Reduce the Risk of Your Information-Sharing Program

Trade associations, professional societies, and other nonprofit organizations often sponsor or conduct information-sharing programs that collect, assemble, and disseminate valuable financial or other data about the industries or professions they represent. These programs have long been recognized as highly beneficial and perfectly legal. Nevertheless, they do raise inherent antitrust risks, and even programs that have operated without incident for decades should be examined periodically to ensure that they are as safe as possible from outside inquiry or challenge.

Nonprofits’ information-sharing programs may collect and share a wide variety of vital information, including:

• prices or fees
• sales or revenues
• production or service levels
• product or service quality
• costs of inputs
• sales or purchase contract terms
• employment compensation, benefits, or terms
• best practices
• credit risks of customers, clients, or patients.

Typically, programs share only historic information, but some may share sales or production forecasts or other projections.

Because these programs often collect information from—and share it with— competitors in business, professions, or elsewhere, they have the potential to run afoul of the antitrust laws. The concern is that competitors could use the shared information to agree on prices or fees, production or service levels, contract terms, or other business matters where such coordination is prohibited. Improper use of the information could subject program participants, and even the organization itself, to serious antitrust liability. Defense of an antitrust challenge, even a baseless one, is nearly always prolonged and expensive.

The good news is that the federal antitrust enforcement agencies have issued clear guidance on how to make these programs nearly bulletproof. The guidance is now well established and sets forth what are, for all practical purposes, bright-line rules.

Download: Reduce the Risk of Your Information-Sharing Program