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AntiTrust Guidelines
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Introduction

The International Titanium Association (ITA) is committed to ensuring that you, your company, and ITA fully comply with the relevant antitrust laws as they pertain to the activities of ITA. To that end, the following Guidelines have been prepared by counsel for ITA to assist you and other members of the ITA in understanding the antitrust laws and ITA’s special resolution regarding prices, capacity, and sales. These Guidelines are intended to go beyond the minimal requirements of the antitrust laws, and set ITA a higher standard than merely "getting by." It is your responsibility to familiarize yourself with these Guidelines and to comply with the antitrust laws. Antitrust compliance is important because the consequences of violations can be serious to ITA, your company, and to you. Violations of the Sherman Antitrust Act are felonies which can subject an individual to fines of up to $100,000 and to imprisonment for as long as three years, and subject ITA or your company to civil liability for treble damages and to injunctions that could impair your company’s ability to compete effectively. Please remember that ITA may be held liable for your activities at an ITA function or even elsewhere. Actions by an ITA member or officer that an outsider could reasonably assume were authorized by ITA may be interpreted by the courts to be an act of ITA, for which ITA bears legal responsibility.

 

Basic Principals of the Antitrust Laws

The antitrust laws reflect a national policy to preserve competition and prevent collusion in the marketplace. The principal and most important antitrust law that pertains to ITA is Section 1 of the Sherman Antitrust Act. It Provides: Every contract, combination… or conspiracy, in restraint of trade or commerce among the several states or with foreign nations, is hereby declared illegal. The thrust of this law is the prohibition of joint activity or agreements by competitors that unreasonably restrain trade or restrict the complete freedom of action of businesses in their respective operations. "Agreements" on such matters are not limited to written documents, and also include informal, unwritten, and even unspoken agreements or understandings. All such agreements and understandings are treated the same as written ones. In addition, illegal agreements can be established by circumstantial evidence, such as a pattern of conduct or mere presence at a trade association meeting. Over the years, the courts have liberally interpreted Section 1 of the Sherman Act so that the law prohibits a broad range of business practices. Some types of agreements have been strongly condemned by the courts and are vigorously enforced by federal antitrust authorities. For example, courts have interpreted Section 1 of the Sherman Act to prohibit all agreements among competitors to abide by any pricing formula that raises, lowers, fixes, pegs, or stabilizes prices, and all agreements among competitors to fix prices or divide markets or sales territories. There is no defense if the government proves the existence of an agreement among competitors to fix prices or divide markets. Competitors may not justify such agreements by arguing, for example, that the agreements were reasonable, or did not result in any increase in price, or were necessary to avoid cut-throat competition.

 

Please Keep In Mind

As applied to the business of ITA and its members, the key applications of Section 1 of the Sherman Act which you must keep in mind at all times are:

1. Officers or employees of competing companies in the titanium business may not agree to raise, lower, stabilize or fix prices or other terms and conditions for titanium. This is known as price fixing. Formal or informal agreements among competing titanium companies regarding the setting of price, capacity or production levels, or the submission or rigging of bids (including agreements to submit high, non-competitive bids, or agreements not to bid on certain contracts, or agreements to have certain contracts allocated to a particular company), are types of illegal price fixing prohibited by Section 1 of the Sherman Act.

2. Competing titanium companies may not divide or allocate customers, territories or portions of the market between themselves. This is known as market allocation and is prohibited by Section 1 of the Sherman Act. Market allocation may take many forms, such as allocation of specific percentages of the available titanium business among the titanium companies, designating or dividing the territories each particular titanium company may operate within, or allocating particular customers or particular types of production to certain titanium companies. All such activities are illegal.

3. Competing titanium companies may not agree to not sell to or not buy from or withhold products or services from certain individuals or firms. This is known as group boycott and is prohibited by Section 1 of the Sherman Act. As to ITA’s activities, the requirement means that ITA may not limit any significant competitive benefit of its programs solely to members. Among programs which usually confer important competitive benefits for participants for which ITA must make available to non-members are statistical reporting, certification, and trade shows. However, non-members can be required to pay a pro-rata share of the program’s cost.

ITA Special Resolution The members of ITA have also adopted a special resolution which goes beyond the restrictions of the antitrust laws and provides that ITA meetings and facilities shall not be used in any way to exchange information concerning the price of titanium. The resolution provides: No member of the International Titanium Association shall communicate to, or exchange with this Association, or use any of the Association’s meetings or facilities to communicate to, or exchange with anyone, information concerning the prices at which, or terms or conditions upon which, titanium products are or have been sold or offered for sale, or may be sold or offered for sale in the future. A violation of this Resolution shall be grounds for suspension or expulsion from this Association.

 

Compliance Guidelines

In order to help you comply with the antitrust laws and the special ITA Resolution, ITA has formulated as association policy the following compliance guidelines in the form of DO’s and DON’T’s which you are to follow. These guidelines are not meant as statements of what the law is, but rather are the rules of ITA which each person associated with ITA should follow:

1. DO remember that it is the responsibility of each member in the first instance to avoid raising improper subjects for discussions.

2. DO adhere to prepared agendas for all meetings and object when meeting minutes do not accurately reflect the matters which have transpired.

3. DO understand the purposes and authority ( and limits of authority) of each group in which you participate.

4. DO consult with ITA’s counsel and/or your company counsel on all antitrust questions relating to all meetings.

5. DO report any violation of these Guidelines or ITA policy to ITA’s counsel or its Executive Director.

6. DO protest against any discussions or meeting activities which appear to violate the antitrust laws or member resolution; disassociate yourself from any such discussions or activities, and leave any meeting in which they continue.

7. DON’T discuss changes in industry production, capacity, or inventories, except in the context of official statistics or other ITA meetings under the supervision of ITA Legal Counsel.

8. DON’T, at any ITA sponsored function, enter into any agreement, gentleman’s understanding, or discussion (no matter how casual) with anyone concerning any of the following:

(a) past, present, or prospective titanium prices generally or for any company specifically;

(b) individual company prices, price changes, price differentials, mark-ups, or data that bear on price, costs, or sales;

(c) bids on contracts for particular titanium products;

(d) plans for individual companies concerning the design, production, distribution, or marketing of particular products, including proposed territories of customers;

(e) matters relating to actual or potential individual suppliers that might have the effect of excluding them from any market, or influencing the business conduct of firms toward such suppliers or customers; or

(f) competitive information.

9. DON’T discuss or exchange information regarding the above matters even during social gatherings incidental to any ITA meeting. Remember ITA meetings and the social gatherings incidental to them are not designed for you to conduct your company’s business.

 

Other Potential Antitrust Problems

There are many other areas of possible Association activities which may involve important antitrust considerations. These include:

  • Membership qualifications
  • Marketing" programs
  • Statistical collection and reporting (which ITA counsel already closely monitors)
  • Certification programs
  • Codes of ethics/self-regulation
  • Joint research
  • Lobbying activities
  • Interassociation agreements

 

Avoid Appearances of Impropriety

Strict compliance with the letter and the spirit of the antitrust laws and the ITA resolution are absolute requirements. But this is not enough to protect you, your company, and ITA. You must also avoid contacts or communications that could appear to someone on the outside to constitute a violation of the law. No matter how innocent a particular act may be, legal difficulties for you, your company, or ITA can result if it leads others to believe that a violation has occurred.  

 

Questions and Advice Concerning Antitrust Matters

Counsel will be in attendance at all ITA Board of Director meetings, at all Statistical Committee meetings, and at some other ITA meetings, and you should not hesitate to contact counsel at those times concerning compliance with the antitrust laws and ITA policy.

You do not have to raise your questions during a meeting, but can and should seek advice privately before or after the meeting or during any break. If you have a specific legal question about the application of the antitrust laws, at other times or when counsel is not present at a meeting, you should contact ITA Legal Counsel: Douglas E. Fierberg, The Fierberg National Law Group at 202-351-0510.  ITA’s counsel can only help you if you contact them and discuss with them your questions and potential problems.

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ita@titanium.org

303.404.2221
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