Practice Management Member Conversations

I have been invited to say a few words about the antitrust laws, and why e strictly control discussions that center on fees or other pricing matters.  I welcome this opportunity, since in the past the Institute and some of its members have been the subject of two antitrust actions by the U.S. Department of Justice and one lawsuit by a private individual.  The AIA did not prevail in any of those proceedings, and one of these cases resulted in the 1990 consent decree that many of you will remember.

1. Federal antitrust laws are designed to promote vigorous and fair competition, and to provide American consumers with the best combination of price and quality.  Most states and the District of Columbia have their own antitrust laws, which frequently (although not always) parallel the federal laws.
   
2. Antitrust violations are felonies, punishable by imprisonment and fines.  The U.S. Department of Justice is authorized to prosecute Sherman Antitrust Act violators as criminal felons, who may be severely fined and, in the case of individuals, imprisoned for up to 10 years.  In addition, the Justice Department, state attorneys general and private parties may bring civil suits and recover three times (treble) their actual damages, court costs and (in private suits) their attorneys' fees from corporations and individuals who have violated the federal antitrust laws.  The Federal Trade Commission has its own statutory authority to enforce antitrust laws through civil and administrative proceedings.
   
3. The most common antitrust violations of which you should be aware fall within Section 1 of the Sherman Act.  They result from agreements - typically with competitors, customers or suppliers - that unreasonably restrain competition.  Thus, the antitrust laws prohibit the AIA and its members from agreeing to do certain things that they could legally do if they acted independently.
   
4. Any type of agreement, understanding or arrangement between competitors, whether written or oral, formal or informal, express or implied, that limits competition is subject to antitrust scrutiny.  Moreover, any attempt to reach such an agreement may be unlawful, even if it is unsuccessful.  Even discussions that are innocently intended (e.g., about pricing - see below) may be viewed as part of an illegal attempt or conspiracy under the antitrust laws.
   
5. Any agreement between competitors on prices charged to others for products or services violates the antitrust laws.  Every direct price-fixing agreement is illegal, whether it is meant to raise, lower or just stabilize prices.  Agreements may be illegal as well even if they only indirectly affect prices because they involve such things as discounts, promotional allowances, standardization of customer or delivery services, or uniform credit terms and billing practices.  It is also illegal for competitors to agree on the prices they will pay for products or services sold by other persons, or to engage in collusive bidding practices (or "bid rigging").  As suggested above, in this context discussions about fees among architects - whether in person, by e-mail, in a discussion list serve, or otherwise - may be regarded as part of an attempt or conspiracy to fix prices in violation of the antitrust laws.
   
   There are other anticompetitive activities that go beyond the scope of this e-mail.  For more information, I encourage you to go to our Web site at http://www.aia.org/about/antitrust/. 
   
   If you have questions or would like to discuss further, I welcome your e-mails and telephone calls. 
   
   Jay A. Stephens
   Vice President and General Counsel
   The American Institute of Architects
   1735 New York Avenue, N.W.
   Washington, D.C. 20006
   (202) 626-7379
   jstephens@aia.org