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Ski manufacturers Marker Volkl and Tecnica have settled a case with the Federal Trade Commission on charges that they illegally agreed not to compete for one another’s ski endorsers or employees.
Neither brand admitted guilt in the case, but agreed to sign consent orders that they will cease or refrain from any such practices.
“The FTC alleged that starting in 2004 Marker Völkl and Tecnica agreed not to compete with each other to secure endorsements by professional skiers, in violation of Section 1 of the Sherman Act,” federal officials stated in a press release. “Specifically, the FTC charged that Marker Völkl agreed not to solicit, recruit, or contact any skier who previously endorsed Tecnica skis, and Tecnica agreed to a similar arrangement with respect to Marker Völkl’s endorsers. In addition, the complaint states that in 2007, the companies expanded the scope of their non-compete agreement to cover all of their employees.”
You can read the FTC’s complaints agains the brands here, which notes the significance of the case involving Marker Volkl a division of Jarden Corp. (parent also to K2 Skis and the No. 1 skis seller in the United States) and Tecnica, a division of Tecnica Group (parent also to Nordica and Blizzard and the No. 4 skis seller in the United States).
“Christoph Bronder, the president and CEO of Marker Völkl, aggressively policed the Tecnica/Marker Völkl non-compete agreements, and complained to Tecnica when he detected a potential violation,” FTC officials alleged.
The case is similar to other federal charges recently coming to light that some top tech companies, including Apple and Google, colluded to not to poach or hire each other’s employees.
The practice essentially puts a damper on employee wages and is deemed illegal and anti-competitive by the federal government.
If employees are unable to fetch jobs, or even job offers, from competing brands in their fields, it lessens their ability to command higher wages. Put another way, there’s little incentive for employers to grant raises if there’s little threat of employees leaving for another job.
While neither Marker Volkl or Tecnica faced penalties in the settlement, the consent order “carries the force of law with respect to future action” FTC officials said. “Each violation of such an order may result in a civil penalty of up to $16,000.”
The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to firstname.lastname@example.org, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001.