Antitrust

Central States Bottled Water Association Antitrust Policy

Introduction

The purpose of this guide is to assist all Central States Bottled Water Association members, officers and participation in gaining an insight into those portions of the Federal antitrust laws applicable to the day-to-day business and activities of the Association. While the focus of the antitrust laws is generally thought to be the private business community, these laws also apply to trade associations and their members. A trade association by nature is a combination of competitors which has the capacity to take actions that could result in illegal restraints of trade. Therefore, it is essential that all Association members familiarize themselves with the fundamental principals of antitrust laws. It is policy of CSBWA to comply strictly and in all respects with the antitrust laws. This guide focuses on Federal antitrust laws. While many states also have antitrust laws that may impact Association member businesses, compliance with Federal antitrust laws is usually a safeguard against violation of state antitrust statutes.

Basic Antitrust Laws

Portions of two of the principle laws are applicable to trade associations: Section I and 2 of the Sherman Act which prohibit contracts, combinations and conspiracies in restraint of trade and the prohibition of monopolization and attempts and conspiracies to monopolize, and Section 5 of the Federal Trade Commission Act, which establishes broad prohibitions against unfair methods of competition and unfair or deceptive business acts or practices. These laws speak in somewhat general terms, and it is often difficult to know whether a certain course of action or practice specifically violates the law. The basic principles set forth in this document are intended, therefore, to assist in conforming the practices of the Association to the requirements of the law.

The Principle of the CSBWA Antitrust Guide

  1. Price fixing and boycotts, express or implied, are in and of themselves violations of the law. This includes discounts, freight allowances, terms of warranties, etc. Price fixing may be between competitors or between suppliers and customers as to resale price. CSBWA will not knowingly countenance any discussion of prices at any Association meeting or other meetings of competitors to which it is party. Pricing agreements may be inferred; thus, even an appearance of such agreements must be avoided.
  2. CSBWA will not deny membership to a person or firm if such denial unreasonably restrains trade, nor will a member be expelled for reasons that would be insufficient to deny it membership.
  3. Whenever CSBWA becomes involved in statistical reporting or the development of other surveys regarding business information, CSBWA will clearly spell out the report’s or survey’s purpose and use. All such reports and surveys will be designed to provide information to assist members in business decisions, will deal with past transactions and will be reported in composite, and will not restrict competition. Participation in statistical surveys will always be voluntary.
  4. Since antitrust problems arise when the effect of a standardization is to deprive customers of legitimate choices, to discriminate against competitors, or to fix prices or boycott supplies, all standards or guidelines participated in or developed by CSBWA will offer wide participation in their development by affected parties. All such standards shall have a reasonable basis. All technical standards shall be based on solid scientific data. The Association does not have reasonable membership criteria focusing, in part, on the appropriate sanitary and product safety standards that all members must meet. All other standards and/or guidelines are purely voluntary.
  5. Whenever collective research is undertaken by CSBWA are will be exercised so as not to unreasonably restrain competition. Attention also will be taken to see that no significant anticompetitive effects are realized.
  6. CSBWA will not sponsor or knowingly be a party to agreements, express or implied, which restrict the members’ freedom in any way to make independent decisions in matters that affect competition.
  7. Doubts about CSBWA programs or activities can be discussed with the Association Board, and also may be subject to consultation with the member’s own counsel.

Conduct of CSBWA Meetings

In order to avoid antitrust problems that otherwise might result from association sponsors meetings, attendees should be attentive to the following basis principles:

  1. It is the obligation of each CSBWA member to read and understand the CSBWA Antitrust Guide. It is the responsibility of the Board of CSBWA to enforce the Antitrust Guide at all CSBWA meetings and Association sponsored events.
  2. It is the responsibility of the Board of CSBWA to enforce the Antiturst Guide at all CSBWA meetings and Association sponsored events.
  3. All discussion of prices, sales, markets, warranty terms or other conditions of sale must be avoided.
  4. A detailed written meeting agenda should be prepared and agreed upon by the Board prior to each meeting. The agenda should be distributed to all CSBWA members in advance of the meeting if possible or strictly followed by meeting participants.
  5. Full and accurate draft minutes should be prepared by the Secretary soon after each meeting. The draft minutes should be distributed to all attendees for their comments. A final version of the minutes should be prepared and kept on file.

Conclusion

While it is impossible to cover every contingency that might arise, it is essential that Association members and the Board of Directors and the officers have at least a basic understanding of the Federal Antitrust laws.