions or conduct occurs at association meeting or activity such as the following: If at any time during the course of any association meeting or activity, association executives or officers believe that the Antitrust Compliance Policy is being violated, or is about to be violated, they will advise the attendees as such and halt further discussion. If necessary, association executives and officers should request individuals violating the Antitrust Compliance Policy to leave the meeting or activity or terminate the meeting or activity if the discussion does not cease.

 

IV. Guidelines for Association Meetings and Other Activities

All TPRA meetings and activities, including conference calls and social activities, should be conducted in a manner that avoids the appearance of improper conduct. TPRA should follow regular procedures as noted below.

A. Procedures for All association Meetings

While TPRA meetings are largely technical or educational sessions and should not give rise to antitrust liability, associations should avoid any appearance of impropriety. As such, the following procedures should be followed:

  1. Written agenda will be prepared and distributed in advance of the meeting. The agenda will not include any subjects that are identified in the Antitrust Compliance Policy as being an improper topic to be raised at association meetings.

  2. The following Antitrust Statement will be printed on the agenda: “TPRA’s meetings and activities are subject to strict compliance with the Antitrust Compliance Policy (“Policy”) and the antitrust laws and shall be conducted in a manner that is consistent with the Policy and the antitrust laws. Each individual member and attendee at this meeting are responsible for knowing the contents of the Policy, and for complying with it. Copies of the Policy are found on our website.”

  3. At the opening statement of the conference the full statement should be read. At the beginning of each smaller meeting, such as Board Meeting, Member Meeting and Conference Presentation or similar the following should be read: “TPRA’s meetings and activities are subject to strict compliance with the Antitrust Compliance Policy (“Policy”) and the antitrust laws.”

  4. Discussions at the meeting should strive to be limited to agenda items.

  5. Accurate meeting minutes will be prepared for Board Meetings. The minutes should include the time and place of the meeting, a list of all individuals present and their affiliations, a list or description of matters discussed, actions taken with a summary of the reasons therefore, a record of any vote taken, and an indication when any individual leaves or joins the meeting.

  6. If at any time during the course of the conference, Board Meeting, or member meeting, association executives or officers believe that a discussion violates the Antitrust Compliance Policy, or may violate the Policy, they will advise the meeting attendees as such and halt further discussion.

 

If you have any questions or concerns with this Policy, please reach out to the TPRA CEO at Julie@tprassociation.org. 

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