1. The actors in a concerted action should refer to those enterprises that actually engage in the restriction of each other's business activities. Is it appropriate then for Article 14 of the Fair Trade Act and Article 5 of the Enforcement Rules to provide, as they do, that a trade association may be a subject of concerted action and that a representative of a trade association may be deemed the actor in such a concerted action?
Under Article 14(4) of the Fair Trade Act, it is deemed horizontal concerted action for a trade association "by means of its charter, a resolution of a general meeting of members or a board meeting of directors or supervisors, or any other means, to restrict activities of enterprises. "Article 5 of the Enforcement Rules of Fair Trade Act further provides that "authorized representatives of the trade associations or other organizations described in Paragraph 2 of Article 2 of the Act may be deemed as actors in concerted actions in the Act." The primary reasons for the adoption of these provisions are as follows:
- Trade associations are composed of homogeneous members among whom there exists a relationship of competition. If trade associations place mutual restrictions on the business activities of members through their charters or resolutions of member meetings or directors' or supervisors' meetings, the result is no different than if individual enterprises were to engage in concerted action. Therefore, although trade associations themselves are not entities obtaining revenues or engaging in economic activity, they have customarily and historically played a leading role in concerted action or as a forum by which enterprises arrive at mutual understandings to engage in concerted actions such as production and sales negotiations, unified pricing, market delineation, or product standardization. To prevent trade associations from leading competing enterprises into concerted actions and to prevent companies, sole proprietorships, and partnerships from using trade associations as a "loophole" or cover under which to engage in concerted actions, and to avoid resultant restraints on competition and harm to consumer interests, as well as with an eye to correcting the longstanding and unsound customary practice of concerted action by trade associations. Hence, trade associations are defined as one kind of enterprises in Article 2 of this Act, thereby identifying them as being subject to the provisions of the Act.
- Trade associations are often the mechanism by which members effect unlawful concerted actions. Hence, in corresponding laws in other countries, trade associations are consistently taken as subjects of concerted action provisions. Article 2(2) of the Act follows the lead of such comparative laws. In practice, it has always been the trade association representative who is referred for prosecution. Article 5 of the Enforcement Rules of Fair Trade Act therefore serves a positive purpose by impelling (reminding) representatives to be alert to and avoid such violations.
Relevant article(s) of law: Fair Trade Act, Articles2, 14, 34, and 40; Enforcement Rules of Fair Trade Act, Article 5
Updated at：2020-04-13 13:42:20