Boycott Group Boycotts

Have you ever had a call from another dealer or attended a meeting where it was suggested that all dealers get together to stop advertising in a newspaper because of its editorial policy about dealer business? Or to stop dealing with a marketing company because of unhappiness about its policies and the effect on dealers' businesses? Or to stop dealing with a supplier because of something the supplier has done?

What did you do? If you did not immediately terminate the conversation or leave the meeting, read on!

An individual decision to stop doing business with someone is legal. When that decision is the result of an agreement by or among competitors to cease or limit doing business with a third party, however, that decision can be very costly. Group boycott agreements among competitors are a restraint of trade. They are a violation of the anti-trust laws that can lead to treble damages plus attorney's fees, injunctions, and even jail time.
 

• Dealers should never discuss with other dealers refusals to advertise or limitations on advertising in media outlets. Actions can be and have been taken against group media boycotts by state attorneys general and by the U.S. Justice Department.

 

• Dealers should never discuss with other dealers refusals to deal or limitations on dealing with a manufacturer. Such activities have been the target of federal Department of Justice and FTC investigations.

 

• Dealers should never discuss with other dealers refusing to deal or limitations on dealing with suppliers. That could subject dealers to supplier lawsuits and governmental action.

Interaction on policy issues with a dealer association that is considering the position it wishes to take in seeking government action are not group boycott discussions. However, a dealer who finds himself or herself in a discussion with other dealers about the terms on which they will stop or they will limit doing business with a media outlet, a manufacturer, or a supplier should insist that the discussion terminate immediately.  

Don Hall
Team VADA