Ski equipment manufacturers Marker Völkl (International) GmbH and Tecnica Group S.p.A. have settled Federal Trade Commission charges that for many years they illegally agreed not to compete for one another’s ski endorsers or employees. The proposed orders settling the FTC’s charges bar each firm from engaging in similar anticompetitive conduct in the future.
According to the FTC’s complaints [Tecnica Group complaint | Marker Volkl complaint], the most effective and costly tool for marketing ski equipment is securing endorsement agreements from well-known skiers. Typically, ski equipment companies compete to secure the endorsement of prominent skiers.
When an agreement expires, the companies may try to induce the skier to switch from one company to another, for example, by offering more money in exchange for an endorsement.
The FTC alleges that starting in 2004 Marker Völkl and Tecnica agreed not to compete with each other to secure endorsements by professional skiers, in violation of Section 1 of the Sherman Act.
Specifically, the FTC charges that Marker Völkl agreed not to solicit, recruit, or contact any skier who previously endorsed Tecnica skis, and Tecnica agreed to a similar arrangement with respect to Marker Völkl’s endorsers. In addition, the complaint states that in 2007, the companies expanded the scope of their non-compete agreement to cover all of their employees.
The purpose of these anticompetitive agreements, according to the FTC, was to avoid bidding up the cost of securing endorsements from skiers, as well as the salaries of their employees.
The complaints also state that while limited non-compete agreements may be legitimate in some cases, the agreements between Marker Völkl and Tecnica had no efficiency benefits to justify their anticompetitive harm. The proposed orders [Tecnica Group order | Marker Volkl order] settling the FTC’s charges are designed to stop the anticompetitive conduct alleged in the complaint and to prevent similar conduct in the future.
Marker Völkl makes skis and bindings and is a subsidiary of the Jarden Corporation, which also owns the K2 brand of skis, ski boots, snowboards, and other equipment. Jarden is the leading seller of skis in the United States.
Tecnica is a privately held maker of ski equipment, sporting goods, and sportswear, based in Treviso, Italy. The company makes and sells Tecnica ski boots, Nordica skis, boots, and bindings, and Blizzard skis.
The Commission vote approving the administrative complaints and proposed consent orders was 5-0. The FTC will publish a description of the consent agreements package in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through June 18, 2014, after which the Commission will decide whether to make the proposed consent orders final. Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments can also be submitted electronically.
Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period 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.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
STAFF CONTACT:
Mark Taylor / Bureau of Competition / 202-326-2287
Source US Federal Trade Commission
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