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You are here: FTC Settles Antitrust Enforcement Action with NAMM

FTC Settles Antitrust Enforcement Action with NAMM

FTC Settlement with Music Trade Group Shows Need to Harp on Antitrust Compliance

Sidley Austin
Antitrust Update
March 10, 2009
This Update reviews the FTC’s settlement with the National Association of Music Merchants (“NAMM”) which [citing the Update] illustrates the “importance for trade associations of having comprehensive antitrust compliance policies addressing various contigencies [and] that awareness of limits on proper conduct imposed by the antitrust laws is important in planning as well as conducting association meetings.” The FTC had alleged that NAMM addressed industry concerns about increased retail price competition by arranging meetings and programs where instrument retailers were permitted and encouraged to discuss competitively sensitive information, in particular “strategies for implementing minimum advertised price policies, the restriction of retail price competition, and the need for higher retail prices.” The FTC further alleged that these meetings “served no legitimate business purpose and resulted in no significant efficiency benefits [but] could facilitate the implementation of collusive strategies among competitors – conduct that would harm consumers.”

The consent order, which expires in 20 years, (i) bars NAMM from coordinating the exchange of price information among musical instrument manufacturers and dealers, or coordinating certain discussions concerning the conditions under which any manufacturer or dealer will buy or sell products(ii) prohibits NAMM from aiding musical instrument manufacturers or retailers to form an anticompetitive agreement and (iii) requires NAMM to implement an antitrust compliance program. NB Consent orders are for settlement purposes only and do not constitute an admission of a law violation.