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FTC Settles with Breeder Trade Association over Association Rules That Limited Price Competition for Dairy Bull Semen

The two current commissioners of the Federal Trade Commission (FTC) approved another final order and consent agreement with a trade association, this time with the National Association of Animal Breeders, Inc. (NAAB).

WHAT HAPPENED:

  • The new technology, called Genomic Predicted Transmitting Ability (GPTA) was developed by mid-2008.

  • In late 2008, NAAB implemented rules limiting access to the GPTA technology. Specifically, (1) only a NAAB member could obtain a dairy bull’s GPTA; and (2) the NAAB member obtaining a GPTA must have some ownership interest in the dairy bull.

  • These rules prevented the GPTA technology from being used as a means to value a dairy bull prior to its purchase because it did not allow individuals without a preexisting ownership interest in a bull to obtain GPTA information. The FTC believes this rule impeded competition and hindered the use of technology that would have allowed a bull’s market price to more accurately reflect its commercially important traits. The rules expired in February 2013.

  • The Proposed Order requires NAAB to cease and desist from limiting a member’s access to any technology resulting from a research project that the association is a party to or conducts, and from interfering with price-related competition among its membership for the sale or acquisition of bulls or bull semen. In both cases, NAAB is not prohibited from engaging in any conduct that is reasonably necessary to achieve procompetitive benefits or efficiencies. The Order also requires NAAB to post certain information on its website and undertake certain antitrust compliance measures.

WHAT THIS MEANS:

  • This decision further highlights the FTC’s continued enforcement relating to trade association rules that it sees as unreasonably limiting competition. In particular, if a trade association acquires new or unique technology, it should be wary to implement rules surrounding that technology that could be viewed as restrictive or impeding competition.

© 2019 McDermott Will & Emery

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About this Author

Katharine O'Connor Antitrust Litigation Attorney McDermott Will Emery
Partner

Katharine O’Connor focuses her practice on complex antitrust litigation, government investigations, defending mergers and acquisitions before antitrust enforcement agencies, and counseling clients on antitrust compliance issues. She has experience representing clients in a wide array of industries, including health care, manufacturing, food and finance

 

Katharine is a member of the firm’s antitrust and competition practice, which has been designated a “Global Elite” practice, one of the top 25 in the world, by Global Competition Review each year since 2013. She has been...

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Gregory E. Heltzer, Mergers and Acquisitions Lawyer, Antitrust Attorney, McDermott Will Emery, Law Firm
Partner

Gregory E. Heltzer is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm's Washington, D.C., office.  He focuses his practice on defending mergers and acquisitions before the Federal Trade Commission, Department of Justice, state antitrust authorities and foreign competition authorities.  In addition, his practice also includes complex antitrust litigation, government investigations and antitrust counseling (e.g., advising agricultural cooperatives on the requirements of the Capper Volstead Act).

Greg has experience in all three branches of government. Prior to joining the Firm, he served as a judicial law clerk for the Honorable John A. Terry of the DC Court of Appeals. Before entering law school, Greg worked for the US Environmental Protection Agency in the Energy Star Program. He also served as a legislative intern on the staff of the US Senate Committee on Environment and Public Works under the late Senator John Chafee (R-RI).

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