2017-07070. American Guild of Organists; Analysis To Aid Public Comment

AGENCY:

Federal Trade Commission.

ACTION:

Proposed consent agreement.

SUMMARY:

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order—embodied in the consent agreement—that would settle these allegations.

DATES:

Comments must be received on or before May 2, 2017.

ADDRESSES:

Interested parties may file a comment at https://ftcpublic.commentworks.com/​ftc/​americanguildconsent online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write “In the Matter of American Guild of Organists; File No. 151-0159” on your comment and file your comment online at https://ftcpublic.commentworks.com/​ftc/​americanguildconsent by following the instructions on the web-based form. If you prefer to file your comment on paper, write “In the Matter of American Guild of Organists; File No. 151-0159” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT:

Karen A. Mills (202-326-2052), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Pursuant to Section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing consent orders to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of thirty (30) days. The following Analysis to Aid Public Comment describes the terms of the consent agreement, and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC Home Page (for March 31, 2017), on the World Wide Web, at http://www.ftc.gov/​os/​actions.shtm.

You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before May 2, 2017. Write “In the Matter of American Guild of Organists; File No. 151-0159” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at https://www.ftc.gov/​policy/​public-comments. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site.

Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, like anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which . . . is privileged or confidential,” as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names.

If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).^[1] Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/​ftc/​americanguildconsent by following the instructions on the web-based form. If this Notice appears at http://www.regulations.gov/​#!home,, you also may file a comment through that Web site.

If you file your comment on paper, write “In the Matter of American Guild of Organists; File No. 151-0159” on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If possible, submit your paper comment to the Commission by courier or overnight service.

Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before May 2, 2017. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/​ftc/​privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) from the American Guild of Organists (hereinafter “the AGO”). The Commission's complaint (“Complaint”) alleges that the AGO, acting as a combination of its members and in agreement with at least some of its members, restrained competition among its members and others in violation of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 45, by adopting and maintaining provisions in its Code of Ethics that restrain AGO members from freely seeking or accepting work, and by recommending that its members use standard fees and approaches to determine compensation for members' services. This likely raised prices for consumers seeking to employ organists for special occasions, as well as the organizations that employed organists.

The proposed Consent Agreement requires the AGO to cease and desist from restraining competition among its members, including by restricting members' freedom to seek or accept work, or by restraining price competition among members.

The Commission anticipates that accepting the proposed order, subject to final approval, contained in the Consent Agreement, will resolve the competitive issues described in the Complaint. The proposed Consent Agreement has been placed on the public record for 30 days for receipt of comments from interested members of the public. Comments received during this period will become part of the public record. After 30 days, the Commission will review the Consent Agreement again and the comments received, and will decide whether it should withdraw from the Consent Agreement or make final the accompanying Decision and Order (“the Proposed Order”).

This Analysis to Aid Public Comment seeks to invite and facilitate public comment. It does not constitute an official interpretation of the proposed Consent Agreement and the accompanying Proposed Order or in any way modify their terms.

The Consent Agreement is for settlement purposes only and does not constitute an admission by the AGO that the law has been violated as alleged in the Complaint or that the facts alleged in the Complaint, other than jurisdictional facts, are true.

I. The Complaint

The Complaint makes the following allegations.

A. The Respondent and the Provisions at Issue

The AGO is a non-profit trade association. The AGO has approximately 15,000 members organized in more than 300 chapters throughout the United States and abroad. The AGO membership includes organists and choral conductors. The AGO's members provide services as organists and choral conductors for a fee.

The AGO maintains a Code of Ethics applicable to the commercial activities of its members. The Code of Ethics states in part that,

“Members shall not seek or appear to be seeking employment for themselves, a student, or a colleague, in a position held by someone else . . .” and

“Members shall obtain the approval of the incumbent musician before accepting an engagement for a wedding, funeral, or other service requested by a third party. In such cases, the incumbent should receive his/her customary fee, and the third party is expected to provide it. It is the responsibility of the guest member to inform the third party of this rule.”

The AGO adopted standardized documents relating to compensation, including fee schedules, a salary guide, worksheets for calculating work performed, and model contract provisions for members to (hereinafter “compensation guidelines”). The fee schedules cover the fees to be charged for such work as rehearsals, performing as a substitute, weddings, funerals, rehearsals, contracting additional musicians, mileage reimbursement, and cancelled services, and include a formula for its chapters and members to use for geographic adjustment of the compensation baselines.

B. The Anticompetitive Conduct

The FTC investigated the provisions of the AGO's Code of Ethics and compensation guidelines that allegedly restrained competition and harmed consumers, and which had generated consumer and organist complaints. The Complaint alleges that the AGO violated Section 5 of the Federal Trade Commission Act by agreeing to restrain competition among organists and choral conductors. The AGO's adoption and enforcement of the Code of Ethics and compensation guidelines represent agreements among competitors not to compete. The Code of Ethics limits the freedom of organists and choral directors to seek or accept positions and engagements. The compensation guidelines limit price competition and impose additional costs on consumers. For consumers who wanted to employ an organist of their choice for a wedding, funeral, or other occasion, the AGO's Code of Ethics included a provision that had the effect of requiring some consumers to pay for the services of two organists—the organist they chose and hired, and the incumbent organist of the venue location even though only the first organist performed. The provisions and enforcement of the AGO's Code of Ethics, as well as its compensation guidelines, likely increased prices for consumers and those that employed organists as choral directors or in permanent organist positions.

The AGO adopted the Code of Ethics, educates members about the Code of Ethics, exhorts its members to follow the Code of Ethics, and enforces the Code of Ethics. The AGO may expel a member that fails to abide by the Code of Ethics.

The AGO instructs its chapters to use AGO's compensation schedules and formulas to develop regionally applicable compensation schedules. AGO chapters used the AGO compensation schedules and formulas to develop and publicize regionally applicable compensation schedules. AGO members used the compensation schedules to determine what to charge for their services.

The purpose, effect, tendency, or capacity of the combination, agreement, acts and practices of the AGO has been and is to restrain competition unreasonably and to injure consumers by discouraging and restricting competition among organists and choral directors.

II. The Proposed Order

The Proposed Order has the following substantive provisions.

Paragraph II of the Proposed Order requires the AGO to cease and desist from restraining or declaring unethical, interfering with, or advising against price competition by members, and from creating or recommending lists, guidelines, or model contract provisions for its members to use to determine fees or compensation. It also requires the AGO to cease and desist from restricting members freedom to seek or accept positions or engagements. Paragraph II also prohibits the AGO from accepting as a chapter or maintaining a relationship with any chapter that the AGO knows engages in conduct prohibited by the Proposed Order.

Paragraph III of the Proposed Order requires the AGO to remove from its organization documents and Web site any statement inconsistent with the Proposed Order, including the challenged Code of Ethics restrictions. The AGO must publicize to its members, new members, leaders, employees, and the public the changes the AGO must make to the Code of Ethics, and a statement describing the Consent Agreement. Paragraph III also requires the AGO to terminate recognition of chapters that fail to certify Compliance with the Proposed Order, and chapters that the AGO learns have engaged in any prohibited practice, if such chapters do not commit to ending such practices.

Paragraph IV of the Proposed Order requires the AGO to design, maintain, and operate an antitrust compliance program. Paragraphs V-VII contain standard reporting, notification, and cooperation requirements.

The Proposed Order will expire in 20 years; the Proposed Order limits certain provisions to a period of five years.

By direction of the Commission.

Donald S. Clark,

Secretary.

Footnotes

1.  In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. See FTC Rule 4.9(c), 16 CFR 4.9(c).