Trade Associations in Asia: A Predictable Focus of the Authorities

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Mark Jephcott, Tom Kemp, Nov 11, 2014

Trade and industry associations may be formed by businesses for legitimate reasons that enhance competition: Small businesses may find increased bargaining power when negotiating as part of a trade association, and an association may develop and enforce trade standards and best practices. However, such associations may also provide a forum for industry players to conduct themselves in potentially anticompetitive ways. For example, businesses in an industry association may collectively decide to set prices or exchange commercially sensitive information.

It is perhaps because of the proliferation of trade associations in Asia, and their propensity to be used as a vehicle for anticompetitive behavior, that trade associations have been an enforcement focus of antitrust authorities in Asia, particularly in China, in recent years. While price-setting has been the main condemned activity of anticompetitive behavior in trade associations, other—more subtle and controversial—practices have been in the spotlight in jurisdictions with more mature competition law regimes.

 

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