THIS POLICY AND GUIDELINES ARE APPLICAPLE TO ALL NAMM ACTIVITIES.

This Antitrust Policy and Guidelines are applicable to all NAMM, the International Music Products Association (“Association”) activities and programs. They are required to be read and followed by all Members of the Association, the Association Staff, Board, Chairs and Members of all NAMM Committees, Councils, and Divisions, and all participants in NAMM-sponsored activities.

All of NAMM’s activities must be conducted strictly in accordance with U.S. federal and state antitrust laws and foreign antitrust laws. This Antitrust Policy will familiarize you with the basics of antitrust law, but it is not a complete or definitive statement. Any specific questions related to antitrust compliance not addressed in this Policy should be forwarded to NAMM’s counsel or to your company’s legal counsel.

OVERVIEW OF THE ANTITRUST LAWS

Antitrust laws are intended to promote and protect competition, which benefits consumers. Competition leads to lower prices, higher quality, and increased output of goods and services. Associations like NAMM can promote competition by engaging in a variety of activities, including standard-setting, educating the public, conveying information to the government, and collecting and disseminating information about the industries in which they operate. On the other hand, associations like NAMM often bring competitors together in person and through information sharing, and antitrust is always suspicious that competitors might agree to engage in behavior that hurts consumers. For that reason, NAMM has developed this Policy to help ensure that its activities are conducted consistently with the antitrust laws.

The United States, the individual states and many foreign countries have antitrust laws. The main antitrust laws at the federal level are the Sherman Act, the Clayton Act, the Robinson-Patman Act, and the Federal Trade Commission Act. The Department of Justice prosecutes some violations of the Sherman Act criminally. Criminal antitrust violations are felonies, and an individual is subject to as much as ten years in prison and a $10 million fine. Almost all the individual states have their own antitrust laws. More than 100 countries have their own antitrust laws (often referred to as “competition laws”). In addition, the European Union has its own antitrust laws and enforces them vigorously. Almost everywhere that people make music, there’s an antitrust law governing business conduct.

I. IMPROPER ACTIVIES AND PROGRAMS

(1) Agreements on Prices or Output (Price or Output Fixing)
Agreements among competitors on price or output are per se unlawful, meaning that the agreements cannot be defended or justified. The agreement itself is illegal. “Price” is interpreted very broadly, and includes

• wholesale, retail, and suggested prices for goods and services (including salaries, benefits and wages for employees or independent contractors)
• price ranges
• pricing formulas
• discount, warranty and credit terms
• minimum advertised prices (“MAP”)
• reference prices (e.g., using one price as a take-off point for other prices)
• price increases or decreases
Agreements among competitors on output or production are also per se unlawful. “Output” includes factors like:
• actual or proposed production or changes in production
• down-time at manufacturing facilities
• hours of operation (e.g., agreements to close on Sundays)

(2) Agreements to Allocate Customers or Territories
Agreements among competitors to allocate divide or assign customers or territories are also per se illegal. Agreements between a manufacturer and a dealer to limit that dealer to certain customers or a defined territory are treated differently under the antitrust laws; however, dealers cannot agree on allocations among themselves and have the manufacturer adopt them.

(3) Boycotts and Refusals to Deal
Agreements among competitors to boycott certain suppliers, customers or competitors are per se unlawful in some circumstances. In the trade association context, restrictions on membership and participation in shows or exhibitions, disciplinary proceedings, and standard-setting activities generate most boycott issues. In particular, NAMM Members should not engage in any discussion about whether to refuse to do business with any other entity, or whether to limit or terminate any existing relationship.

(4) Information Exchange
The exchange of competitively sensitive information among competitors can lead to price fixing and other antitrust violations. NAMM members should not discuss any competitively sensitive information, including:

• individual company actual, suggested or proposed wholesale or retail prices; proposed price changes; discounts; warranty policies; credit terms; mark-ups; margins; costs; minimum advertised prices; price ranges; pricing formulas; and allowances
• actual production levels; plans to increase or decrease production
• costs for goods purchased for resale
• wages, salaries, and benefits for employees and independent contractors

With appropriate safeguards, trade associations may collect some competitively sensitive business information from their members and provide members with data compilations and survey results. These safeguards may include the use of a third party vendor to collect and process the submissions, limiting access to the raw data, masking the identities the submitters (even from association personnel), and aggregating data so that the identity of the submitters is not disclosed and cannot be inferred. Under no circumstances can an association ever provide one member with another’s competitively sensitive business information.

Conduct of Association Business

All officers, directors and employees of NAMM will receive a copy of this policy and acknowledge in writing (electronic acknowledgement is acceptable) that he or she has read and understands the policy. A copy of this policy will also be provided to every Member of NAMM and to a representative of every association with which NAMM communicates or partners.

A copy of this Policy should also be provided to all speakers and presenters at any conference or meeting sponsored by or affiliated with NAMM; presentations on commercial topics should be made available in advance for review by counsel. Notices and agendas of NAMM meetings shall be prepared and distributed in advance. Agendas should not include any subjects which are identified as improper for consideration or discussion under these guidelines and should conform to rules established or approved by legal counsel. Meeting minutes should be prepared, recorded and reviewed by counsel.

Discussion that appears to be leading to a violation of this policy should be discontinued until consult with legal counsel determines appropriate resume, limitations and/or safeguards.