January 7, 2014

FTC Finds Professional Associations' Ethical Codes Restrict Competition

Arnold & Porter Advisory

On December 16, 2013, the FTC announced consent decrees settling charges that two professional associations, the Music Teachers National Association (MTNA) and the California Association of Legal Support Professionals (CALSPro), had violated Section 5 of the FTC Act by restricting competition among association members through certain provisions in their ethical codes.

There is a long history of antitrust enforcement against professional associations of doctors, social workers, psychologists, dentists, lawyers, engineers, realtors, and others. These two recent consent orders serve as a reminder that professional associations and their members should carefully consider the antitrust risks posed by provisions of ethical codes that serve to limit competition among members. While the courts have upheld association codes that arguably have some connection to procompetitive benefits, they have not hesitated to condemn rules that limit price competition or the "poaching" of clients. The FTC's actions against MTNA and CALSPro fit comfortably within that precedent, and serve as a cautionary tale for associations and their members that are not well-counseled on antitrust risks.

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