The American Translators Association (“ATA”) has a policy of strict compliance with the federal antitrust laws in effect in the United States. The antitrust laws prohibit certain combinations and agreements among competitors, and members of ATA can be considered competitors in the context of antitrust challenges, even if their businesses (or professional practices) are not in the same geographic areas, professional language fields or specialties. A member’s conduct in connection with all ATA meetings and events must comply with the antitrust laws. The penalties for violations of the antitrust laws can be very severe—not only for ATA, but also for its individual members.
ATA members cannot come to understandings, make agreements, or otherwise concur on positions or activities that in any way tend to raise, lower, or stabilize prices or fees, divide up markets, or encourage boycotts. Members must decide for themselves, without consultation with competitors, how to conduct their business (or its professional practice) and with whom to do business (or engage in professional practice). Specifically, members should not agree on:
- Current or future prices or fees, price or fee changes, discounting, and other terms and conditions of professional service. Members should be extremely careful about discussing prices or fees, including but not limited to translation rates, methods of calculating translation rates, rate levels, future rate expectations, rate projections, markups, discounts, commissions, credit terms, reimbursements for expenses, cancellation fees, compensation for time not worked, compensation for travel time, payments in kind, or any other matters which may affect rates. Agreements on pricing or fees are clearly illegal. Even price or fee discussions by competitors, if followed by parallel action among the competitors on pricing or fees, can lead to antitrust investigations or challenges.
- Allocating or monopolizing territories or customers. Any agreement by competitors to “honor,” “protect,” or “avoid invading” one another’s market areas or professional practice areas would violate the law.
- Refusing to do business with those whose business practices they oppose. Competitors can discuss the policies or practices of purchasers, suppliers, and other third parties, but they must never threaten directly or indirectly to act jointly to enforce changes to their policies or practices. Again, discussions followed by parallel action could at least trigger antitrust scrutiny.
- Creating, compiling, distributing, publishing, or encouraging adherence to any list or schedule of fees, including but not limited to fee reports, fee guidelines, standard fees, or recommended fees.
Discussions of pricing, fees, or boycotts by ATA members could implicate and involve ATA in extensive and expensive antitrust challenges. Officers, directors, and members should not make any representations, publicly or privately, that appear to represent an official policy or position of ATA without the express authorization of the ATA Board of Directors. The U.S. Supreme Court has determined that recommendations or exhortations in antitrust areas by individuals who might appear to represent ATA in some capacity can likewise jeopardize ATA, so those in positions of responsibility for the ATA must be especially cautious.
The antitrust laws are complicated and often unclear. If any member is concerned that he or she may be in a “gray area,” that member should consult with legal counsel or ATA’s leadership. If the conversation among competitors at an ATA meeting turns to antitrust-sensitive issues, participants should discontinue the conversation until legal advice is obtained, or else leave the meeting immediately.
The ATA policy regarding the discussion of rates was adopted by the ATA Board as a result of a U.S. Federal Trade Commission (FTC) investigation in the early 1990s. The results of ATA’s compensation survey had been published that was subject of an investigation for potential restraint of trade, i.e. the survey was construed to be indicating what translators should charge. The FTC investigation ultimately did not impose any penalties, but the FTC did indicate that it would keep monitoring ATA.
Around the same time, AIIC (International Association of Conference Interpreters) was also subject to an FTC investigation and ultimately issued an order based on FTC allegations that AIIC had violated the antitrust laws and conspired to fix pricing for conference interpreting. The FTC ordered the group to stop publishing and endorsing fee schedules, etc. and non-price aspects. However, the FTC lawyers were unable to make the same case regarding working conditions not related to pricing, e.g. team size, workday length, etc., but AIIC was given a severe warning.
It should also be pointed out that the FTC did recognize that governmental fee schedules can be published, as long as the publication states the qualifications and requirements for a person to be eligible for such a fee.
The reason that the FTC ruling is so often misunderstood is that the ruling does allow associations to discuss rates and business practice, as well as publish compensation reports, but that there can be no agreements or encouragement as pricing or a boycott of a particular business.
There is a slippery slope when discussions on pricing could be alleged to lead to agreements or when survey reports are publicized widely to the point that outside parties believe that certain rates and practices included in survey reports are being “endorsed.” Additionally, any outside party (individual or company) can submit an antitrust complaint to the FTC. Hence, ATA has to be extremely careful about how compensation surveys are conducted and how pricing information or other business plans are discussed among ATA members.
It is important to note that the U.S. antitrust laws apply to all companies and associations, and the FTC has been willing to pursue violators regardless of their industry, size, or revenues. For example, the FTC pursued action against the Music Teachers National Association (other than charities), for including the wording, “[teachers] shall not actively recruit students from another studio” in its code of ethics: this was seen as an anticompetitive practice.
In 2016, ATA’s antitrust compliance policy was revisited by ATA’s counsel and the Board, and updated to reflect a simple and broad policy that reflects best practices for association and is tailored to address issues related to translators and interpreters.
In an effort to make the implications of the policy more concrete, we are providing the following common questions and answers about the policy.
1) Why can’t I discuss my rates on ATA listserves, social media forums, and publications?
While you may legally be allowed to publicize and discuss your rates online, the moderators and editors of ATA listserves and publications must limit these types of discussions to avoid the appearance of any anticompetitive conduct, which may result in liability to ATA or its members. Conversations about member rates can quickly develop into agreements about what interpreters and translators should charge or into agreements on prices or rates, and may lead to potential antitrust violations. It doesn’t matter whether you were advocating for specific rates or not. What matters is whether there is evidence leading governmental regulators (the Department of Justice or the FTC) to conclude that a written, implied, or even oral agreement regarding anticompetitive conduct was entered into. As a result, discussion of rates is generally prohibited from ATA-sponsored publications, listserves, and social media forums in accordance with the antitrust policy. You can still discuss your rates on non-ATA sites and publications, as long as your information does not appear to represent ATA policy. However, you should be particularly careful in this regard, as antitrust violations can lead to civil or criminal penalties, meaning jail.
2) What about listing companies that are bad payers or unethical companies on the ATA website?
ATA can post a list of companies that have violated the Code of Ethics and Professional Practices, and members can individually discuss companies that are reported to be poor payers. However, these discussions could also trigger possible defamation claims based on false, misleading, or negative reports on certain companies or agencies posted by members. In addition, there could be antitrust boycott issues, if these discussions lead translators and interpreters not to do business with certain agencies. Hence, ATA can post the names of companies that have violated the Code, but it is up to the individual members to decide if they still want to do business with these companies. ATA cannot publically advocate boycotting or refusing to do business with any company or agency.
3) What about new translators and interpreters who ask me what to charge? Can I recommend a rate for them?
As a general rule, no. ATA members should not tell other members what they should charge, but all translators should make independent business decisions on such matters. However, ATA does offer seminars, webinars, and other tools (e.g., CalPro) to help members calculate their rates based on their fixed and variable costs. These types of seminars are generally fine because they are not advocating for specific pricing; rather they are helping members establish the basis for their own independent pricing.
4) What about “pricing methods”? Instead of discussing actual numbers, there was a discussion whether translation should be based on the “source word” vs. the “target word.” Or whether editing/translation should be billed hourly.
Discussing the pros and cons of target vs. source vs. hourly pricing is permissible as long as the discussion doesn’t result in agreements among the participants to use a particular pricing method exclusively or advocating for all translators and interpreters to use a particular pricing method.
5) What about payment terms? Net 30 vs Net 45? Or travel reimbursement for interpreters?
Same as above. Discussing the pros and cons of various payments terms or travel reimbursements is fine but be careful to avoid the appearance of a general agreement about what the “standard” payment terms or travel reimbursement policies “should” be. Even if there is no explicit agreement, but “discussion that is followed by parallel action” (e.g., the discussion determines that Net 15 are the best payment terms and all of the members start to use Net 15 payment terms) could be problematic.
6) Does this apply to individual translators or interpreters working on the same project privately agreeing to charge the same amount?
If the client or agency negotiates with a group of translators or interpreters collectively, it is fine for the client or agency to negotiate a specific rate for a particular project. However, if the customer or agency negotiates with translators/interpreters individually, it is not permissible for the translators to collectively agree to a specific rate for the project.
7) What about a team of colleagues trying to recruit direct clients in a specific industry?
It is fine for a translator/interpreter or groups of translators and interpreters to promote their specialization. However, if all of the translators in one group make an agreement not to bid on projects in a specific area, (e.g., all of translators within the “Computer Division” decide not to bid on software localization projects and leave them to the translators in the “Localization Division”) that could be considered anticompetitive behavior. Similarly, if two translation companies or a group of translators make an agreement not to compete in specific areas or for specific customers, that would also be a problem.
This does not apply to “non-compete” clauses that translators or interpreters may be asked to sign to avoid pursuing your client’s customers, because such contractual agreements between two parties to prevent the other party from competing at the same time as working with a party are not considered allocating or dividing markets but rather reasonable restrictions aimed at preventing unfair behavior.
8) Other unions have recommended rates, why can’t ATA?
ATA is not a labor union. For tax purposes, ATA is a 501(c)(6), which is defined as a “Business League” and includes professional and trade associations like ATA. Business leagues are intended to promote common interests within an industry in a neutral manner but are not permitted to engage in collective bargaining to legally establish prices.
9) The federal government posts the rates of federally certified court interpreters. Why can’t ATA?
ATA can certainly refer clients and members to the published rates for federal court interpreters online or to rates posted by any other organization. However, ATA cannot endorse these rates as what interpreters should charge or what clients should pay. ATA can provide information to the government and other corporate clients about rates in the form of e.g. compensation surveys, databases, etc., but the decision of what to pay or charge is up to the respective client and contractor to work out on their own.
10) What about the ATA Compensation Survey? Are those not published rates?
ATA has conducted compensation surveys in the past. However, there are safe harbor conditions established by the government for an association to conduct a compensation survey. The survey must be conducted by an outside party and the data must at least 3 months old before being published. No individual respondent should be identifiable either and the data must be aggregated. The information is provided to members and to the public as a service, but it is not intended to be endorsing specific rates.