The Home Builders Association of Greater Austin (HBA) is committed to conducting its affairs in strict compliance with antitrust laws. The HBA expects that no HBA-related activities shall create even the appearance of a violation of the letter or spirit of the antitrust laws. Below is a brief, general, non-legal overview of the antitrust laws, and the HBA’s Policy on antitrust compliance. If you have any questions concerning this Policy, you are encouraged to contact Info@HBAaustin.com. If you have any questions regarding Antitrust Laws, you are encouraged to contact a licensed attorney competent to practice in this area.
Overview of Antitrust Laws
“Antitrust laws” include a number of federal and state laws that foster competition and free play of market forces. Like all other trade associations, the HBA has to pay particular attention to these two Acts:
- The Sherman Act: Section 1 makes unlawful every contract, combination or conspiracy in unreasonable restraint of trade or commerce.
- The Federal Trade Commission Act: Section 5 makes unlawful unfair methods of competition in, or affecting, commerce.
These Laws prohibit “joint action” between or among competitors in unreasonable restraint of competition, and they presume that certain joint actions always have an unlawful effect. The joint actions presumed to restrain trade to an unreasonable degree are considered unlawful as a matter of law (aka per se). Other joint actions are subject to the commonly referred to “rule of reason”. While not unlawful per se, they may invite antitrust scrutiny. The rule of reason requires a balancing of several factors, including but not limited to, the business reasons for the joint action, the degree to which it reduces competition, and any “pro-competitive” effects it may have, including any efficiencies it may yield (e.g., lower prices or improved quality). Antitrust enforcement authorities and the courts generally assume that all of the members of a trade association are competitors.
Per Se Violations
It is critical to avoid the following activities because Antitrust Laws presume these activities always unreasonably restrain competition.
Price Fixing: It is always unlawful for competitors to reach an agreement or understanding about prices, whether it is to raise, lower or stabilize prices. The same restriction applies to agreements and understandings regarding certain other terms and conditions of sale that affect price, such as discounts, payment terms, credit and allowances. It is unlawful for competitors to reach any agreement or understanding regarding bidding or refraining from bidding. Competitors should never discuss prices, profit margins, construction factors, discounts or credit terms for any particular company or project, future intentions regarding any of the above, non-public price schedules or notices of price changes.
Allocations of Territory, Customers or Products: It is always unlawful for competitors to reach an agreement or understanding about any division or allocation of markets or territories; any division or allocation of the customers for whom competitors will work; or any competitor’s volume of work or any restrictions on the volume of work anyone intends to perform.
Boycotts: A boycott is an agreement by any two or more parties to deny business, supplies or other competitive advantages to a third party. Boycotts frequently involve agreements between competitors to coerce their customers not to deal with another competitor, or to deny access to crucial competitive resources. Boycotts are considered per se violations of the Antitrust Laws.
HBA Policy on Antitrust Compliance
The HBA conducts its affairs in strict compliance with the antitrust laws. No HBA activities shall create even the appearance of a violation of the letter or spirit of the antitrust laws. To assist in complying with antitrust laws, you should observe the following:
- Don’t discuss prices, pricing methods, terms or conditions of sale, territories or customers with competitors.
- Don’t discuss pricing practices or strategies with competitors, including methods, timing or implementation of price changes.
- Don’t discuss discounts or rebates with competitors.
- Don’t discuss price advertising or cooperative advertising practices with competitors.
- Don’t discuss with competitors what is a fair, appropriate or “rational” price or profit margin for suppliers, distributors or retailers.
- Don’t agree with customers about minimum resale prices, or exert coercion on customers to resell at a certain price.
- Don’t discuss with competitors whether or not to deal with certain customers or in certain markets, countries or channels of trade.
- Don’t refuse to sell one product to a customer unless it agrees to buy a second product or service.
- Don’t discuss with competitors, suppliers or customers cutting off or not dealing with certain companies.
Nothing in this Policy is meant to be construed as legal advice. If you have questions, you should contact a licensed attorney competent to practice in this area.