Trade and professional associations have to be careful to ensure that they comply with competition law. Sometimes, members can use the associations as a forum or vehicle for price-fixing, boycotts or other inappropriate anti-competitive behaviour.
The Irish Competition Authority has published a very helpful 36-page guide on how trade associations can comply with competition law. It is entitled "Activities of Trade Associations and Compliance with Competition Law".
Like other competition authorities worldwide, the Irish Authority has been long concerned to ensure that trade associations do not engage in anti-competitive practices. The Authority is particularly mindful of activities such as price-fixing, market sharing and customer allocation within trade associations. However, the Authority is equally mindful of the positive role of such associations - as its press release accompanying the Guidance Notice states, associations "can play a productive, pro-competitive role in the development of a sector, thus promoting the efficient functioning of the market. However, the Competition Authority has often encountered, in the course of its enforcement activities, situations where trade associations have been used to restrict competition, either by coordinating such activity or by providing competitors with the opportunity to meet and form anti-competitive agreements." Indeed, the Authority has been involved in criminal cases with the Connaught Oil Promotion Federation, the Irish Ford Dealers Association and the Citroen Dealers Association. The Authority believes that all three associations were "used as the venue for price fixing agreements between competitors" (source: press release announcing the Guidance Notice). The Chairman of the Authority, William Prasifka, has stated that the "prevention of anti-competitive activities organised by or through trade associations is an enforcement priority for the Competition Authority." He placed the priority in the context of the current recession by saying that during "these difficult times anti-competitive coordination among competitors is more likely to occur" hence it is a priority for the Authority.
The document is a Guidance Notice. It is not legally binding in itself - the interpretation of the law is for the courts only. However, trade associations and their members would take some comfort from it. The legal basis for such notices is section 30(1)(d) of the Competition Act 2002. This provision enables the Authority to give guidance on the Act.
The Guidance Notice deals with coordination on pricing, coordination on market allocation and output restrictions, collective boycotts, collective negotiations, price-fixing, standardisation, joint purchasing, participation in anti-competitive meetings and information exchange. The paper has a series of worked examples as well as some general thoughts on the "interface between the activities of trade associations and competition law". The Guidance Notice is a very welcome addition because it deals with a wide variety of issues and should minimise exposure for trade associations if they read its contents and, more importantly, abide by its advice.
Trade and professional associations requiring advice on competition law compliance including presentations on how to comply and deal with the intricacies of competition law (both European Union and Irish) should feel free to contact any member of A&L Goodbody's EU & Competition Law Unit which has been ranked for several years as being one of the Global Competition Review Top 100 competition practices worldwide.