Culture

Sour Notes From The Feds

piano_in_ocean

For a couple of years, in my late-middle and early-high school days, I took piano lessons. Every Monday after school, my mom would take me to a historic home on the campus of Oxford College where Mrs. Jean Phillips would invest an hour of time in a talented kid who didn’t practice enough. My parents paid Mrs. Phillips $10 a week to teach me how to play.

Looking back at those days, two thoughts come to mind. First, I wish I had practiced more, because then my parents would have let me take lessons longer. Second, Mrs. Phillips was a little old lady from church who charged a paltry sum to teach kids piano. These days, she might have caught the eye of the feds. You read that right – the federal government is now going after piano teachers for price gouging and suppression of competition.

This is no joke, as Kim Strassel reports in the Wall Street Journal:

Every month, it seems, brings a new story of this presidency leveling the intimidating powers of the federal government against some law-abiding citizen. Now comes a terrifying tale of how the Federal Trade Commission, a governmental Goliath, crushes an average David—because it can.

In March of this year, a small nonprofit in Cincinnati—the Music Teachers National Association—received a letter from the FTC. The agency was investigating whether the association was engaged in, uh, anticompetitive practices.

[…]

The association’s sin, according to the feds, rested in its code of ethics. The code lays out ideals for members to follow—a commitment to students, colleagues, society. Tucked into this worthy document was a provision calling on teachers to respect their colleagues’ studios, and not actively recruit students from other teachers.

That’s a common enough provision among professional organizations (doctors, lawyers), yet the FTC avers that the suggestion that Miss Sally not poach students from Miss Lucy was an attempt to raise prices for piano lessons.

Essentially, the FTC is accusing the MTNA of allowing its teachers to be mini-monopolies, cruelly price gouging poor students who supposedly can’t jump ship to an instructor who charges less. It goes without saying that the FTC view of things is far from reality.

Piano Lessons

The MTNA is a small enough organization that to pick a fight with the feds would run it into the ground. The association’s director, Gary Ingle, willingly removed the provision from the code of ethics, yet the federal investigation continued. Ingle and his staff have had to compile decades’ worth of documents to submit to the FTC, and they have spent hundreds of hours over the last eight months to get the feds off their back.

This October, MTNA signed a consent decree—its contents as ludicrous as the investigation. The association did not have to admit or deny guilt. It must, however, read a statement out loud at every future national MTNA event warning members against talking about prices or recruitment. It must send this statement to all 22,000 members and post it on its website. It must contact all of its 500-plus affiliates and get them to sign a compliance statement.

The association must also develop a sweeping antitrust compliance program that will require annual training of its state presidents on the potential crimes of robber-baron piano teachers. It must submit regular reports to the FTC and appoint an antitrust compliance officer. (The FTC wanted the officer to be an attorney, but Mr. Ingle explained that this would “break the bank,” so the agency—how gracious—is allowing him to fill the post.) And it must comply with most of this for the next 20 years.

[…]

The organization to this day has no idea how it became a target, nor will it ever because the FTC doesn’t have to provide it.

Oddly enough, this investigation has garnered scant attention from the media, though the music industry has expressed plenty of indignation. One music journal editor, Brian Majeski, wrote, “a consumer watchdog that sees piano teachers as a threat either has too much time on its hands, or badly misplaced priorities.”

Of course, when this administration is responsible for the IRS non-profit scandal, the attack on Gibson Guitars, and yes, even Obamacare, goes after piano teachers with such gusto, we shouldn’t be surprised. And, we probably should wonder: what’s next?