Fair Trading Commission warns of 'anti-competitive conduct'

THE FAIR Trading Commission (FTC) has called on professional associations to avoid behaviours and policies that might encourage anti-competitiveness.

In a media release, the FTC said it has observed professional associations in TT being “called to account by their clients or consumers and…at times by their own members.”

The commission said while it does not have jurisdiction over the activities of such associations, it “will continue to monitor the activities and operations of professional associations on a case-by-case basis to ensure that the spirit of the Fair Trading Act is understood and adhered to.”

The FTC opened its statement by asking rhetorically whether the conduct of local associations was anti-competitive.

“Professional associations or other forms of representative organisations are an acceptable means of advancing the interests of professionals, businesses and others,” the FTC said.

“Indeed, there are many instances where the population benefits from members of an organisation working together. This can have a positive impact on citizens and indeed on the local economy.”

The FTC said it stands ready to assist in developing fair and accountable associations. It continued, it said, "to provide general guidance to consumers, businesses and professional associations alike to ensure the protection and promotion of effective competition."

Professional associations, it said, "must exercise caution to ensure that they are not unnecessarily and perhaps illegally restricting competition in particular lines of business.

For example, it asked, “Are qualified persons being restricted from entering certain professions without a legitimate reason?”

Offering suggestions, it encouraged associations to promote a “fair and level playing field,” such as reviewing all laws, regulations and codes of conduct relative to their operations to ensure that they do not "hinder, restrict, or distort competition in any manner.”

The FTC also suggested associations establish a competition compliance policy and ensure members are familiar with it.

“Ensure that membership rules are transparent, based on objective standards, proportionate and applied equally to all potential members, including supporting reasons for accreditation or qualification requirements."

It also suggested associations “verify that the rules are not overly restrictive and don't have the unintentional effect of restricting competition,” noting that creating barriers to new providers and restricting qualified people from entering any profession can be regarded as "restricting competition."

The FTC said it may be useful to avoid establishing irrelevant or arbitrary rules for the admission of new members.

“Be transparent when providing information about prices or costs to clients, including the reasons for refusal and the rationale for price increases, the FTC said, adding to “refrain from requiring members to provide the association with competitively sensitive information, such as information about pricing and/or output intentions.”

The FTC advised associations to “ensure that the public’s possible lack of industry knowledge is not exploited” and that members "understand they must act independently.

“In a market economy businesses are free to set their own prices but this must not be done in a manner that unfairly affects other businesses, clients or consumers.

“Accordingly, associations should not be used as a channel for, or otherwise facilitate, the sharing of competitively sensitive information amongst members, about pricing, customers or output plans.”

The FTC concluded by saying all associations should operate in a manner that “not only ensures their continued profitability but motivates them to regularly do a self-appraisal of their objectives and modus operandi in the context of sustainability, transparency and a fairer TT.”