Utah Society of Oral and Maxillofacial Surgeons

Bureau of Competition
FEDERAL TRADE 60MM1SS1ON
WASHINGTON, D.G. 20580
February 	8 , 	1985
Dennis 	L. 	Dedecker, 	B,D,S,
S e c r e t a r y
Utah 	S o c i e t y of 	Oral 	and X a x i l L o f a e i a l 	Surgeons
I480 	South Orchard 	Drive
B o u n t i f u l , 	Utah 	84010
Dear 	Dr, Dedecker:
Thank 	you for 	your 	December 	30, 	1984, i~lcquirv regardi3g 	t h e
l e g a l i t y 	of 	a 	f e e 	survey which 	t h e 	Utah 	S o c i e t y of 	O r a l 	and
H a x i l l o f a e i a l Surgeons 	( t h e 	" S o e i e t v " ) 	o l a n s 	t o 	conduct, 	9s 	vou
d i s c u s s e d 	w i t h 	Linda 	Brody 	of 	t h i s 	o f f i c e , 	t h e 	S o c i e t y would 	l i k e
t o p r ~ v i d ei t s memSers 	with 	information 	r s g a r q i n g 	"he 	range of
f e e s charged 	in 	t h e 	a r e a , 	a s 	well 	a s 	t h e 	average 	f e e charged 	f o r
s a r t i c u l a r 	s r o c e d u r e s , 	A s 	I 	underqtand 	i t , 	r ? n a e 	of 	foe
8 i n f o r m a t i o n - w i l l 	i n c l u d e 	a 	L i s t i n g 	of 	the 	h i g h e s t 	and 	Lowest 	f e e s
charged 	by 	members 	f o r 	i n d i v i d u a l procedures, 	r 3 t 3 e r 	than 	t h e
range of 	f e e s , 	if 	any, 	charged 	by 	each p r o v i d e r . 	T h i s 	response
p r o v i d e s 	informal 	s t a f f 	guidance, 	based 	on 	t h e 	l i m i t e d 	i n f o r -
mation 	a v a i l a b l e , 	Moreover, 	s t a f f 	a d v i c e 	is 	n o t 	binding 	on 	t h e
Commission,
I n 	g e n e r a l , 	t h e 	a n t i t r u s t 	laws p r o k i 5 i t 	agreements 	t h a t 	f i x
or o t h e r w i s e 	tamper 	w i t h 	t h e 	f e e s 	t h a t 	c o m p e t i t o r s 	charge 	f o r
t h e i r 	s e r v i c e s , 	Depending 	u a o n 	t h e 	ouroose o r 	s f f e e t 	of 	t h e
conduct, 	d i s s e m i n a t i o n 	of 	p r i c e 	information 	5 y 	a n 	o r g a n i z a t i o n 	of
c o m p e t i t o r s 	c a n 	be 	found 	t o 	c o n s t i t u t e o r 	F a c i l i t a t e 	an 	unlawful
p r i c e 	agreement, 	While 	t h e 	c a s e 	Paw 	does 	not 	s e t 	forth 	a 	c l e a r
t e s t 	t o determine 	t h e 	l e g a l +t y 	of 	everv 	f e e 	s u r v e v , 	it 	i s
g e n e r a l l y 	recognized 	t h a t 	a b s e n t 	e i t h e r 	an 	a n t i c o m p e t i t i v e
puroose 	o r 	e f f e c t , 	t h e 	p u b l i c a t i o n 	of 	t r u t % f u l , b i s t o r ; c
information 	regarding 	t h e 	p r i c e s 	charged 	bv 	comsotitoes 	in a 	non-
c o n c e n t r a t e d market 	nroba5lv 	would 	n o t 	ise 	'ounil 	to 	vio?ilt? 	t % e
a n t i t r u s t 	laws,
T h u s , 	assuming 	no 	i n t e n t 	t o 	r e s t r a i n 	p r i c e 	comoetj tion 	I s
p r e s e n t , 	t h e 	c r i t i c a l 	i s s u e 	regarding 	a 	p r i c e 	information 	ex-
change 	is 	i t s 	i i k e l v 	e f f e c t 	on 	cornnetition, 	Tn 	a 	f a i r l v 	r e c e n t
Supreme Court 	c a s e 	concerning 	a 	challenged 	pr i c e 	exchange 	system,
t h e Court 	s t a t e d 	t h a t 	a 	" n m b e r 	q f 	f a c t o r s 	includinq 	rilost 	~rorfli-
8 n e n t l y 	t h e 	s t r u c t u r e 	of 	t h e 	i n d u s t r y 	involved 	and 	t h e 	n a t u r e 	of
t h e 	information 	exchanged 	a r e 	general3.v 	considered 	i n 	d i v i n i n g
t h e 	procompetitive 	o r 	a n t i c o m p e t i t i v e 	e f f e c t s 	of 	t h i s 	type 	of
i n t e r s e l l e r 	communication," 	United 	S t a t e s 	v. 	Uni"_d 	S t a t e s 	G v ~ s m
Co 	4 3 8 	U.S. 	1 2 2 , 	4 4 1 n - 1 5
f a c t o r s 	t h a t 	t h e 	Supreme 	Court 	has 	c o n s i d e r e d 	t o 	be 	r e l e v a n t
include: 	t h e 	n a t u r e 	of 	t h e 	p r i c e 	information 	d i s t r i 5 u t e d , 	t h e
number 	of 	s e l l e r s 	competing 	i n 	t h e market, 	t h e 	e a s e w i t h 	which

a Dennis L, Dedecker, D,D,S,
new 	sellers can enter 	the market, whethar 	a 	reasonable substitute
exists 	for 	the product 	or 	service, elasticity 	cf 	demand, whether
the 	competition 	for 	sales 	turns on price 	or 	on some other 	factor,
the 	direction 	or movement 	of prices, 	and 	whether 	purchasers, 	as
well 	as sellers, have 	access 	to 	the price 	information, 	-	See
393 U.S, 	333 	(1969);
U,S, 	553 	(1936);
257 U,S, 	377
rogram 	has 	been
undertaken, 	is 	the most probative 	evidence, but 	i t 	is, of 	course,
not 	available beforehand,
8
It 	is 	not 	possible 	to predict with 	certainty 	whether 	the
Society" 	planned 	dissemination s f price 	information would 	be
iliegal, on 	the 	basis 	of 	the 	limited 	rnformation 	available
concerning 	the 	structure 	and 	operation of 	the market, 	and 	the
difficulty 	of 	foreseeing 	what 	effect distribution of 	the 	fee
information will 	have 	either 	on 	the 	fees members 	charge 	for 	their
services or 	on 	competition 	among 	members. 	I can, however, give
you 	some general guidance regarding 	the 	Society's proposed 	course
of 	conduct.
In most 	markets, dissemination of 	truthful, historic 	range
of 	fee 	information, 	in 	itself, would 	not 	be 	likely 	to 	raise 	sig-
nificant 	antitrust 	concerns, 	Mere 	publication 	of 	such 	informa-
tion generally 	would 	not 	facilitate an 	unlawful price-fixing
agreement 	among members. 	For 	example, dissemination of 	range of
fee 	information would 	not 	usually 	appear 	likely 	to 	result 	in
competitors 	coneer tedly 	charging 	the 	same, or 	similar, fees 	for
particular 	procedures. 	Therefore, such 	dissemination would 	not
generally 	be 	presumed 	to 	restrict 	price 	competition 	in violation
of 	the 	antitrust 	laws,
Dissemination of 	the 	average prices 	charged 	for 	particular
procedures 	can 	be 	more 	troublesome 	from 	an 	antitrust 	standpoint,
A 	danger 	in 	the dissemination of 	average 	price 	inforxation 	to
physicians 	who 	currently 	charge 	varying 	prices 	and 	may 	provide
services of 	varying 	levels of 	quality 	can 	be 	that 	the 	stated
average may, 	through 	tacit 	or 	express 	agreement, 	serve 	as 	a 	focal
point 	for 	artificial pricing 	conformity. 	For 	example, dissen-
ination of 	an average price 	may 	be 	part 	of 	competitorsVeacbing
a 	common 	understanding 	that 	the 	stated 	average will 	aecorne 	tne
price 	they 	usually 	will 	charge, or 	even 	the minimum 	price
8 charged, 	for 	a 	particular 	product 	or 	service. 	The 	risk of 	this
may 	be 	greater 	i n 	a marKet 	where 	there 	are 	only 	a 	small 	number 	of
competitors.

b Dennis L. 	Dedeeker, 	D.D.S,
I hope 	t h i s 	information is h e l p f u l 	to you. 	I f 	we 	can be 	of
a n y 	f u r t h e r 	assistance, p l e a s e 	c a l l 	Linda Bi-ody 	at 	(202) 7 2 4 - 0 1 3 4 7 .
S i n c e r e l y ,
i, 	-F\- ?4
A r t h u r 	N. 	Lerner
Assistant Bireetsr