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SCIART-L  May 2004

SCIART-L May 2004

Subject:

Re: Price fixing

From:

Jim Perkins <[log in to unmask]>

Reply-To:

SciArt-L Discussion List-for Natural Science Illustration- <[log in to unmask]>

Date:

Thu, 6 May 2004 11:55:50 -0500

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (151 lines)

Jeremy said:
"I'm sure that we can ask and tell each other what we "should" charge and
not be in collusion... Asking what to charge by one person for one job is
legitimate and so are the responses by a handful of the 350 or so members.
GNSI has not and will not suggest a set
pricing structure, so stop being so paranoid!"


Sorry, Jeremy, but stop being so naive! You might *want* to believe this,
but it's a fairy tale. If you don't believe me, check out the following
links. I've copied the relevant sections for those who don't want to read
the whole thing.

**********************************************

http://www.antitrust.org/cgi-bin/post.pl?view=0
See the discussion called "Fee Discussions Online". Click on the "1 Reply"
link.

"Is it "collusion" or "price-fixing" for our members to:
* Inquire about "going rates" or "typical rates" or rate ranges for
specific services...
* For members to either discuss typical fees for such services or post
replies to such inquiries in either a public or controlled-access online
discussion group (listserve)?

Reply: The members' concerns are well founded. It would be okay to
commission a survey of rates, the results of which would be distributed to
members. However, the members should avoid ANY discussion of rates among
them. That can only be a bad thing from an antitrust perspective. Any
uniformity of rates (even though driven by normal marketplace forces) could
allegedly be the result of collusion. Never discuss prices or terms and
conditions of sale with your competitors."


http://www.hwg.org/resources/faqs/priceFAQ.html
(The HTML Writers' Guild)

"1. Can Guild Members hold pricing discussions in the mailing lists?

The short answer: NO.
Discussions of pricing issues are not allowed and will be cause for
immediate removal from the list and possible revocation of your guild
membership.

* The HTML Writers Guild will not suggest or recommend fees/prices/wages,
and is not involved in price-fixing in any manner.
* Discussion of rates, what to charge, etc. on the list will be sufficient
grounds for immediate unsubscription by the list administrator. Such
discussions can lead to criminal charges; just one list member can put us
all at risk.
* If you don't like these policies, don't subscribe to the Guild's mailing
lists.

2. Is it illegal to discuss pricing?

The short answer: YES (at least in the U.S. where many of our members are).
The U.S. law specifically makes discussion of pricing between competitors
(all or some) a federal offense. According to either Marshall Kragen or
Lewis Rose (both practicing lawyers), several brokers in DC were
successfully prosecuted for simply discussing an increase of fees at a
dinner meeting. When, where, or how doesn't matter. Any discussion of
pricing by a group of people within the same industry is illegal in the
U.S. The feds call it price fixing.

3. Doesn't freedom of speech allow me the freedom to say anything I want?

Short answer: NO
Use of the Guild's mailing lists is a privilege, not a right; in return for
this privilege, you are asked to follow a few simple rules. The "freedom of
speech" guarenteed by the U.S. Constitution only protects you from
governmental intervention in your right to express yourself -- it doesn't
give you free reign to use computer resources against the wishes of their
owner. Our lawyer friends have kindly (and in self-survival) pointed out
that the Federal Law system in the U.S. and Canada consider pricing
discussions by professional organizations to be price fixing which is a
federal offense. This "consideration" position has been successfully proven
in court.

4. Isn't the Guild being overly cautious?

The short answer: NO.
Guild representatives have discussed the issue at length with Barry
Grossman of the Department of Justice, an experienced anti-trust lawyer.
Mr. Grossman stated that the line between legal and illegal activity can be
hard to discern, and it is more than prudent to stay clear from that line."


http://www.antitrust.org/guidelines.html

"Feel Free to join trade associations and to participate in activities that
do not affect the vigor of your competition with your fellow members.
Safety standards, industry-sponsored promotion of a generic product ("take
the family to the movies"; "natural gas burns cleaner"), and other
activities that do not diminish the intensity of your competition with
others in the industry are perfectly acceptable. So, too, are exchanges of
information that do not affect prices in future transactions. But beware of
meetings with competitors that result in discussions of business tactics,
customers, costs, and ultimately prices. Be on guard at all times at trade
association functions; leave if the meeting turns to what might be
construed as price-fixing or market sharing."

**********************************************

As I said in an earlier post, the AMI forbids discussion of pricing on its
listserv. Here's the relevant passage from the listserv rules (which I
wrote, after discussion with our management association and an attorney).
It's loosely based on a similar set of rules from the American Society of
Association Executives:

"Messages are not to be posted if they encourage or facilitate members to
arrive at any agreement, which either expressly or implicitly leads to
price fixing, restraint of trade, or a boycott of another's business.
Messages which encourage or facilitate an agreement about the following
subjects may be inappropriate: prices, pricing strategies, discounts, or
terms or conditions of sale; salaries; profits, profit margins or cost
data; market shares, sales territories, or markets; allocation of customers
or territories; or selection, rejection or termination of customers or
suppliers. The AMI refuses to facilitate or participate in, and disavows
any discussions or actions, which promote the above activities."


Sorry for the long rant, but I think it's important for us to recognize the
each of us is an independent businessperson and we have the same rights
(and responsibilities) as any other business. This isn't just some club
where we get together and chat over coffee. This is a professional
association which represents a large group of independent contractors who,
despite our common interests, are in competition with one another. Perhaps
if we all adopted a more business-like attitude, we'd command more respect
in the marketplace.

Jim

___________________________________________________________

James A. Perkins, MS, MFA, CMI
Assistant Professor of Medical Illustration
College of Imaging Arts and Sciences
Rochester Institute of Technology
Bldg. 7A, Room 3415
73 Lomb Memorial Drive
Rochester, New York 14623

RIT office: 585-475-2443
RIT fax: 585-475-6447

Studio: 585-226-8149
Studio fax: 585-226-6965

[log in to unmask]

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