Pfau Englund Nonprofit Law, P.C. - Certification Programs and Antitrust

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Pfau Englund Nonprofit Law, P.C.

STEERING ASSOCIATION STANDARDS AND CERTIFICATION PROGRAMS
CLEAR OF ANTITRUST VIOLATIONS

While courts have recognized product standardization and certification programs as legitimate and valuable activities, these activities can also have anticompetitive effects. Where standard-making programs impede competition, raise barriers to entry into a field or industry, restrict innovation or otherwise restrain trade they may be challenged as violating antitrust laws. Similarly, certification programs which products or services are tested to determine if they meet a given standard, may be considered antitcompetitive if the certification program discriminates against non-participants or exclude non-certified good.

Following are 3 QuickTips to keeping your association’s standards and/or certification programs clear of antitrust violations:

Clearly state the purpose(s) of the standard and/or certification program. The purpose should be objective and reasonably related to a legitimate, non-competitive purpose.
If possible, have standards testing conducted by an independent laboratory or organization. Representatives of all makers of the products or services subject to the standards program should be included on the committee supervising the program.
Open the standard and/or certification program to both members and non-members.

Association certification programs may also give rise to product liability claims based on an association’s claims with respect to products tested and/or certified. Care should be taken when making such claims.

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Ms. Englund is admitted in the District of Columbia and Virginia. Ms. Hasan is admitted in the State of North Carolina. This legal practice is otherwise limited to matters and proceedings before federal agencies, such as the Internal Revenue Service.