APGA's Antitrust Warning and Guidelines

The antitrust laws are among the most important of the laws affecting business.  Their purpose is to preserve fair and honest competition.  Violation of federal (and many state) antitrust laws can carry serious criminal, and potentially crushing civil, penalties.  Violators are also subject to civil suits by injured parties, who can collect three times the damages that they can prove the violations caused.  Private plaintiffs may also recover attorneys' fees, which can be very substantial.

The greatest area in antitrust law is contact among competitors.  Any kind of agreement or understanding between or among competitors, formal or informal, oral or written, express or implied, regarding prices, terms or conditions of sale, volume of production, limitation of territories, or division or allocation of customers or product markets is illegal under the Sherman Act.  It makes no difference whether the parties to such an understanding believe in good faith that it was reached for "good business reasons" or even whether it was deemed necessary to combat anticompetitive conduct by others.

The proof of a conspiracy is often necessarily circumstantial.  That is, it can be inferred from surrounding circumstances and subsequent events.  No formal agreement has to be shown.  Consequently every contact and communication between competitors may be subject to close scrutiny in the event of an antitrust investigation.

Although trade associations such as the APGA are generally acknowledged to serve vital business functions, they are often combinations of competitors.  As such, they are inherently dangerous because the mere existence of the association supplies the element of "concert" or "combination" necessary to prove a combination in restraint of trade.  Clearly, most members of APGA are not direct competitors of each other, but some may be (e.g., for new load and for gas supply), and it is important for members to recognize as much.

It may also be especially important for representatives of APGA members to bear in mind that concerted action by buyers can run afoul of the antitrust laws, as well as concerted action of sellers.  While customers may legitimately band together for the purposes of pursuing administrative or legislative remedies which have the result of reducing prices for all, it does not follow that they can agree outside the context of pursuing such remedies to refuse to deal with certain sellers or to do so only upon terms agreed upon among the buyers.

Municipal entities enjoy a certain amount of statutory protection from damages liability under the federal antitrust laws, and they may be able to defend some activities based on the notion that their conduct is tantamount to "state action."  However, the "state action” defense is often inapplicable in cases involving concerted action or agreements, such as price‐fixing or tying.  Furthermore, neither the statutory protection of municipalities nor the "state action” defense is necessarily available to the APGA.

Representatives are urged to bear these things in mind when attending to APGA‐related business.  A good rule of thumb is to refrain from making any statement orally or in writing, that one would not wish to have repeated in court.  Comments that could prove particularly troubling would be any that could be construed to amount to an agreement to fix prices, to control output, or to boycott or price to destroy a competitor or to discriminate in pricing to similar customers.  Disparagement of competitors' product or services should also be avoided. 

If you have any questions about APGA's antitrust guidelines, please contact APGA at info@apga.org.