The Taboo of Rate Discussion
By Chantal Wilford
Every so often, someone asks about translation rates in NCTA’s online discussion group and, predictably, the debate about whether or not we are permitted to discuss rates in public resumes. This debate is healthy, and, more than that, necessary. Here, in an occasional series of opinion pieces on subjects of relevance to our association, NCTA member Chantal Wilford weighs in on the subject. Her views do not necessarily reflect those of Translorial, or NCTA. Cited documents relating to the Federal Trade Commission investigation and conclusions can be found at http://www.tipsfortranslators.com/ftc.asp.
A number of translators are unwilling to mention their rates in public or even participate in a general discussion of translation rates. This reticence stems from a presumed fear of the Federal Trade Commission, which once investigated the ATA for providing rate guidelines. The issue involved in that case was alleged price fixing at the association level, which is indeed illegal.
But what of a simple mention of rates in answer to someone’s legitimate question? This, in my view, is clearly a separate matter. Some communication on the subject is important. How else are translators to advertise our services? How can clients know if they are paying a fair price … or not? How can newcomers to the profession have any idea of what reasonable rates for translation are? And how to value their own services against them? Nonetheless, some translators fear that if they mention their rates in public, they may be found in violation of U.S. antitrust laws.
What are antitrust laws?
Antitrust laws protect trade and commerce from unlawful restraints, price fixing, and monopolies. In the eyes of the law, freelancers are independent businesses that are in competition with each other. We may not collude to fix prices to customers or collectively bargain for higher pay. In the past, groups of independent professionals have adopted anti-competitive practices through their trade associations. Indeed, The Chronicle of April 1990 published the State Department Schedule of Rates for translation: $80 per 1,000 words for general material, $86 for semi-technical material, and $92 for technical material. That was about the last time The Chronicle published rates, as the FTC started to take note shortly after that. Such publication of rate schedules could be seen as price fixing, which is in violation of antitrust laws.
What constitutes price fixing?
Price fixing is the cooperative setting of price levels or range by competing firms, which would otherwise be set by natural market forces. So in the most extreme case, if we competitors all agree to sell our services at a specified price, and we receive profits from such an agreement, we could be found in violation of price fixing laws.
The ATA voluntarily adopted antitrust policies and included the following wording in its Procedures Relating to Gathering and Publishing Information on Rates, which was approved by the ATA Board of Directors on March 24, 1990:
“Members should be encouraged to take seriously the antitrust risks of rate discussions and the risks of other actions that might be seen to encourage rate fixing. For example, distributions by members to other members of comments/observations/suggestions on rate issues present a risk of antitrust violation. Members should recognize that because of antitrust laws, the subject of translation rates is one issue that simply should not be discussed among members of ATA.”
The ATA’s rates guidelines program thus ceased and a strict policy of neutrality and objectivity in matters pertaining to rates was initiated, mere months before the FTC began its investigation in December 1990. The 3½-year investigation closed in 1994, primarily because the ATA had “adopted an unequivocal policy never to resume such [alleged price fixing] activities.” The inquiry cost the ATA around $250,000 in legal fees alone.
Understandably, it seems some people have interpreted these events to mean that under no circumstances should translators be allowed to mention their rates, except presumably to their own clients. Indeed, I believe the FTC investigation (which was neither a lawsuit nor an indictment) has made people overly cautious and very quick to try to silence those who dare question the issue.
The ATA is not the only translators’ association to draw scrutiny from the FTC. The FTC found that the International Association of Conference Interpreters (AIIC) had violated US antitrust laws in 1997 by engaging in a “comprehensive scheme to eliminate price competition in virtually all aspects of conference interpreting.” However, some translators’ associations in other countries issue rate guidelines every year. In today’s translation market, where jobs are sent around the globe at the click of a mouse to take advantage of price differences, time differences and other factors, we need to be aware of these and other factors that contribute to the range of translation rates—and ultimately to our own bottom line.
So what can we discuss?
I believe there is a significant difference between mentioning rates and fixing prices. We are, after all, free to advertise our rates wherever we choose, whether it be on our websites, in our email signatures, or in ads we may take out in Translorial—or, of course, in The Chronicle. I therefore do not see any wrong in telling colleagues about my rates when I’m asked. I do not advocate that everyone charge similarly to me, only that they try to charge what they need to charge to make their business profitable, taking into account all their business and living expenses.
I openly advertise my rates on my website. These are based on my own personal circumstances, specialization, and language combinations and vary according to a number of project-specific factors. So for me, there is no “standard” rate even within my own language combinations. At best, I have an average rate. In my opinion, what you charge should be what the market can bear and what you feel your time and work are worth. As for what you earn, that depends entirely on your own circumstances and motivations. That, I can understand, is nobody’s business.