Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Notices 12867 

1 FTC Rule 4.2(d), 16 CFR 4.2(d). The comment 

must be accompanied by an explicit request for 

confidential treatment, including the factual and 

legal basis for the request, and must identify the 

specific portions of the comment to be withheld 

from the public record. The request will be granted 

or denied by the Commission’s General Counsel, 

consistent with applicable law and the public 

interest. See FTC Rule 4.9(c), 16 CFR 4.9(c). 

Board of Governors of the Federal Reserve 

System, March 20,2009. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. E9–6548 Filed 3–24–09; 8:45 am] 

BILLING CODE 6210–01–S 

FEDERAL RESERVE SYSTEM 

Notice of Proposals to Engage in 

Permissible Nonbanking Activities or 

to Acquire Companies that are 

Engaged in Permissible Nonbanking 

Activities 

The companies listed in this notice 

have given notice under section 4 of the 

Bank Holding Company Act (12 U.S.C. 

1843) (BHC Act) and Regulation Y (12 

CFR Part 225) to engage de novo, or to 

acquire or control voting securities or 

assets of a company, including the 

companies listed below, that engages 

either directly or through a subsidiary or 

other company, in a nonbanking activity 

that is listed in § 225.28 of Regulation Y 

(12 CFR 225.28) or that the Board has 

determined by Order to be closely 

related to banking and permissible for 

bank holding companies. Unless 

otherwise noted, these activities will be 

conducted throughout the United States. 

Each notice is available for inspection 

at the Federal Reserve Bank indicated. 

The notice also will be available for 

inspection at the offices of the Board of 

Governors. Interested persons may 

express their views in writing on the 

question whether the proposal complies 

with the standards of section 4 of the 

BHC Act. Additional information on all 

bank holding companies may be 

obtained from the National Information 

Center website at www.ffiec.gov/nic/. 

Unless otherwise noted, comments 

regarding the applications must be 

received at the Reserve Bank indicated 

or the offices of the Board of Governors 

not later than April 7, 2009. 

A. Federal Reserve Bank of New 

York (Anne MacEwen, Bank 

Applications Officer) 33 Liberty Street, 

New York, New York 10045-0001: 

1. Canandaigua National Corporation, 

Canandaigua, New York; to acquire 

Canandaigua National Trust Company 

of Florida, Sarasota, Florida, and 

thereby engage in trust company 

activities pursuant to section 

225.28(b)(5) of Regulation Y. 

B. Federal Reserve Bank of Chicago 

(Colette A. Fried, Assistant Vice 

President) 230 South LaSalle Street, 

Chicago, Illinois 60690-1414: 

1. Marshall and Ilsley Corporation, 

Milwaukee, Wisconsin and M and I LLC, 

Milwaukee, Wisconsin; proposes to 

acquire, indirectly through M and I 

Investment Management Corp., all of the 

assets, liabilities and business of the 

Delta Asset Management Division of 

Berkeley Capital Management LLC, San 

Francisco, California, and thereby 

engage in financial and advisory 

activities pursuant to section 

225.28(b)(6)(i) of Regulation Y. 

Board of Governors of the Federal Reserve 

System, March 20, 2009. 

Robert deV. Frierson, 

Deputy Secretary of the Board. 

[FR Doc. E9–6547 Filed 3–24–09; 8:45 am] 

BILLING CODE 6210–01–S 

FEDERAL TRADE COMMISSION 

[File No. 001 0203] 

National Association of Music 

Merchants, Inc.; Analysis of 

Agreement Containing Consent Order 

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 or 

deceptive acts or practices or 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 April 2, 2009. 

ADDRESSES: Interested parties are 

invited to submit written comments 

electronically or in paper form. 

Comments should refer to‘‘NAMM, File 

No. 001 0203’’ to facilitate the 

organization of comments. Please note 

that your comment—including your 

name and your state—will be placed on 

the public record of this proceeding, 

including on the publicly accessible 

FTC website, at (http://www.ftc.gov/os/ 

publiccomments.shtm). 

Because comments will be made 

public, they should not include any 

sensitive personal information, such as 

an individual’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. Comments 

also should not include any sensitive 

health information, such as medical 

records or other individually 

identifiable health information. In 

addition, comments should not include 

any ‘‘[t]rade secret or any commercial or 

financial information which is obtained 

from any person and which is privileged 

or confidential. . .,’’ as provided in 

Section 6(f) of the FTC Act, 15 U.S.C. 

46(f), and Commission Rule 4.10(a)(2), 

16 CFR 4.10(a)(2). Comments containing 

material for which confidential 

treatment is requested must be filed in 

paper form, must be clearly labeled 

‘‘Confidential,’’ and must comply with 

FTC Rule 4.9(c).1

Because paper mail addressed to the 

FTC is subject to delay due to 

heightened security screening, please 

consider submitting your comments in 

electronic form. Comments filed in 

electronic form should be submitted by 

using the following weblink: (https:// 

secure.commentworks.com/ftc-NAMM) 

(and following the instructions on the 

web-based form). To ensure that the 

Commission considers an electronic 

comment, you must file it on the webbased form at the weblink:(https:// 

secure.commentworks.com/ftc-NAMM). 

If this Notice appears at (http:// 

www.regulations.gov/search/index.jsp), 

you may also file an electronic comment 

through that website. The Commission 

will consider all comments that 

regulations.gov forwards to it. You may 

also visit the FTC website at http:// 

www.ftc.gov to read the Notice and the 

news release describing it. 

A comment filed in paper form 

should include the ‘‘NAMM, File No. 

001 0203‘‘ reference both in the text and 

on the envelope, and should be mailed 

or delivered to the following address: 

Federal Trade Commission, Office of the 

Secretary, Room H-135, 600 

Pennsylvania Avenue, NW, Washington, 

DC 20580. The FTC is requesting that 

any comment filed in paper form be sent 

by courier or overnight service, if 

possible, because U.S. postal mail in the 

Washington area and at the Commission 

is subject to delay due to heightened 

security precautions. 

The Federal Trade Commission Act 

(‘‘FTC Act’’) and other laws 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, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC 


PWALKER on PROD1PC71 with NOTICES
12868 Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Notices 

2 ‘‘People of the same trade seldom meet together, 

even for merriment and diversion, but the 

conversation ends in a conspiracy against the 

public, or in some contrivance to raise prices.’’ 

Adam Smith, An Inquiry Into the Nature and 

Causes of the Wealth of Nations 55 (Great Books ed. 

1952) (1776). 

3 See, e.g., Steven J. Fellman, Antitrust 

Compliance: Trade Association Meetings and 

Groupings of Competitors: The Associations’s 

Perspective, 57 Antitrust L. J. 209 (1988) (‘‘Counsel 

should receive agendas of all committee meetings 

in advance of the meetings and make sure that he 

or she monitors committee meetings that may 

involve antitrust-sensitive issues.’’); Kimberly L. 

King, An Antitrust Primer For Trade Association 

Counsel, 75 Fla. Bar J. 26 (2001): 

Here are a few things trade association counsel, 

executives, and members generally should and 

should not do: DO encourage the trade association 

to help expand the markets within which its 

members compete; . . . . DON’T let the association be 

used as a forum for discussion of members’ pricerelated terms of sale, geographic areas or customers 

website, to the extent practicable, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). As a matter of 

discretion, the Commission makes every 

effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

website. More information, including 

routine uses permitted by the Privacy 

Act, may be found in the FTC’s privacy 

policy, at (http://www.ftc.gov/ftc/ 

privacy.shtm). 

FOR FURTHER INFORMATION CONTACT: 

William Lanning, Bureau of 

Competition, 600 Pennsylvania Avenue, 

NW, Washington, D.C. 20580, (202) 326- 

3361. 

SUPPLEMENTARY INFORMATION: Pursuant 

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and § 2.34 the Commission Rules 

of Practice, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order 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 4, 2009), on the 

World Wide Web, at (http:// 

www.ftc.gov/os/2009/03/index.htm). A 

paper copy can be obtained from the 

FTC Public Reference Room, Room 130- 

H, 600 Pennsylvania Avenue, NW, 

Washington, D.C. 20580, either in 

person or by calling (202) 326-2222. 

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. All comments 

should be filed as prescribed in the 

ADDRESSES section above, and must be 

received on or before the date specified 

in the DATES section. 

Analysis of Agreement Containing 

Consent Order to Aid Public Comment 

The Federal Trade Commission has 

accepted, subject to final approval, an 

agreement containing a proposed 

consent order with the National 

Association of Music Merchants, Inc. 

(‘‘NAMM’’ or ‘‘Respondent’’). NAMM is 

a trade association composed of more 

than 9000 members that include 

manufacturers, distributors, and dealers 

of musical instruments and related 

products. The agreement settles charges 

that NAMM violated Section 5 of the 

Federal Trade Commission Act, 15 

U.S.C. § 45, by arranging and 

encouraging the exchange among its 

members of competitively sensitive 

information that had the purpose, 

tendency, and capacity to facilitate price 

coordination and collusion among 

competitors. The proposed consent 

order has been placed on the public 

record for 30 days to receive comments 

from interested persons. Comments 

received during this period will become 

part of the public record. After 30 days, 

the Commission will review the 

agreement and the comments received, 

and will decide whether it should 

withdraw from the agreement or make 

the proposed order final. 

The purpose of this analysis is to 

facilitate comment on the proposed 

order. The analysis does not constitute 

an official interpretation of the 

agreement and proposed order, and does 

not modify their terms in any way. 

Further, the proposed consent order has 

been entered into for settlement 

purposes only, and does not constitute 

an admission by Respondent that it 

violated the law or that the facts alleged 

in the complaint (other than 

jurisdictional facts) are true. 

I. The Complaint 

The allegations of the complaint are 

summarized below: 

NAMM is a trade association. Most 

U.S. manufacturers, distributors, and 

dealers of musical instruments are 

members of NAMM. NAMM serves the 

economic interests of its members by, 

among other things, promoting 

consumer demand for musical 

instruments, lobbying the government, 

offering seminars, and organizing trade 

shows. In the United States, NAMM 

sponsors two major trade shows each 

year, where manufacturers introduce 

new products and meet with dealers. In 

addition, NAMM’s trade shows provide 

competing manufacturers, distributors 

and retailers of musical instruments an 

opportunity to meet and discuss issues 

of concern to the industry. 

An ongoing subject of concern to 

NAMM members in recent years has 

been the increased retail price 

competition for musical instruments, 

and whether that competition benefitted 

consumers more than it benefitted 

NAMM members. Between 2005 and 

2007, NAMM organized various 

meetings and programs for its members 

at which competing retailers of musical 

instruments were permitted and 

encouraged to exchange information 

and discuss strategies for implementing 

minimum advertised price policies, the 

restriction of retail price competition, 

and the need for higher retail prices. 

Representatives of NAMM determined 

the scope of information exchange and 

discussion by selecting moderators and 

setting the agenda for these programs. 

At these NAMM-sponsored events, 

NAMM members discussed the 

adoption, implementation, and 

enforcement of minimum advertised 

price policies; the details and workings 

of such policies; appropriate and 

optimal retail price and margins; and 

other competitively sensitive issues. 

II. Legal Analysis 

Adam Smith famously warned of the 

danger of permitting competitors even 

to assemble in one place.2 The Federal 

Trade Commission does not take nearly 

so jaundiced a view toward trade 

association activities. The Commission 

is aware that trade associations can 

serve numerous valuable and procompetitive functions, such as 

expanding the market in which its 

members sell; educating association 

members, the public, and government 

officials; conducting market research; 

establishing inter-operability standards; 

and otherwise helping firms to function 

more efficiently. 

At the same time, it is imperative that 

trade association meetings not serve as 

a forum for rivals to disseminate or 

exchange competitively-sensitive 

information, particularly where such 

information is highly detailed, 

disaggregated, and forward-looking. The 

risk is two-fold. First, a discussion of 

prices, output, or strategy may mutate 

into a conspiracy to restrict competition. 

Second, and even in the absence of an 

explicit agreement on future conduct, an 

information exchange may facilitate 

coordination among rivals that harms 

competition. In light of the longrecognized risk of antitrust liability, a 

well-counseled trade association will 

ensure that its activities are 

appropriately monitored and 

supervised.3


PWALKER on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 56 / Wednesday, March 25, 2009 / Notices 12869 

to be served, or the kinds of goods or services to 

be offered; DON’T let the association adopt rules 

governing price-related terms under which 

members sell goods or services; DON’T let the 

association be used as a conduit for anticompetitive 

exchanges of information, such as current pricing 

to particular customers or planned price increases; 

DON’T let the association be used to facilitate an 

agreement among competitors to refuse to deal with 

any third person . . . 4 Although the Commission does not directly 

enforce the Sherman Act, conduct that violates the 

Sherman Act is generally deemed to be a violation 

of Section 5 of the FTC Act as well. E.g., Fashion 

Originators’ Guild, Inc. v. FTC, 312 U.S. 457, 463- 

64 (1941). 5 Concerted action that impairs competition by 

facilitating collusion may be challenged under 

Section 1 of the Sherman Act. E.g., United States 

v. Container Corp., 393 U.S. 333 (1969) (agreement 

to exchange price information); Sugar Institute, Inc. 

v. United States, 297 U.S. 553 (1936) (agreement to 

exchange price information); C-O-Two Fire 

Equipment Co. v. United States, 197 F.2d 489 (9th

Cir. 1952) (agreement to standardize product); 

United States v. Rockford Memorial Hospital Corp., 

898 F.2d 1278 (7th Cir. 1990) (merger). 

Unilateral conduct that impairs competition by 

facilitating collusion may be challenged under 

Section 5 of the FTC Act. E.g., E.I. du Pont de 

Nemours & Co. v. FTC, 729 F.2d 128 (2d Cir. 1984); 

In the Matter of Valassis Communications, Inc., C4160, 2006 FTC LEXIS 25 (April 19, 2006) 

(invitation to collude); In the Matter of Sony Music 

Entertainment, Inc., C-3971, 2000 FTC LEXIS 95 

(Aug. 30, 2000) (minimum advertised price policy). 

6 In Leegin Creative Leather Products, Inc. v. 

PSKS, Inc., 127 S. Ct. 2705, 2717 (2007), the 

Supreme Court explained that competing retailers, 

by acting together to compel a manufacturer to 

implement or enforce a vertical distribution 

restraint, may harm competition: 

A group of retailers might collude to fix prices to 

consumers and then compel a manufacturer to aid 

the unlawful arrangement with resale price 

maintenance. In that instance the manufacturer 

does not establish the practice to stimulate services 

or to promote its brand but to give inefficient 

retailers higher profits. Retailers with better 

distribution systems and lower cost structures 

would be prevented from charging lower prices by 

the agreement. 

The Court also observed that antitrust 

condemnation may be appropriate where resale 

price maintenance policies are adopted or enforced 

pursuant to an agreement among manufacturers. 

Resale price maintenance may, for example, 

facilitate a manufacturer cartel. . . . An unlawful 

cartel will seek to discover if some manufacturers 

are undercutting the cartel’s fixed prices. Resale 

price maintenance could assist the cartel in 

identifying price-cutting manufacturers who benefit 

from the lower prices they offer. Resale price 

maintenance, furthermore, could discourage a 

manufacturer from cutting prices to retailers with 

the concomitant benefit of cheaper prices to 

consumers. . . . To the extent a vertical agreement 

setting minimum resale prices is entered upon to 

facilitate either type of cartel [i.e., a manufacturer 

cartel or a retailer cartel], it, too, would need to be 

held unlawful under the rule of reason. 

Id. at 2717-18. 

7 See United States v. United States Gypsum Co., 

438 U.S. 422 (1978) (explaining that the exchange 

of information can, in some circumstances, increase 

economic efficiency and render markets more, 

rather than less, competitive). See also Richard A. 

Posner, Information and Antitrust: Reflections on 

the Gypsum and Engineers Decisions, 67 Geo. L. J. 

1187, 1193-97 (1979). 

According to the Complaint, NAMM’s 

activities crossed the line that 

distinguishes legitimate trade 

association activity from unfair methods 

of competition. A respondent violates 

Section 1 of the Sherman Act and 

Section 5 of the FTC Act when it 

engages in concerted conduct that has 

the principal tendency or the likely 

effect of harming competition and 

consumers. California Dental Ass’n v. 

Federal Trade Commission, 526 U.S. 

756 (1999).4 The conduct of a trade 

association or its authorized agents is 

generally treated as concerted action. 

E.g., California Dental Ass’n v. FTC, 526 

U.S. 756 (1999); North Texas Specialty 

Physicians v. FTC, 528 F.3d 346, 356 

(5th Cir. 2008) (‘‘When an organization 

is controlled by a group of competitors, 

it is considered to be a conspiracy of its 

members.’’). 

The Complaint alleges that at 

meetings and programs sponsored by 

NAMM, competing retailers of musical 

instruments and other NAMM members 

discussed strategies for raising retail 

prices. Firms also exchanged 

information on competitively-sensitive 

subjects—prices, margins, minimum 

advertised price policies and their 

enforcement. And not only did NAMM 

sponsor these meetings, but its 

representatives set the agenda and 

helped steer the discussions. The 

antitrust concern is that this joint 

conduct can facilitate the 

implementation of collusive strategies 

going forward.5 For example, such 

discussions could lead competing 

NAMM members to refuse to deal with 

a manufacturer, distributor, or retailer 

unless minimum advertised price 

policies, or increases in minimum 

advertised prices, were observed and 

enforced against discounters.6

Alternatively, NAMM members could 

lessen price competition in local retail 

markets. Any or all these strategies may 

result in higher prices and harm 

consumers of musical instruments. Any 

savings from lower manufacturing costs 

would be reserved to NAMM members, 

and not shared with consumers in the 

form of lower retail prices. 

The potential for competitive harm 

from industry-wide discussions must be 

weighed against the prospect of 

legitimate efficiency benefits. Here, the 

Complaint alleges that no significant 

pro-competitive benefit was derived 

from the challenged conduct. The 

Commission does not contend that the 

exchange of information among 

competitors is categorically without 

benefit.7 Rather, the allegation is that 

here—taking into account the type of 

information involved, the level of detail, 

the absence of procedural safeguards, 

and overall market conditions—the 

exchange of information engineered by 

NAMM lacked a pro-competitive 

justification. 

III. The Proposed Consent Order 

NAMM has signed a consent 

agreement containing a proposed 

consent Order. The proposed Order 

enjoins NAMM from encouraging, 

advocating, coordinating, or facilitating 

in any manner the exchange of 

information among musical instrument 

manufacturers and dealers relating to 

the retail price of musical instruments 

or the conditions pursuant to which any 

manufacturer or dealer will deal with 

any other manufacturer or dealer. The 

proposed Order also enjoins NAMM 

from facilitating any musical instrument 

manufacturer or dealer in entering into 

or enforcing any agreement between or 

among musical instrument 

manufacturers or dealers relating to the 

retail price of any musical instrument or 

the conditions pursuant to which any 

manufacturer or dealer will deal with 

any other manufacturer or dealer. 

In addition, the proposed Order 

requires NAMM to institute an antitrust 

compliance program. The proposed 

Order requires, inter alia, the review by 

antitrust counsel of all written materials 

and prepared remarks by any member of 

NAMM’s board of directors, employee, 

or agent of NAMM relating to price 

terms and minimum advertised price 

policies; the provision by antitrust 

counsel of appropriate guidance on 

compliance with the antitrust laws; and 

annual training of NAMM’s board of 

directors, agents, and employees 

concerning NAMM’s obligations under 

the Order. 

The proposed Order would not 

interfere with the ability of NAMM to 

engage in legitimate trade association 

activity, including its sponsorship of 

trade shows and other events. The 

proposed Order explicitly excludes from 

its prohibitions the ordinary commercial 

activities of NAMM’s members on the 

show floor, and any conduct protected 

by the Noerr-Pennington doctrine. In 

addition, the proposed Order excludes 

from its prohibitions the publication or 

dissemination of aggregated survey data, 

the sharing of best practices and training 

materials, and the communication of 

information relating to creditworthiness, 

product safety, and warranty issues. 

The proposed order will expire in 20 

years. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E9–6486 Filed 3–24–09: 8:45 am] 

[BILLING CODE 6750–01–S] 


PWALKER on PROD1PC71 with NOTICES