Legal Regulations On Restricting Competitive Behaviors By Industry Associations

Industry association, as an inevitable outcome of market economy, is playing an active role inmaintaining and thereby sustaining competition orders for the market in a fair basis by overcoming “marketfailure” and “government failure”, promoting orderly competition by formulating internal regulations,rectifying economic order by investigating and punishing unlawful practices, optimizing competitionenvironment by supervising the market, bridging the associated members and the governmental bodies andtherefore harmonizing their relationship, which will be good for reaching agreements on the issues ofnationwide, public interests and welfares. Moreover, industry associations help the enterprises explore theinternational market and improve their comprehensive competiveness.Whereas industry associations have a legitimate autonomy over their related industries, therefore thatthe industry associations restrict competition is reasonable in many occasions, however, impairscompetition order of the market and infringes the legitimate rights of other competitors to a certain extent.As a matter of fact, restricting competitive behaviors by the industry associations is that the industryassociations exercise their autonomous rights, which functions positively as well as negatively. Thenegative function is largely presented by their restricting competitive behaviors, which probably disruptmarket order and damage fair competition among the market participants, posing more severeconsequences than the restricting behaviors of common sense.With intensifying the status of industry associations as main market players and increasing demandfrom social economy and state management, industry associations have achieved a robust growth. However,a great number of cases of industry association restricting competition in recent years greatly impaired freecompetition mechanism and well economic order. Concealment, the very feature of restricting competitivebehaviors by the industry associations, reduces the possibility of being found and punished, moreover, theunlawful cost is low, it is not surprising to see a large quantity of this phenomenon analyzing from theperspective of cost-profit rate.In virtue of the frequent restrictions on competition performed by the industry associations, we arewell aware that industry associations can only function as supplementary participants but not leaders in the market, especially where there is no sound and overall supervising system of nationwide has been formed.Therefore, how to perfect relative laws and how to introduce it into a healthy direction is vitally important.Development of industry associations should be encouraged but not limited and regulations on restrictingcompetitive behaviors by industry associations shall be moderate. Furthermore, the scope of regulation isnot on all the restricting competitive behaviors and those behaviors functioning positive greater thannegative should be excluded. From the perspective of the method of regulation, the principle of rationalityshall be adopted to determine illegality. The result of regulation shall be according to the moderateprinciple that responsibility is equivalent to the consequence so as to achieve harmony betweenautonomous behaviors and antimonopoly regulations.There are various reasons for the existence of restricting competition by the industry associations andlack of relevant legislation is the most outstanding feature. Aiming to completing the laws and regulationson restricting competition by the industry associations, this thesis studies relevant theories and practices topromote healthy development of industry associations from the following four aspects.The first part introduces restricting competitive behaviors by the industry associations in general.Functions of industry associations are defined at the beginning, and its damage to competition order of themarket is explained later. Then the author analyzes the various representations like price cartel, actions ofcarving up the market, information exchange, collective resisting and standardized behavior.The second part focuses on the current situation of industry associations, its classification as well as itsnecessity. The rising of China’s industry associations boosted merely after the reform and opening-uppolicy, and thus the behaviors of restricting competition by the industry associations are attached certainfeatures. Based on China’s national conditions, classifying the industry associations’ restricting competitionbehaviors can be good for finding the problems in it. The occurrence of plenty of restricting behaviorsgreatly impairs the well-balanced competition orders, impedes the enhancement of economic efficiencywhen China is in the phase of social and economic transformation. Therefore, regulating on restrictingcompetition by the industry associations in China is of vital importance.In the third part, the author takes the United States, Germany and Japan as the objects of study. Bycomparing and analyzing the relevant laws, regulations and principles in these countries, the thesis summarizes successful experiences on relevant laws, which are great reference for the formulation ofChina’s legal system.In the fourth part, the author figures out the current situation of supervision on regulating restrictingcompetitive behaviors and its problems. Then, the author tries to raise proposals on establishing concreteinstitutions and implementation of the relevant laws based on referencing the advanced legislationexperience in foreign countries.