Group Allegedly Illegally Restrained Price Competition Among Conservation Professionals
The Federal Trade Commission today announced a proposed consent order with the American Institute for Conservation of Historic and Artistic Works (AIC) that would settle charges that the organization engaged in anticompetitive behavior by discouraging its 3,100 members from engaging in price competition. According to the FTC, the respondent's Commentaries to the Guidelines for the Practice of the AIC deems it "unprofessional behavior" to work at either reduced rates or at no charge, except under limited circumstances. In settling charges that the Commentaries invite anticompetitive behavior, AIC has agreed not to enforce these restrictions and to remove them from its Commentaries.
"While the FTC recognizes the importance of professional ethical guidelines, we also want to ensure that these codes do not incorporate provisions that harm consumers by restraining price competition," said Bureau of Competition Director Joe Simons.
Based in Washington, D.C., AIC is an association of professional conservators - individuals who manage, care for, preserve, or treat cultural objects, including artistic, historical, archaeological, scientific or religious objects. According to the Commission's complaint, AIC violated Section 5 of the Federal Trade Commission Act by acting as a combination of, and in agreement with, some of its members to restrain price competition among conservation professionals. The complaint alleges that in furtherance of this activity, AIC has adopted and maintained Commentaries to the Guidelines for Practice stating that: "the consistent undercutting of local or regional market rates should be understood to be an unprofessional practice," and "when damage to the cultural property is imminent, and funding is limited, a conservation professional may work at reduced fees or pro bono." According to the FTC, together these two statements mean that only in limited circumstances can a conservator work for free or at reduced fees, without this work's being considered "unprofessional behavior."
Under the terms of the proposed consent order announced today, AIC would be prohibited from maintaining or enforcing any policy, ethical rule, interpretation, commentary, or guideline that impedes or restricts price competition among conservation professionals, including, but not limited to, the provision of free or discounted services. The proposed order also states that within 90 days, AIC must remove all provisions that are inconsistent with its terms from AIC's Code of Ethics, Guidelines for Practice of the AIC, Commentaries, and Internet Web site. AIC also must publish revised versions of each of these documents.
Finally, the proposed order would require AIC to publish a copy of the order and complaint in its newsletter (AIC News) as well as on its Web site, indicated by a prominently placed link on the site's home page. The proposed order also contains other provisions to monitor AIC's compliance with the order's terms.
The Commission voted 5-0 to place the consent agreement on the public record. An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The proposed order will be subject to public comment for 30 days, until October 10, 2002, after which date the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint, proposed consent agreement and order, and an analysis to aid public comment are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, D.C. 20580, Electronic Mail: firstname.lastname@example.org; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.
(FTC File No.: 011-0244)
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Bureau of Competition