To Settle FTC Charges, Two Trade Associations Agree to Eliminate Rules that Restrict Competition

An association representing electricians and another representing skating teachers have agreed, in two separately settled actions, to eliminate provisions in their bylaws that the Federal Trade Commission charged limit competition among each association’s members.

The settlements with the not-for-profit Professional Lighting and Sign Management Companies of America, Inc. (PLASMA) and Professional Skaters Association are the latest FTC enforcement actions challenging restraints on competition contained in membership rules or ethics codes of professional and trade associations. 

The FTC’s complaint against PLASMA alleges that its bylaws restrain competition by: 1) prohibiting members from providing commercial lighting or sign services in the designated territory of another member unless that member declines to perform the work; 2) imposing a price schedule on work performed in the designated territory of another member; and 3) barring former members from soliciting or competing for clients of current members for one year after leaving the group. The FTC alleged that the purpose and effect of these bylaws has been to restrain competition by discouraging and restricting competition among PLASMA members.

The proposed consent order settling the FTC’s charges requires PLASMA to revise its bylaws, publicize its settlement with the FTC, and implement an antitrust compliance program.

In a separate complaint, the FTC charged that the Professional Skaters Association, through its code of ethics, broadly bans members from soliciting other members’ students, and thereby deprives consumers of the benefits of competition among the 6,400 ice skating teachers and coaches who are members.

The association requires members to abide by its code of ethics, which states, “No member shall in any case solicit pupils of another member, directly or indirectly, or through third parties.” According to the complaint, the PSA instructed its members that this code provision prohibited coaches from many types of direct and indirect communications with skaters and parents, and actively enforced the ban through a variety of penalties, including suspension, even over the objections of skating students and their parents who wanted to switch coaches.

The proposed consent order settling the FTC’s charges requires the Professional Skaters Association to stop restraining its members from soliciting work and competing on the basis of price. It also requires the group to change its code of ethics, publicize its settlement with the FTC, and implement an antitrust compliance program.

The Commission votes to issue the administrative complaint and accept the proposed consent order for the Professional Lighting and Sign Management Companies of America, Inc. and the Professional Skaters Association for public comment were both 5-0.

The FTC will publish the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through January 22, 2015, after which the Commission will decide whether to make the proposed consent orders final.

Comments on the Professional Lighting and Sign Management Companies of America, Inc. matter and the Professional Skaters Association matter can be filed electronically, or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

NOTE: The Commission issues administrative complaints when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues consent orders on a final basis, they carry the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.