Trade Associations

Actions of associations on matters which relate to the commercial activities of their members may fall within the scope of the Act.

The Act is concerned with agreements, decisions by associations of undertakings or concerted practices, which have an appreciable adverse effect on competition in Singapore. Decisions by associations of undertakings, including trade or other associations, can fall within the ambit of the section 34 prohibition, if they have the object or effect of influencing the conduct or co-ordinating the activity of the members in some commercial matter. Decisions of an association can include its constitution, rules and recommendations. Resolutions passed in general meetings, decisions of the management or executive committee of the association, or rulings of its chief executive, may also be considered 'decisions' of the association. Such decisions will generally fall within the scope of the section 34 prohibition, even if they are not binding on members, and may not have been fully complied with.

Trade and other associations generally carry out legitimate functions intended to promote the competitiveness of their industry sectors. However, where the association acts as a vehicle for facilitating collusion or the co-ordination of the actions of member undertakings, this could constitute an infringement of the section 34 prohibition. 

You may refer to Annex A of the CCS Guidelines on the Section 34 Prohibition for some examples of decisions, rules, recommendations or other activities of associations of undertakings that may, or may not, appreciably prevent, restrict or distort competition.

Each case will be assessed on its own facts and circumstances. Where there has been an infringement of the section 34 prohibition, the individual members (undertakings) of the association may be subject to a financial penalty if membership coincides with participation in the agreement. Further, where there has been a decision by the association, the association may itself be subject to a financial penalty. CCS will consider representations from the association or its members before setting financial penalties.

Where the infringement by an association of undertakings relates to the activities of its members, the penalty shall not exceed 10 per cent of the sum of the turnover of business of each member of the association of undertakings in Singapore active on the market affected by the infringement, for each year of infringement, up to a maximum of 3 years.

CCS will be concerned with a price recommendation by trade or other associations if the price recommendation influences or co-ordinates the pricing behaviour of the members such that it removes their ability to independently set price. Whether a price recommendation restricts this independence or amounts to price-fixing will depend on the facts of each case, including amongst other things, the nature of the recommendation, the context, and the effects of that recommendation.

CCS Guidelines on the Section 34 Prohibition explains the general approach CCS takes in determining whether agreements, decisions by associations of undertakings or concerted practices, are anti-competitive. Associations may also wish to seek legal advice if they are unsure how they will be affected by the Section 34 Prohibition.