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Does the Voluntary Industry “Agreement” to Ban Phosphates in Dishwasher Detergents Violate Section 1?

Apparently, the detergent industry has entered into what has been described as a “voluntary agreement” to reduce the use of phosphates in detergents (HT: Ted Frank).  A press release from Clean Water Action describes the agreement as follows:

On July 1, 2010 a voluntary ban on phosphates in dishwasher detergents will be implemented by many members of the American Cleaning Council (formerly the Soap and Detergent Association), a manufacturer’s trade group representing most detergent companies.”Industry’s announcement on phosphates in dishwasher detergents is welcome news, indeed, if somewhat overdue,” said Jonathan Scott, a spokesman for Clean Water Action, founded in the early 1970’s to fight for clean, safe water. “Even small amounts of phosphates can wreak havoc when they get into our water,” Scott says, “so it’s the last thing you want as an ingredient in detergents, which are specifically designed to end up in the water by way of household appliances and drain pipes.”

It is also apparent that some our none too pleased with the effects of reducing phosphate levels in detergents — with the primary downside being that the new product doesn’t work too well.  An article in the Weekly Standard describes the impact of the reduction:

The result is detergents that don’t work very well. There have been a handful of stories in the media about consumer complaints. The New York Times noted that on the review section of the website for Cascade—Procter & Gamble’s market-leading brand—ratings plummeted after the switch, with only 11 percent of consumers saying they would recommend the product. One woman in Florida told National Public Radio that she called Procter & Gamble to complain about how its detergent no longer worked. The customer rep told her to consider handwashing the dishes instead.

Some NPR commenters agreed. “Like so many -others, I had disassembled my dishwasher, run multiple empty ‘cleaning cycles’ using all kinds of various chemical treatments, all trying to get my dishwasher ‘fixed,’ ” said one. “We assumed that something was wrong with the machine, that it was limed up, and we tried vinegar and other remedies with limited success,” wrote another. “We do wash some dishes by hand now, using more hot water than before, and also have simply lowered our standards for what constitutes ‘clean.’ ” Another commenter complained: “I live in AZ and had the same thing happen last year when it was introduced out here. I thought it was a reaction between the ‘Green’ soap and the hard water. I wrote to the company and they sent me about $30 in coupons—for other items and for their non-green soap. I dumped the 3 unopened bottles plus the one I was using.”

The detergents were so problematic that they caused environmental delinquency even among NPR listeners. One disappointed commenter rationalized his backsliding:

We first heard about the new phosphate-free detergent formulations almost a year ago. Wanting to do the Right Thing we rushed out and bought some and immediately began using it. The results, although not as bad as reported by some, were still pretty underwhelming. Our dishes and glassware were covered by a gritty film and so was the inside of the dishwasher. We are in Southern California and have very hard water. Adding vinegar to the rinse cycle helped *some* but still we found excessive buildup on our dishes. Disgusted with the new detergent, we decided to go back to something with phosphate. We were not able to find phosphate detergent at the supermarket, but some local discount stores sell supplies that are apparently remaindered by the manufacturers. We bought six boxes of old Cascade with phosphate—about a year’s supply. We figured someone would buy it—might as well be us.

When Consumer Reports did laboratory testing on the new nil-phosphate detergents, they concluded that none of them “equaled the excellent (but now discontinued) product that topped our Ratings in August 2009.”

There is, of course, an interesting antitrust angle here.  Thom has posted previously on another voluntary industry agreement in the soda industry to refrain from selling high calorie soda (and limiting the size of even healthy drinks) in schools.  In the comments to that post I suggest that one important issue is whether the soda players actually reached an agreement:

The passing or collective endorsement of a set of “best practices” to which members of the industry can voluntary choose to adhere to or not is not necessarily an actionable antitrust conspiracy. Of course, calling something “voluntary guidelines” won’t immunize an actual agreement if it is there. But it seems that the parties were pretty careful — EXCEPT for in their commercials and in print!!! — to make sure to emphasize that the antitrust-relevant choices were made unilaterally. But I can’t imagine antitrust counsel would have given the thumbs up to the commercials…

So it is here.  I’ve no doubt that such an agreement, if it exists, is reachable under Section of the Sherman Act.  The question is whether the detergent industry has taken some steps to protect themselves from an “agreement” finding under Section 1.  I don’t have enough detail to know whether that is the case — but if anybody does, please send it along.

Filed under: antitrust, cartels, economics, environment