«POTENTIAL PRO-COMPETITIVE AND ANTI-COMPETITIVE ASPECTS OF TRADE/BUSINESS ASSOCIATIONS English, French JT03254501 Document complet disponible sur OLIS ...»
Organisation de Coopération et de Développement Économiques
Organisation for Economic Co-operation and Development 04-Nov-2008
DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS
COMPETITION COMMITTEEUnclassified DAF/COMP(2007)45
POTENTIAL PRO-COMPETITIVE AND ANTI-COMPETITIVE ASPECTS OF TRADE/BUSINESS
ASSOCIATIONSEnglish, French JT03254501 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DAF/COMP(2007)45
FOREWORDThis document comprises proceedings in the original languages of a Roundtable on Potential Pro-Competitive and Anti-Competitive Aspects of Trade/Business Associations held by the Competition Committee (Working Party No. 3 on Co-operation and Enforcement) in October 2007.
It is published under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience.
This compilation is one of a series of publications entitled "Competition Policy Roundtables".
PRÉFACE Ce document rassemble la documentation dans la langue d'origine dans laquelle elle a été soumise, relative à une table ronde sur les Eventuels Aspects Proconcurrentiels et Anticoncurrentiels des Associations Commerciales/Professionnelles qui s'est tenue en octobre 2007 dans le cadre du Comité de la concurrence (Groupe de Travail No. 3 sur la coopération et l’application de la loi).
Il est publié sous la responsabilité du Secrétaire général de l'OCDE, afin de porter à la connaissance d'un large public les éléments d'information qui ont été réunis à cette occasion.
Cette compilation fait partie de la série intitulée "Les tables rondes sur la politique de la concurrence".
Visit our Internet Site -- Consultez notre site Internet http://www.oecd.org/competition DAF/COMP(2007)45
SERIES ROUNDTABLES ON COMPETITION POLICY
NOTE DE RÉFÉRENCE
SUMMARY OF DISCUSSION
COMPTE RENDU DE LA DISCUSSION
Considering the discussion at the roundtable, the member country submissions, and the background
paper of the Secretariat, a number of key points emerge:
(1) Trade associations play valuable, fundamental roles as forums for the discussion and exchange of views on important issues of common interest for the industry sector which they represent.
Many trade associations activities should be supported and encouraged, because they promote the efficient functioning of the market.
Trade associations consist of individuals and firms with common commercial interests, joining together to further their commercial or professional goals. The important role played by trade associations in modern economies is widely recognised. Their activities benefit their members – especially the smaller members – but they may also be beneficial in increasing the efficiency of the market.
Although their principal function is to provide services to their members, trade associations also have important ‘industrial policy’ and ‘political’ functions. Most trade associations take an active role in shaping the way their industry works. They promote product standards and best practices, and they define and promote standard terms and conditions of sale. They publish and enforce codes of ethics, and in some cases they formulate and enforce industry self-regulation. They issue recommendations to their members on a variety of commercial and non-commercial issues. Trade associations also promote, representing and protecting the interests of members on legislation, regulations, taxation and policy matters likely to affect them.
(2) Many trade association activities benefit from statutory and non-statutory exemptions or immunities from the application of competition rules, to permit them to perform these beneficial roles.
In many countries, the existence and some of the activities of trade associations are protected by fundamental rights of freedom of association and expression and the right to freely petition the government. In order to prevent conflicts between these fundamental rights and competition policy objectives, many jurisdictions have exempted a number of trade association activities from the application of competition rules. However, these exemptions are generally interpreted narrowly, because accommodating these values may sometimes also impose costs on consumers.
A fundamental right of individuals and corporations is the right to associate freely or to join an existing association. An important consequence of this right is that membership and participation in the activities of a trade association should not be viewed as a violation of antitrust rules as such or as sufficient evidence to prove an antitrust conspiracy. Trade associations and their members cannot be held liable under the antitrust statutes simply for exercising a fundamental and constitutionally protected right. This is so even if active participation in a trade association may provide the ‘opportunity’ for unlawful agreements.
One of the primary functions of trade associations is to build consensus among the members on public policy issues affecting the industry and to promote these policy interests with the government and with other public institutions. Such activity, however, may level the playing field among the members of the association and to a certain extent limit competition in the industry. In order to preserve the associations’ right to petition governments, some jurisdictions have exempted from antitrust liability concerted efforts to secure government-imposed restraints on competition. For competitors to lobby the government to change the law in a way that would reduce competition cannot be a violation of the antitrust laws, unless the concerted action is a mere “sham” to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.
Many activities of trade and professional associations are established by law or find their justification in public policies. Some associations are expressly given powers by a public entity to set prices or other terms and conditions for exercising a commercial activity (e.g. meeting certain standards or certification requirements). The public entity in some cases is also asked to approve or veto a resolution by the industry association. The question is whether such activities, which can entail serious price or output restrictions on the members of the associations, should be subject to antitrust scrutiny although they are compelled or authorised by law. In many countries, courts have concluded that no antitrust liability can be found if the challenged private conduct (including conduct by trade associations) is determined by lawful public measures. Under the socalled “state action” or “regulated conduct” doctrines, companies are not liable under the antitrust statutes if their anticompetitive behaviour is required by a public measure and companies have no space for autonomous conduct.
(3) Trade associations may offer opportunities for direct competitors to meet repeatedly. This could easily spill over into illegal and anticompetitive activities and favour collusion and coordinated exclusionary conduct.
Trade associations remain by their very nature exposed to antitrust risks, despite their many procompetitive aspects. Participation in trade and professional associations’ activities provide ample opportunities for companies in the same line of business to meet regularly and to discuss business matters of common interest. Such meetings and discussions, even if meant to pursue legitimate association objectives, bring together direct competitors and provide them with regular opportunities for exchanges of views on the market, which could easily spill over into illegal coordination. Casual discussions of prices, quantities and future business strategies can lead to agreements or informal understandings in clear violation of antitrust rules. It is for this reason that trade associations and their activities are subject to close scrutiny by competition authorities around the world.
Although there is a wide consensus on the fact that trade associations should be subject to competition rules, if only to avoid members escaping antitrust enforcement by acting through the intermediary of the association, the role of a trade association in the infringement may vary significantly, like its liability for the anti-competitive conduct. Members of an association that create it would be responsible for restrictions in the act of incorporation or in by-laws of the association (e.g. anti-competitive membership criteria). The association itself, however, may be responsible alongside its members if it had a separate role in suggesting, orchestrating or executing an illegal conduct. No liability should be imposed on the association if the illegal conduct is put in place by the members without the association being aware of it.
The traditional areas of concern about trade associations are price fixing, allocation of customers or territories and bid-rigging. Naked price fixing or customer allocation conspiracies orchestrated
by a trade association are becoming rarer, though. Competition enforcement is increasingly focussed on trade associations’ practices that facilitate collusion among the members. Unduly restrictive membership rules, exchange of detailed and sensitive commercial information, exclusive or closed industry standards, marketing restrictions, and “ethical” codes regulating pricing or other trading practices that limit the members’ ability to compete freely are among the antitrust-sensitive issues which most affect the activities of trade associations today.
(4) Associations may be liable for antitrust infringements, but the application of competition rules to associations may raise specific issues when it comes to determining and assessing monetary sanctions.
In most jurisdictions, the infringement of competition laws exposes the participants to sanctions and penalties. Trade associations are not immune from the consequences of an antitrust infringement, and when they are responsible for organising and executing the infringement, they can be subject to fines separately from the members. This has raised practical difficulties in practice, as fines to trade associations based on the trade association turnover may not achieve the necessary deterrent effect, not only towards the association concerned (specific deterrence) but also towards other associations engaged in practices that are contrary to competition laws (general deterrence).
A first issue relates to the relevant turnover that agencies should take into consideration when calculating the amount of the fine. If only the turnover of the association is taken into account, then the fine is likely to be small and the deterrent effect limited. Associations generally are not active on the market. Their turnover consist mostly of membership fees. An administrative fine calculated on that basis would have no relation to the impact on the market of the illegal conduct.
For this reason, agencies have tried to lift the associational veil and to take as reference for the fine the turnover of the members of the association.