Newsletter
INDUSTRY ASSOCIATIONS MAY BE DEEMED SUBJECTS OF CARTELS
Article 2-3 of the Fair Trade Law (FTL) expressly stipulates that industry associations are "enterprises" as defined by that law. Article 7 of the FTL defines "cartel" as an enterprise acting in concert with another enterprise or enterprises with which it has a relationship of competition to mutually restrain each other's business activities. There is some contention, however, over the question of whether industry associations can be deemed "enterprises with relationships of competition," since they do not supply goods or services nor compete with their members.
The Fair Trade Commission has taken the view that it is a common practice among industry associations to engage in cartel activity in the form of joint price setting or reference price setting, and such activity has a very considerable impact on market supply and demand. In the interest of preserving the order of market competition, it has therefore resolved to specify in the FTL Enforcement Rules that industry associations may be identified as subjects of cartels.