Antitrust Laws and Data Collection: Understanding the Limits

"Free and open markets are the foundation of a vibrant economy." The opening statement of the Federal Trade Commission Guide to Antitrust Law — and the reason antitrust laws were established in the first place, is to ensure that no single entity holds all the power over a particular market, that our country continues to provide an environment where...

"Free and open markets are the foundation of a vibrant economy."

The opening statement of the Federal Trade Commission Guide to Antitrust Law — and the reason antitrust laws were established in the first place, is to ensure that no single entity holds all the power over a particular market, that our country continues to provide an environment where all businesses have a fair and equal chance at succeeding, and that consumers are offered a choice of innovative, fairly-priced, quality products and services. At Dynamic Benchmarking, we could not believe more in this primary pillar of our modern economy and seek to support it by helping associations share knowledge and best practices within and across industries. But when does the exchange of information cross the line from helpful to unfair advantage?

Where is the Line?

This is a question that we ask ourselves and, luckily, is something that the FTC has examined and for which it has established firm guidelines. When it comes to information exchanges, the FTC is very clear: companies shall not share nor gather data for the purposes of controlling a particular market or engaging in price-fixing.

How Do I Know if I’ve Crossed It?

So as you embark on a benchmarking study, you may ask, “Is my organization violating any antitrust laws?” Chances are, probably not. Yes, you are gathering a large amount of competitive information, but the key here is intent and opportunity. Associations and trade organizations typically conduct benchmarking surveys for the good of the industries they serve, not for their own self interest, at least not when it comes to competing in the markets they serve. Unless you’re planning to take the data you’ve collected to start a business within that industry, you’ve likely done nothing except deliver an exceptional service to your members.

But Just to be Safe…

At Dynamic Benchmarking, we want our customers to be aware of the FTC guidelines regarding data collection and reporting. Our platform design and project managers help associations abide by these guidelines:

  • The survey should be managed by a third party
  • There must be at least 5 individuals/organizations reporting data for each statistic reported, with no single organization representing more than 25% of the data;
  • Any data disseminated is aggregated to protect the anonymity of all reporting participants;
  • All compensation data reported should be at least 3 months old;

The bottom line is that these laws prevent situations where companies share or collect data for the purposes of collusion or controlling a market. Dynamic Benchmarking is here to help organizations harness the wisdom of the crowd for the betterment of an industry and the economy as a whole and will continue to look for new and innovative ways to do just that. For more information on antitrust law, visit the Federal Trade Commission Guide to Antitrust Law.

Source: www.dynamicbenchmarking.com