Be Aware of Antitrust Laws

In the face of perceived unfair market forces, pumpers might be tempted to look for ways to join together to combat a low-ball competitor or counter the emergence of reverse auctions, which are meant to drive down contracted service prices in a real-time online bidding war.

Don’t even think about it.

The cutthroat operator is the bane of septic service and portable sanitation contractors who provide quality service at business-sustaining prices. The low-ballers typically over-promise and under-deliver, at first taking customers away from reputable companies, then leaving the industry collectively with a negative reputation for customer service.

Some say reverse auctions are worse yet, especially for the portable sanitation industry. A long-time restroom contractor in a Southern state – already battered by a decline in the construction industry – sent me an email a few months ago bemoaning the practice of a large homebuilding company using an online auction involving several contractors to identify the lowest possible price for restroom service.

The contractor was understandably frustrated by this practice, because it took quality customer service out of the restroom rental equation. And he said companies would have to operate at a loss if they took the work at the low bid. He wondered whether restroom contractors should get together and boycott the reverse auctions as a protest.

A red flag immediately popped up. Though I can sympathize with contractors beset with fly-by-night competition and reverse auctions, any talk of competing pumpers having a meeting of the minds about such issues raises scary legal questions … The kind that could threaten well-meaning business owners far more than a low-ball competitor.

So I put in a call to the Federal Trade Commission and asked the nation’s foremost legal experts – and enforcers – regarding U.S. antitrust laws if they could explain what small business owners can and cannot do in the area of competitive practices. Their answers, which may be surprising to some, can be found in this issue of Pumper, in writer Ken Wysocky’s Pumper Interview with FTC attorney Geoffrey Green.

The government is deadly serious about protecting a competitive marketplace for consumers, and those consumers include the big companies that choose to organize reverse auctions. The FTC lawyers are equally serious about protecting a homeowner’s right to choose between your experienced technicians and a price-slashing novice pumper with a tin can tank strapped to the back of a rusty old pickup truck.

For a contractor concerned with quality service and protecting the environment, it might seem odd that the laws should protect uneducated, unaccountable service providers who’ve reduced septic service to grabbing a few bucks and running away. But the FTC holds to the sanctity of unfettered competition and vows to protect it, no matter what.

The bottom line is that good pumpers have to continue to compete the old-fashioned way … with quality work every day and great customer service. And then trust in the consumer to make wise choices.



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