FTC settles antitrust case with ski-makers Marker Völkl, TecnicaReprints
The Federal Trade Commission said Monday it has settled charges that for several years, the leading and fourth-largest sellers of skis in the United States illegally agreed not to compete for one another's ski endorsers or employees.
The FTC said Marker Völkl had such an agreement with Tecnica Group S.p.A.
Baar, Switzerland-based Marker Völkl is a subsidiary of Rye, New York-based Jarden Corp., which is the leading seller of skis in the United States through the Marker Völkl and K2 Inc. brands. Tecnica, Treviso, Italy, is the fourth-largest seller of skis in the United States and manufactures and sells Nordica and Blizzard brand skis and Nordica and Tecnica ski boots, according to the FTC.
The FTC complaint said the most effective and costly tool for marketing ski equipment is securing endorsement agreements from well-known stars. Typically, ski equipment companies compete to secure the endorsement of prominent skiers, and when an agreement expires, the companies try to induce the skier to switch from one company to another.
The FTC charges that beginning in 2004, Marker Völkl and Tecnica agreed not to compete with each other to secure endorsements by professional skiers, in violation of the Sherman Antitrust Act. The complaint states that in 2007, the scope of their noncompete agreement was expanded to cover all of their employees as well.
“Marker Völkl and Tecnica intended that these noncompete agreements would enable them to avoid bidding up (i) the cost of securing athlete endorsements and (ii) the salaries paid to employees,” says the complaint. It says their conduct had the likely effect of restraining competition, harming ski athletes' economic interests and harming the economic interests of the affected employees.
The commission voted to approve the administrative complaints and proposed consent orders in a 5-0 vote. They will be subject to public comment through June 18, after which the commission will decide to make the proposed consent orders final.
Once this occurs, each violation of such an order would result in a civil penalty of up to $16,000, the commission said.
Spokesmen for the companies could not immediately be reached for comment.