Trade association should review admission guidelines: Competition Commission

Local | 29 Jul 2021 8:25 pm

Trade associations should review their admission guidelines to ensure they are reasonable and transparent, Competition Commission said.

The commission has sent an advisory to all trade, sporting, professional and industry associations or bodies and their members in Hong Kong, reminding them of potential risks under the Competition Ordinance related to the membership admission criteria and procedures.

The watchdog said during its investigations, it has encountered situations where the rules for admission of trade associations may give rise to competition concerns under the Competition Ordinance.

It said unreasonable and unjustifiably strict membership criteria or procedures could be “especially damaging” as exclusion from membership can significantly impact an undertaking's effectiveness as a competitor. For example, in sports, groups or individuals may need to become members of a sport association in order to access to certain sporting facilities or to participate in international sport events like the Olympic Games.

Therefore, the commission said the rules for admission to membership of a trade association should be transparent, proportionate, non-discriminatory, based on objective standards, and applicant can appeal if there's a refusal of admission.

The watchdog said rules for admission must be “reasonable and proportionate” which they should be feasible and not disproportionately onerous for prospective applicants to fulfill.

“Trade associations have an immense positive impact on the Hong Kong economy. However, as associations facilitate interaction between competitors, they must be careful not to be a source of, or provide support for, anti-competitive arrangements,” said the watchdog's chief executive Rasul Butt.

“It is also important to note that where members of a trade association which are undertakings make or give effect to an anti-competitive decision of the trade association, both the members and the association may incur liability under the ordinance,” he added.

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