1 Letter of June 9, 2003, to the Office of Policy and Evaluation, Federal Trade

Commission.

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

Bureau of Competition

Alden F. Abbott

Assistant Director

Direct Dial

(202) 326 2881

Diane L. Weinberg, Esquire

Meeks & Sheppard

330 Madison Avenue, 39th Floor

New York, NY 10017

Re: American Down & Feather Section

Home Fashion Products Association

Request for Staff Opinion Letter

FTC File No. P002501

Dear Ms. Weinberg:

This letter responds to your request on behalf of the American Down & Feather Section

of the Home Fashion Products Association (AD&FS) for a staff opinion letter regarding a

proposed Labeling Compliance Program. You have asked whether, based on the facts submitted,

the Commission Staff would recommend that the Commission bring an enforcement action

challenging implementation of the AD&FS proposal. On the basis of information you provided 

in your letters of May 1, 2003, June 9, 2003, and June 24, 2003, Commission staff have no

present intention to recommend a challenge to AD&FS’s implementation of the Compliance

Program as proposed.

AD&FS and the Proposed Labeling Compliance Program

We understand that AD&FS is a voluntary association of dealers, buyers, sellers and

processors of raw feathers and down in home fashion products. As of June 9, 2003, AD&FS had 

21 members, of which 18 were manufacturers of finished products containing down and feather,

two were importers of finished products, and one was a supplier of processed down and

feathers.1
2 Proposed Labeling Compliance Program, Home Fashion Products Association,

American Down & Feather Section, dated April 30, 2003, at ¶ 1. We understand the ADA to be

the American Down Association, the predecessor to AD&FS.

3 Letter of June 24, 2003, to the Office of Policy and Evaluation, Federal Trade

Commission. 

4 Letter of June 24, 2003, to the Office of Policy and Evaluation, Federal Trade

Commission.

5 Letter of June 9, 2003, to the Office of Policy and Evaluation, Federal Trade

Commission. 

AD&FS proposes to implement a Labeling Compliance Program with two stated

objectives: (1) “to assure that all members [of AD&FS] and non-members are in compliance

with Industry Standards adopted by the ADA . . . and reaffirmed by a majority vote of the

AD&FS,” and (2) “to further assure that all representations and claims made on the product, on

the packing, and in advertising are truthful and in accordance with Industry Standards and the

Law.”2

 To that end, AD&FS proposes to implement a Labeling Compliance Program, which

involves the physical testing of products, upon receipt of a complaint from a member, to ensure

that those products meet Industry Standards. AD&FS proposes to impose various sanctions for

non-compliance with Industry Standards. You have explained that the process for considering

complaints regarding representations, claims, and advertising, to ensure compliance with

Industry Standards and State and Federal law, also will involve physical testing of the product as

set forth in the Labeling Compliance Program.3

Any member of AD&FS may bring a complaint to the AD&FS Standards and Testing

Committee, asserting that another company’s product does not comply with Industry Standards,

or that another company’s representations, claims, and advertising do not comply with Industry

Standards or with state law or federal law. The Program will apply only to various home

furnishing products in their finished state; it will not apply to intermediate products or inputs into

finished goods.4

 Complaints may be brought against non-members as well as members of

AD&FS. AD&FS estimates that no more than six non-member entities, primarily importers,

would be subject to the AD&FS complaint process.5 Upon receipt of a complaint, the

Committee will initiate a process of testing or evaluation, and, if the accused company is found

not in compliance, the AD&FS may undertake sanctions against the company. Our

understanding of the details of the proposed Compliance Program is set forth below.

Complaints Regarding Non-Compliance with Industry Standards

The Industry Standards specify the requirements for product attributes in seven

categories: (A) Down Cluster content (with different standards depending on whether the

product bears a “Down” label, a “Down & Feather” label, or a “Feather & Down” label); (B)

Goose Specie content; (C) Filling Power; (D) Oxygen #; (E) Turbidity; (F) Thread Count; and

(G) Filling Weight. 

Compliance with the Industry Standard is evaluated under a “Weighted Point System”
6 The Program Manager is a third party retained by AD&FS to administer the

Program.

7 The cost of the first round of samples and testing is the responsibility of the

party bringing the complaint. The AD&FS will initially pay for the second round of samples and

testing; in the event of a pass the complaining company will be billed for the samples and

testing, and in the event of a failure the accused company will be billed for the samples and

testing.

that rates a product in each category of performance covered by the standard. A product that

meets the standard for a given category is deemed to “pass” that standard. A non-complying

product is assigned a specified number of “points” depending on the degree of failure. Four

samples of the product are tested in each category, and the final score for each category is

calculated by averaging the four tests. A product that receives 1-7 total points is deemed to pass;

8 or more total points, or 5 or more points in any one category, results in a failure. The

tolerances applied in this system are said to be consistent with Industry Standards. All sampling,

classification, and testing of the filling material is required to satisfy the International Down and

Feather Bureau (“IDFB”) Standards and be performed by one of three certified IDFB testing

labs.

If the initial round of testing of four samples results in a failure, the Program Manager

will purchase a second round of four samples of the same or similar product and repeat the

testing.6

 If the second round of testing results in a failure, the company that failed the testing

will have an opportunity to appeal the findings and request additional testing at its expense.7

Under the appeal process, the Program Manager will purchase four more samples of the

same or similar product for a third round of testing. Third round samples will be tested in all

three certified labs. The results of the second and third round of testing will be averaged

together to determine pass or fail. The same procedures for sampling and testing, and the same

appeal rights, apply to members and non-members.

An AD&FS member found not in compliance with Industry Standards is subject to one

year of probation, whereby the company is de-listed from the membership roster and is required

to pay for additional rounds of sampling and testing. If the company passes the additional

rounds of testing, it is taken off probation and all membership rights are reinstated. If the

company fails the additional rounds of testing, refuses to participate and fund the additional

rounds of testing, or does not pay its dues and its share of AD&FS expenses during the probation

period, it will be expelled from membership. Ongoing violations may be reported to appropriate

governmental agencies. 

A non-member that is found not in compliance with Industry Standards will be notified in

writing that failure to comply will result in notification to the appropriate governmental

authorities.

Complaints Regarding Representations, Claims, or Advertising

The proposed Labeling Compliance Program states that “[i]f the complaint being
8 Should either of these assumptions be incorrect, our analysis of the proposed

program may require modification insofar as it relates to the program for handling complaints

regarding representations, claims, and advertising.

9 Products that do not meet the standard may be disfavored, and, even under a

voluntary standards program, non-compliant products may be disadvantaged in the market.

10 The actions of standards groups controlled by entities with horizontal business

relationships (i.e., competitors) are deemed concerted action.

submitted is regarding representations, claims, or advertising, the AD&FS will consider each on

a case by case basis and determine the appropriate action;” the proposal does not describe the

process for evaluating such complaints, the standards to be applied, or the actions that may be

taken if claims are determined not to be correct. Based on your letter of June 24, 2003, it now

appears, and we will assume for purposes of the analysis set forth in this letter, that the

evaluation of complaints regarding representations, claims, and advertising will involve no more

than a testing of products to determine whether the representations, claims, or advertising at

issue are consistent with actual product attributes. We will also assume that the actions that may

be taken by AD&FS, in the event claims are not substantiated, will be limited to the sanctions

that may be imposed in the event a product is found not to comply with Industry Standards.8

Analysis of the Proposed Compliance Program

We begin with the observation that the antitrust laws do not forbid legitimate selfregulation that benefits consumers. As the Commission has stated, “[s]uch self-regulatory

activity serves legitimate purposes, and in most cases can be expected to benefit, rather than to

injure, competition and consumer welfare.” American Academy of Ophthalmology, 101 F.T.C.

1018 (1983) (advisory opinion); see also American Medical Association, 117 F.T.C. 1091 (1994)

(advisory opinion); American Medical Association, 94 F.T.C. 701, 1029 (1979), aff'd as

modified, 638 F.2d 443 (2d Cir. 1980), aff'd by an equally divided Court, 455 U.S. 676 (1982)

(“AMA”). On the other hand, conduct that unreasonably restricts competition is inconsistent

with the antitrust laws.

We also note that voluntary private standards generally have the potential to promote

competition by providing useful information to consumers and making it easier for them to 

select among providers of a product or service. By providing information about quality and

performance of products or services, voluntary private standards may facilitate quality

competition and price/quality comparisons, increase consumer confidence in product quality and

thereby increase demand, and facilitate entry of new sellers.

It is inherent in a standards system, however, that some products may fail to satisfy the

standards, and therefore may tend to be excluded from the marketplace.9

 The effect is not

inherently anticompetitive, but an unreasonable restraint on competition may arise under some

circumstances. The actions of standard-setting bodies, therefore, are subject to scrutiny under

the antitrust laws.10 See, e.g., Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492,

500 (1988); American Soc’y of Mechanical Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 572-

73 (1982).
11 E.g., Allied Tube, 486 U.S. at 496 (manufacturers “packed” meeting at which

standard was to be voted upon, in order to prevent approval of a competing product); Hydrolevel,

456 U.S. at 560-64 (manufacturer manipulated the process to obtain an unjustified interpretation

of a safety code, declaring a competitor’s product unsafe); Dell Computer Corp., 121 F.T.C. 616

(1996) (consent order) (failure of a participant in a standard setting process to disclose its patent

position, contrary to the rules of the organization; after its technology was adopted in the

standard, the company sought to enforce the patent).

12 E.g., Allied Tube, 486 U.S. at 501; Accrediting Commission on Career Schools

and Colleges of Technology, 119 F.T.C. 977 (1995) (advisory opinion; Commission declined to

approve a proposed accreditation standard that would define acceptable tuition levels, reasoning

that this would in effect be an agreement among members of the accrediting body to charge no

more than the standard would permit).

13 E.g., American Soc’y of Sanitary Eng’rs, 106 F.T.C. 324 (1985) (consent order).

14 We express no opinion on the substantive reasonableness of the standards. Based

on the information presently before us, however, we have no reason to believe that the standards

themselves are unreasonably restrictive. This informs our analysis of the proposed Labeling

Compliance Program. 

Competitive concerns can arise, for example, when competitors abuse or distort the

standard-setting process for the purpose of restricting competition, thus imposing harm on the

market and consumers while not providing the procompetitive benefits that can flow from

standard-setting programs.11 In addition, the adoption of a standard may, in effect, be an

agreement not to sell non-compliant products.12 Competitive concerns may arise when the

standard is not reasonably necessary to attain procompetitive objectives.13

Although the actions of the AD&FS in adopting the Industry Standards are not the focus

of this letter, efforts to enforce standards also can raise antitrust concerns.14 The proposal to test

products for compliance with Industry Standards, and to impose sanctions for non-compliance,

will be evaluated from two perspectives. First, do the procedures themselves present any risk of

unreasonably restraining competition? For example, procedures that can be applied arbitrarily or

in a discriminatory manner may, in some circumstances, be used to unreasonably raise rivals’

costs to such an extent as to substantially lessen competition. Second, are the proposed sanctions

likely to result in a substantial lessening of competition? 

Product Testing

Based on the information provided, the procedures for testing products for compliance

with Industry Standards do not appear likely to present a risk to competition. The procedures

appear to be reasonably formulated to achieve the stated objective. The Industry Standards

themselves appear to be clearly defined, and the procedures for testing products for compliance

with the standards appear reasonably likely to ensure objectivity in their application. The

compliance program requires that sampling and testing satisfy independent third-party standards,

and be performed by an independent third party lab. Further, the fact that a complaining party

must bear the costs for the first round of samples and testing, and also for the second round if the
15 However, the fact that a complainant may be required to bear some costs is not a

guarantee that the complaint will not be motivated by anticompetitive objectives. Under some

circumstances, a complainant may be willing to incur those costs if it can reduce the level of

competition in the market by disadvantaging competitors, as by raising their costs

disproportionately. In the present instance, however, although we lack specific information on

the costs that may be imposed upon the complainant and the accused company, it does not

appear likely that testing costs would be of such magnitude as to affect the competitive balance. 

16 Although we lack sufficient information to determine the relevant antitrust

market, we note that the group of firms that manufactures or imports down and feathercontaining products is relatively unconcentrated. AD&FS members constitute a sizeable

percentage of that group, but the effects of the testing process on any given firm, standing alone,

do not appear likely to affect competition adversely, so long as competition among other firms is

not constrained.

testing results in a pass, may lessen the likelihood that complaints will be brought without

reasonable cause.15 In addition, the same procedures are applicable to the products of both

members and non-members. These factors tend to ensure impartiality in the application of the

compliance program. 

The proposed program also incorporates an appeals process that provides for objective 

retesting of products found not to be in compliance, using additional samples and additional

testing labs. Although the antitrust laws do not require standards groups to apply any particular

due process procedures, and the presence of such mechanisms is not determinative of the

antitrust analysis, adequate procedural safeguards lessen the possibility of exclusionary conduct

in the guise of self regulation. See Allied Tube & Conduit Corp. v. Indian Head Inc., 486

U.S.492 (1988); Silver v. New York Stock Exchange, 373 U.S. 341, 36-67 (1963).

Finally, given the number of firms that manufacture or import down and feathercontaining products, it does not appear likely that a competitive disadvantage visited upon any

single firm would adversely affect competition in the industry as a whole.16

For the forgoing reasons, the procedures themselves do not appear likely to present a risk

to competition.

Evaluation of Complaints Regarding Representations, Claims, or Advertising

To the extent that the evaluation of complaints regarding representations, claims, or

advertising is limited to the testing of products to determine whether they are in compliance with

Industry Standards, as stated in your letter of June 24, 2003, this aspect of the proposed Labeling

Compliance Program does not require separate analysis – our observations regarding testing

procedures (above) and sanctions (see below) are applicable in this context. We will note,

however, that agreements among competitors to restrict truthful, nondeceptive advertising have

the potential to restrict competition and harm consumers. See, e.g., American Medical

Association, 94 F.T.C. at 1005. Such agreements may harm consumers by raising the cost of

finding the combination of price, service, and quality that best fits their needs and by reducing

the incentive for firms to compete (by preventing them from informing consumers of their prices,
17 See American Medical Association, 117 F.T.C. at 1105.

services, or quality). Id. 

Several factors suggest that AD&FS’s proposed compliance program regarding

representations, claims, and advertising is unlikely to harm competition. First, this aspect of the

program is limited to the physical testing of products against Industry Standards. Second, the

testing procedures appear to be objective and narrowly tailored to achieve the stated purposes. 

Third, the proposed program may make consumers more likely to purchase from AD&FS

members without concern that they are purchasing substandard merchandise. For these reasons,

the restrictions, far from harming competition, may well promote it.

Sanctions for Non-Compliance with Industry Standards

You have asked that this staff opinion letter specifically address three questions:

• Whether AD&FS may report a non-compliant party to state and federal

authorities;

• Whether AD&FS may list a non-compliant company on a website or in another

public forum; and

• Whether AD&FS may place members that are non-compliant on probation or

expel them.

The proposed sanctions do not appear, on their face, to be unreasonably exclusionary. 

First, the reporting of a non-compliant company to state and federal authorities appears unlikely,

in itself, to result in a substantial lessening of competition. Although such action may cause the

allegedly non-compliant company to incur some costs, such as legal fees, we have no reason to

believe, based on current information, that the rival’s costs would increase by such an amount as

to substantially impair its ability to compete and adversely affect competition in the market. 

Further, the reporting of a company that is reasonably believed to be non-compliant may

ultimately have a salutary effect on the market by increasing consumer confidence in products

found in the market. 

Second, the listing of a non-compliant company on a website or in another public forum

appears unlikely, in itself, to result in a substantial lessening of competition. The public

identification of a company that is reasonably believed to be non-compliant may ultimately have

a salutary effect on the market by increasing consumer confidence in products found in the

market. Thus, unless the underlying disciplinary action itself violates the antitrust laws,

publication of a disciplinary action or the fact of non-compliance is not likely to violate the

antitrust laws.17

Third, expulsion from AD&FS of a member found to be non-compliant, or placing such a

member on probation, does not appear, on the basis of the information provided, to be

unreasonably exclusionary. In general, expulsion from a trade group characteristically is not
18 See Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co.,

472 U.S. 284, 286 (1985).

19 Id.

20 Letter of June 9, 2003, to the Office of Policy and Evaluation, Federal Trade

Commission. 

21 In contrast, for example, expulsion could raise serious questions if it were

intended to reinforce a price or output restraint.

likely to result in predominantly anticompetitive effects.18 As stated by the Supreme Court,

“[u]nless the organization has market power or exclusive access to an element essential to

effective competition, the conclusion that expulsion is virtually always likely to have an

anticompetitive effect is not warranted.”19 

Based on the information before us, probation or expulsion of a member from AD&FS

likely would not result in denial of “access to an element essential to effective competition.” 

You have stated that the primary benefit of AD&FS that would be lost if a member is placed on

probation or expelled because of violating Industry Standards would be the inability to

participate in the association’s decision-making.20 Such participation does not appear to rise to

the level of an “element essential to effective competition.” In addition, although the members

of AD&FS represent a sizeable percentage of the manufacturers and importers of products

containing down and feathers, the information presently before us does not suggest that

competition in the industry would be significantly affected by the expulsion of one member.21 

Conclusion

For the reasons discussed above, Commission staff have no present intention to

recommend a challenge to AD&FS’s proposed conduct. This letter sets out the views of the staff

of the Bureau of Competition, as authorized by Rule 1.1(b) of the Commission's Rules of

Practice, 16 C.F.R. § 1.1(b). Under Commission Rule 1.3(c), 16 C.F.R. § 1.3(c), the

Commission is not bound by this staff opinion and reserves the right to rescind it at a later time.

In addition, this office retains the right to reconsider the questions involved and, with notice to

the requesting party, to rescind or revoke the opinion if implementation of the proposed program

results in substantial anticompetitive effects, if the program is used for improper purposes, if

facts change significantly, or if it would be in the public interest to do so.

Sincerely yours,

Alden F. Abbott

Assistant Director 

for Policy & Evaluation