Competition Authority Publishes Guidance to Trade Associations

09 November 2009

The Competition Authority has today published a Guidance Notice on Activities of Trade Associations and Compliance with Competition Law. The Guidance Notice informs the business community and trade associations of the limits that competition law places on joint or coordinated action by competitors.

Trade 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.

Criminal convictions have been secured relating to price fixing activities by the Connaught Oil Promotion Federation, Irish Ford Dealers Association and the Citroën Dealers Association. In all three cartels, trade association meetings were used as the venue for price fixing agreements between competitors.

According to William Prasifka, Chairperson of the Competition Authority, “The prevention of anti-competitive activities organised by or through trade associations is an enforcement priority for the Competition Authority. During these difficult times anti-competitive coordination among competitors is more likely to occur. Anti-competitive coordination by competitors denies consumers the benefits of lower prices. Competition law enforcement is vital to ensure value-for-money.”

In light of these experiences, the Competition Authority has specific concerns regarding activities of trade associations and their compliance with competition law. This notice, using hypothetical and past competition enforcement examples, discusses the application of competition law to a variety of activities of trade associations and their members. Among the types of activities discussed are:

• coordination on pricing
• coordination on market allocation and output quantities 
• collective boycotts, collective negotiations 
• participation in anti-competitive meetings 
• information exchange

NOTES TO THE EDITOR

This Notice is published pursuant to section 30(1)(d) of the Competition Act 2002 (“Act”), which makes it a statutory function of the Competition Authority to publish notices containing practical guidance as to how the provisions of the Act may be complied with. Notices set out the considered views of the Competition Authority relating to a particular area of competition law, and are provided for guidance purposes only. It is ultimately a matter for the courts to decide whether or not a breach of the Act has occurred.

- ENDS -

Contact Information

Janet McCoy, Press Officer, The Competition Authority
Tel: 01 8045455 Mobile: 087 915 5406 email: jmcc@tca.ie

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