FTC Law Judge Upholds Price-Fixing Charges Against Interpreters Association

A price-fixing conspiracy by an organization representing professional conference interpreters forced the 1984 Los Angeles Olympics Organizing Committee to pay a higher rate for language interpreters and forced it to incorporate clauses calling for interpreters to be paid for canceled events and non-working days during the games. Then, in the summer of 1995 when the man who negotiated the 1984 Olympics interpreter contracts was working on contracts for the 1996 Atlanta games, he received an anonymous call threatening a boycott of the Atlanta games if he testified about his 1984 experience. Those are among the anticompetitive effects of rules adopted and strictly enforced by the International Association of Conference Interpreters’ (AIIC), according to an initial decision by Federal Trade Commission Administrative Law Judge James P. Timony. The rules set minimum daily rates and mandate a variety of working conditions for members. Judge Timony followed his decision by issuing an order barring the challenged rules and prohibiting other conduct that might lead to similar restraints.

Judge Timony’s decision upholds FTC charges against the AIIC, also known as Association International des Interpretes de Conference, based in Geneva, Switzerland, and its United States Region. AIIC represents interpreters who perform both simultaneous and consecutive language interpretation services at multi-lingual business meetings, seminars, conferences and other high-level meetings. The FTC issued a complaint against AIIC and its U.S. Region in October 1994, alleging they published and enforced various fee schedules, work rules and other restrictions that raised prices and reduced competition among professional interpreters in the United States. The trial on the case ended in April 1996.

According to Judge Timony, for more than 40 years, AIIC has set minimum daily rates to be charged by members, required that all interpreters at a conference be paid the same daily rate regardless of skill or experience differences, specified the length of the working day and the number of interpreters to be hired at a conference, and required payment for travel expenses, per diem, cancelled events, rest days and non-working days when the interpreter was away from his or her mandated professional address. AIIC rules also have restricted members’ use of portable equipment; barred commissions to intermediaries, package fees, exclusive arrangements, moonlighting for permanently-employed interpreters, and the use of comparative advertising and trade names; required members to have a professional address and to give three months’ notice before changing it; required charges for the recording of interpretation services and imposed limits on charitable work. (Judge Timony found that AIIC did not enforce the rules providing that interpreters shall not accept more than one assignment for the same period of time and prohibiting interpreters from performing services other than interpreting.)

“Each effective restraint was part of a scheme to raise prices,” Timony said, noting that members were paid AIIC’s minimum daily rate 90 percent of the time from 1988 to 1991. AIIC enforced the rules by issuing warnings and reprimands, and by carrying out suspensions and threatening expulsions. Interpreters’ fears of being blacklisted as price undercutters also forced adherence to rules, the judge found.

In addition, according to the initial decision, the effect of many of the rules was to make price undercutting easier to detect. For example, rules requiring that travel expenses and per diem payments be stated separately on contracts for interpretation would make cheating on them and on the minimum daily price easier to see, as would the requirement that fees be paid on an indivisible daily basis because it makes rates more standardized and comparable. The rules also favored AIIC local members, protecting them from outsiders by requiring interpreters to charge for their travel expenses when working away from their professional residence, Judge Timony found.

When the organizers of the 1984 Olympic games wanted to use student interpreters and pay for their airfare from Monterey, California to Los Angeles, they ran afoul of AIIC’s limits of free charitable work, which require members who provide their services free of charge to pay for their own travel expenses and subsistence. “AIIC’s restrictions on pro bono work deter entry by novice interpreters working without charge,” Judge Timony said. “Absent the rule, student or novice interpreters could seek to work without charge in order to gain experience and make contacts in the profession.”

Addressing changes AIIC made in its rules in 1992, whereby it changed mandates to advice and removed monetary conditions, Judge Timony said AIIC did so only after the FTC began investigating. Moreover, the judge said, AIIC has made clear that it continued to ensure and enforce member understanding of the rules and has not, in fact, abandoned its price fixing.

The initial decision also rejects AIIC arguments that the restrictions were for the health of interpreters and the quality of their work, stating that the respondents did not offer sufficient evidence to prove those points and that, in any event, the argument was irrelevant.

The order issued by Judge Timony would bar AIIC and its U.S. Region from creating, distributing or encouraging adherence to fee schedules for interpretation, translation or other language services performed in the United States (with certain exceptions for historical or publicly available information); entering into or maintaining any agreement to fix or raise prices for these services; suggesting that interpreters charge or pay a certain fee; discouraging or restricting how fees are calculated; and from restricting advertising by interpreters or language specialists. The order also would require the respondents to dismiss from a meeting of interpreters any person who brings up the topic of fees and to end the meeting if another person enters such a discussion.

Judge Timony’s order also would bar the respondents from entering into or promoting any agreement or plan to restrict workday lengths; the number of interpreters for given jobs; travel reimbursement terms, rates or discounts; the types of equipment used in performing language services; the number or types of services performed by interpreters in a given time period; exclusive employment arrangements or the use of trade names; the payment or receipt of commissions; and the use of package deals.

The order also would require the respondents to change their rules to eliminate provisions that would violate these prohibitions and to give a specifically worded notice about the order to all members, divisions and directors. In addition, the U.S. Region would have to end any affiliation with any organization of language specialists within 30 days of learning that it is engaged in, and has not ceased, conduct that would violate the prohibitions.

Finally, the order contains various reporting and recordkeeping provisions that would assist the FTC in monitoring the respondents’ compliance.

Judge Timony’s order is subject to review by the full Commission either on the Commission’s own motion or on appeal by the respondents. If not appealed within 30 days, it would become the Commission’s decision and order and would be effective 60 days after it is served on the respondents.

Copies of the initial decision and order, as well as other documents associated with this case, are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC Docket No. 9270)