There is no question about it – electronic communication has found a home in mainstream corporate America. But communicating electronically doesn’t mean you can talk about just anything. Approach the topic of pricing, and you could be risking an anti-trust suit.
E-mail discussion lists and newsgroups are a common forum for like-minded people to share ideas. But in what has become an information free-for-all, discussions about pricing have become all too common. Searching the archives of e-mail discussion lists quickly turns up threads about pricing. This can be dangerous.
“I think it is risky for [companies] to chat back and forth about pricing,” says Champ Davis, partner at Davis, Mannix, and McGrath, Chicago-based information technology law firm. “If prices are discussed and two weeks later [companies] raise their prices it can be interpreted as price collusion.”
Anti-trust laws forbid contracts, combinations or conspiracies that restrain trade. And discussing price increases with other firms can be interpreted as an unreasonable restraint of trade-one that doesn’t need much proof. Price increases following discussions about them are considered illegal and the courts don’t have to prove intent, according to Davis.
Keep in mind, however, raising Internet access fees after a major player has done so is not collusion. It is considered ‘price parallelism’ – and that is okay, as long as it isn’t done in agreement with other [companies]. “In a closely knit industry everyone knows about a price change and can follow suit,” says Davis. “But independent firms can’t agree upon a price raise together.”
Beware – any form of public communication needs to stick to the letter of the law.
“Exercise extreme caution when discussing pricing issues,” warns Davis. “Better yet, don’t discuss it at all. The discussion may be purely innocent, but policing is very difficult. Interactive discussion invites unexpected comments that can lead to questionable price discussion.”
The airline industry ran into problems involving interactive electronic communications, Davis notes. It was accused of using computerized reservation systems as a means of price signaling. “Take a lesson from the airlines,” says Davis. “Don’t do it.”
