Question

Years ago, a group of mental health centers in Texas met together to compare and agree upon rates they charge individuals for different services like counseling and therapy. They also discussed how each would serve only certain counties. Since they get funding from the state and are all not-for-profits would they be exempt from anti-trust laws? In what law might they be in violation of regarding antitrust? If applicable, what strategy might they consider to avoid violation of the law and better coordinate rates and geographic areas served?

Answer 1

The FTC also does not have jurisdiction over most non-profit organizations. However arrangements among competing firms to fix prices and divide markets constitutes violations of the Sherman Act.

They can justify their actions if they prove that the organisation's contributions are more for social benefit than the money’s potential benefit and the managers believe in achieving nonprofit’s mission towards improvement of mental health which is possible after their verbal agreement. Further, presence of community leaders on the board is expected to mitigate anti-competitive effects