To ensure strict compliance with the antitrust laws of the United States, the Television Bureau of Advertising, Inc has adopted the following Antitrust Compliance Policy:
INTRODUCTION
All TVB personnel and all participants in TVB activities must comply with the antitrust laws. It is the right thing to do, and severe penalties can arise from noncompliance, including criminal sanctions such as prison terms and fines.
Many TVB activities involve communications between competitors. Such communications are appropriate when they are consistent with free and open competition and made in furtherance of our mission to promote local media marketing solutions to the advertising community and to develop advertising dollars for the medium’s multiple platforms. TVB employees and participants in TVB activities must never be involved in discussions that could be considered a violation of the antitrust laws.
ANTITRUST GUIDELINES
In general, antitrust laws seek to preserve a free, competitive economy. Competitors may not restrain competition amongst themselves with reference to the price, quantity, quality, or any other feature of their goods or services— including the distribution of local broadcast television advertising. Competitors may not act in concert to restrict the competitive capabilities or opportunities of other competitors, their own suppliers or customers, or their employees. TVB agrees with these goals and expects its members to compete fairly in a free market.
CONSEQUENCES OF NON-COMPLIANCE
Penalties for violating antitrust laws are severe. Violators can be prosecuted criminally and sentenced to up to 10 years in federal prison. Companies can be fined up to $100 million dollars per offense. Even non-criminal antitrust litigation can be ruinously expensive and give rise to very large damages.
RELATIONSHIPS WITH COMPETITORS
Agreements among competitors to fix prices, rig bids, or allocate markets, as described below, are considered per se, criminal violations of the antitrust laws. Civil antitrust liability is even broader and includes a range of agreements that result in anticompetitive harm, such as sharing competitively sensitive information, and are considered civil violations of the law. Even non-competitor entities like TVB can be implicated in some illegal agreements. These are referred to as “hub and spoke” conspiracies because of the role of a non-competitor (the “hub”) in facilitating improper communications between competitors (the “spokes”).
Price Fixing: Price fixing is an agreement among competitors at any level of the economy (manufacturers, distributors, or retailers) to raise, fix, or otherwise maintain the price at which their products or services are sold. It is not necessary that the conspirators agree to charge exactly the same price for a given item, nor that every member in the industry join the agreement. Price-fixing agreements can take many forms, including the following:
(i) Agreements to observe minimum or maximum prices;
(ii) Agreements to limit the volume of available inventory;
(iii) Agreements to fix credit terms;
(iv) Agreements to eliminate discounts or rebates; and
(v) Agreements to use particular terms or conditions of sale.
Price-fixing applies to buying as well as selling. Thus, in concept, advertisers or agencies could perpetrate a price-fixing conspiracy against TVB members by conspiring to limit the prices they pay.
Bid Rigging: Bid rigging occurs when competitor-bidders agree to eliminate some form of competition for a piece of business (e.g. sale, contract, or project). Bid rigging can take many forms, but you generally cannot do any of the following:
(i) Agree to take turns being the lowest bidder (i.e. bid rotation);
(ii) Agree to refrain from bidding or withdraw bids so that a competitor’s is accepted (i.e. bid suppression); and
(iii) Submit intentionally losing (“cover”) bids to help a competitor win.
Market Allocation: Market allocation schemes are agreements among competitors to divide markets among themselves. These illegal agreements often involve allocating markets by territory, customer, or product.
Employment Restrictions: No-poach agreements (i.e. agreements among employers not to solicit or hire each other’s employees) and wage fixing agreements (i.e. agreements among employers on compensation terms paid to employees) can (with some exceptions) violate the antitrust laws and be prosecuted criminally. These laws apply to companies that compete for talent, even if they might not be competitors for the products they sell.
Refusals to Deal and Group Boycott: Group boycott results when competitors collectively agree to refuse to sell to, purchase from, or deal with third parties. Companies may independently refuse to do business with a third party, but when the decision is made jointly with competitors it may violate the antitrust laws.
Sharing Competitively Sensitive Information: Competitively sensitive information is information that is not in the public domain and that may be used by a company in its commercial conduct. This includes, for example: non-public pricing information, information about third party contracts, customer negotiations and strategies for obtaining customers, cost information, and marketing plans. The exchange of competitively sensitive information among competitors creates significant antitrust risk for all involved, including third party intermediaries. Many TVB members are currently defending against allegations that they unlawfully exchanged “pacing” information about their available inventory—so this is an area of special sensitivity in the industry.
Independently gathering competitive intelligence is allowed as long as it is obtained from legitimate sources in a legal manner.
DO’S AND DON’TS
Above all, do not take any action that would tend to restrain free and fair competition between or among TVB members or other participants in the market for local broadcast television advertising. Use your best business judgment about this. Here are a few basics:
Do not talk about prices charged by any member or non-member.
Do not talk about anything that might affect such prices, such as members’ or nonmembers’ inventory, costs, discounts, terms of sale, or profit margins.
Do not talk about what any individual station, company, or organization plans to do in any geographic market or with any particular set of customers.
Do not disclose any competitively sensitive information.
Do immediately leave any meeting where any such price-related, territory-related, inventory-related, or otherwise competitively sensitive discussion occurs and do inform TVB’s Chief Financial Officer of what happened.
Do ensure that an agenda is created and followed for each meeting.
Do confer with counsel before bringing up any topic or making any statement with competitive ramifications.
Do not joke about the antitrust laws or any conduct that would violate them. Antitrust compliance is not funny. Assume that unfriendly lawyers will read your emails, texts, etc. Even comments made entirely in jest about antitrust violations can place TVB, the industry, your job, and even your freedom in jeopardy.
REPORTING MECHANISMS AND EMPLOYEE DISCIPLINE
TVB is committed to the highest standards of accountability, integrity and transparency. It is your responsibility, and the responsibility of TVB as a whole, to raise any and all concerns. If you become aware of conduct that may be a violation of the antitrust laws or TVB’s policy you should promptly inform TVB’s Chief Financial Officer. Any and all reports should be as comprehensive as possible and include any relevant information. All reporting is considered anonymous and will be handled confidentially. Anyone who makes a good-faith report will be protected from retaliation under the federal antitrust whistleblower protection law.
When making a report please include any background and historical information with regard to the allegation.
A violation of this policy may be the basis for disciplinary action, including termination, whether or not there was an explicit violation of an antitrust law.
CONCLUSION
You must review and acknowledge receipt and understanding of this policy. In addition to this guidance, every individual will be expected to complete an antitrust compliance training which will be held on an annual basis for existing employees and for any new hires upon hiring.
Do not act in any way that could restrain competition—or in any way that might give rise to suspicion of such behavior. This statement is not a comprehensive summary of applicable laws. It is intended only to highlight and emphasize the principal antitrust standards which are relevant to TVB activities and as a general set of guidelines. It is your responsibility to adhere to TVB’s policy and the relevant antitrust laws. You must seek the guidance of counsel if antitrust questions arise.