Neiman Marcus 2003 Annual Report Download - page 332

letter and spirit of all antitrust and trade practice laws. These laws generally forbid agreements or joint actions between competitors
regarding prices, product or territory allocations, customers or suppliers, agreements or joint actions between a supplier and a
customer that restrain or tend to reduce competition, and any conduct of a single firm that is intended to illegally establish or maintain
a dominant market position or monopoly. Associations, joint ventures or mergers with actual or potential competitors pose special
problems that need to be analyzed with particular care and must be approved in advance by the Legal Department.
Under antitrust laws, unlawful agreements need not take the form of a written contract or consist of express commitments or
mutual assurances. Courts can – and do – infer agreements based on informal discussions or the exchange of information between
competitors from which pricing or other collusion could result. Any communication with a competitor's representative, no matter how
innocuous it may seem at the time, may later be subject to antitrust scrutiny and form the basis for accusations of improper or illegal conduct.
Employees must conduct all relations with competitors and other third parties, including social activities, as if they were completely in the public
view, as those relations may be subject to probing examination and unfavorable interpretation.
For example, trade association meetings and other industry gatherings typically serve perfectly legitimate and worthwhile
purposes. However, these meetings also provide an opportunity for unlawful communications to occur because they bring together
competitors who share common business interests and problems. Informal gatherings outside official trade association meetings are
particularly risky from an antitrust perspective.
Antitrust laws that involve prices and pricing procedures pose particular risks for the Company and its employees. Employees
must always make independent pricing decisions that are in the Company's best interest and are based on factors such as value to the
customer, costs and competitive pressure in the marketplace. Employees must not communicate either directly or indirectly with
competitors concerning sensitive information such as prices charged, sale dates or percentages, business or marketing strategies, profit
margins or credit and billing practices. To avoid any appearance of indirect communications with competitors, vendors and
distributors should be discouraged from sharing with the Company any sensitive information concerning other retailers or from
disclosing information about the Company to others.
Employees also must not reach agreements with vendors or distributors regarding the price at which products will be resold.
Although a manufacturer may suggest retail prices and markdown dates and percentages, any agreement with a vendor requiring the
Company to adhere to a retail price or to change the Company's prices is illegal resale price maintenance.
Finally, vendors and distributors must not discriminate in the prices, terms of sale or advertising or promotional programs and
allowances they provide to competing retailers. While it is not the Company's obligation to ensure that such vendors and distributors
do not discriminate against other retailers, employees must not induce or knowingly receive unlawful preferences in price, terms or
promotional allowances or services compared with competitors who purchase similar products from the seller. Thus, while employees
are encouraged to negotiate the best possible prices, terms, and cooperative advertising arrangements, they must not affirmatively seek
terms that are better than those offered to competing retailers.
In addition to price fixing, resale price maintenance, and price discrimination, antitrust laws prohibit other noncompetitive
activities including: predatory pricing (i.e., selling below cost); group boycotts; allocation of customers, territories, products or
services; unlawful tying of separate products; certain exclusivity agreements; monopolization; unlawful termination of dealers,
suppliers or distributors; and, under certain circumstances, attempts to engage in many of these types of activities. Moreover, antitrust
laws generally prohibit any unfair or deceptive trade practices or methods of competition, including misleading advertising,
disparaging a competitor's products or services, harassing a competitor and stealing trade secrets or confidential business information.
The above description does not exhaust the reach of all antitrust laws. It does demonstrate, however, that antitrust laws,
which attempt to ensure that superior market position is achieved only by superior products and performance, affect nearly every
business decision