Trade associations, by their nature, bring together people who work for or own businesses that have common goals and interests. This provides association members with the opportunity to discuss topics such as industry challenges and business development ideas. Because of this, trade associations and their members need to be aware of how these discussions carry a risk of violating the Competition Act, which includes provisions that prohibit activities such as bid-rigging, price-fixing, and other anti-competitive practices.
Violations of the Act can have serious consequences for both associations and their members, which is why everyone involved in an industry association has a responsibility to stay informed and ensure compliance with the Act.
Below are some recommended best practices for associations to follow.
- Exercise care when collecting and sharing competitively sensitive information within the association. Use a third party to collect the information and disseminate only aggregate information that cannot be attributed to any competitor.
- Ensure that measures are in place to prevent competitively sensitive information from being disclosed to individual association members.
- Don’t use unreasonable disciplinary measures to coerce members to provide information or data for information sharing purposes.
- Ensure that association meetings have agendas and that the minutes accurately reflect who attended and what was discussed.
- Don’t engage in discussions at association meetings, informal meetings or social events about competitively sensitive information.
- Private meetings between competitors under the pretext of association meetings should be discouraged.
- Ensure that attendees use caution during meetings. If improper discussions arise, attendees should leave the meeting and have their departure noted in the minutes. The incident should be reported to association executives and/or legal counsel, and appropriate action should be taken.
- Allow all members to attend annual meetings and other general meetings; do not exclude a specific firm or category of member.
- Establish an effective program to ensure the association and its member comply with the Competition Act. If possible, appoint a compliance officer.
- Help both members and association staff learn about the law
The Bureau offers free information sessions on preventing and detecting potentially illegal conduct and on how to set up an effective corporate compliance program
- If you publicly promote the business interests of your members, ensure your statements are accurate and not misleading.
- Do not create rules that set prices, mandate levels or types of services, restrict advertising, or exclude viable competitors from the market.
- Don’t create standards that artificially provide some businesses with a competitive advantage over others, such as firms with the potential to enter the market.
- If your association has a self-regulatory mandate established by legislation, ensure the standards that you set are appropriately related to your mandate.
- Ensure that all association rules, standards, and codes of conduct include a clear statement of objectives, expectations and responsibilities, as well as a transparent dispute resolution mechanism.
- Conduct open consultations when developing rules.
- When providing information to the public or association members on price, avoid creating recommended fee guidelines.
- Do not sanction or discriminate against members that do not adhere to rules that relate to competitively important considerations.
- Do not establish arbitrary criteria for membership that will exclude a competitor or category of competitor from membership.
- Do not create the impression that lower prices or fees are automatic indicators of lower-quality services.
Opportunities for immunity and leniency
The Immunity and Leniency Programs offer incentives for individuals and businesses involved in illegal conduct to come forward to help authorities find and prosecute offenders under the Competition Act. The programs are administered jointly by the Competition Bureau and the Public Prosecution Service of Canada.
If you have been involved in activities that may violate the criminal provisions of the Competition Act, you may want to familiarize yourself with the Immunity and Leniency Programs.
- Immunity and Leniency Programs
- How to create an effective corporate compliance program
- Request an information session on preventing and detecting potentially illegal conduct or setting up a corporate compliance program.