Ethics Codes Done Right: Avoid Antitrust Risk

Ethics Codes Done Right: Avoid Antitrust Risk

By: Andrew E. Bigart, Jeffrey S. Tenenbaum, and Robert P. Davis

In a pair of recent cases, the Federal Trade Commission determined that two associations' codes of ethics restrained competition in their professions. Associations that have, or plan to adopt, an ethics code can minimize their antitrust risk by following several best practices.

Trade and professional association codes of ethics can raise competitive concerns no matter the size or focus of the association. That fact was demonstrated recently when the Federal Trade Commission (FTC) entered into consent orders with the Music Teachers National Association (MTNA) and the California Association of Legal Support Professionals (CALSPro), finding that their codes had the effect of restraining competition. Together, the two consent orders demonstrate that codes of ethics (and other similar membership restrictions) can raise antitrust issues if they limit members' ability to compete, reduce prices, increase output, engage in truthful competitive advertising, or recruit rivals' employees. ...