Trade Associations and Collective Boycotts in Australia and New Zealand: A Mistranslation of the Sherman Act down under

• DOI: 10.1177/0003603X8703200408
• Author: Warren Pengilley
• Published date: 01 December 1987
• Date: 01 December 1987
• Subject Matter: Foreign Antitrust

The Antitrust Bulletin/Winter 1987

Trade associations and collective

boycotts in Australia and

New Zealand: a mistranslation

of

the Sherman Act down under

BY WARREN PENGILLEY*

1019

Competition law is quite fundamentally about the control of

conduct between competitors. Of course, not all joint conduct is

to be condemned. We all know that trade associations serve

useful purposes. The Australian Trade Practices Commission has

identified such purposes and in one of its decisions said:

Managing Partner (Trade Practices &Franchising), Sly &Rus-

sell, Sydney and Canberra; formerly, Commissioner, Australian

Trade

Practices Commission.

AUTHOR'S NOTE: This is a modified version

of

a presentation given at a

conference jointly conducted by the University

of

Canterbury and

Monash University and held in Auckland, New Zealand, on March 20-

22, 1987.

The term "Australasian" as used in this article may not be known to

readers. It is a term which covers both Australia and New Zealand.

Where a distinction between the countriesis needed, they are referred to

as Australia or New Zealand. When joint reference is made, "Australa-

sia"

is used.

©1988by Federal Legal Publications, Inc.

1020 : The antitrust bulletin

There is a very real role for trade associations in a number of areas

without risk in Trade Practices Act terms. They may, for example,

without infringing the Trade Practices Act provide advice on ac-

counting, credit information, details

of

better business practices,

collection services, economic studies, technical aids, government

negotiations on behalf

of

industry, details of and representations in

industrial relations, legislative research, legal information, market

research, public relations and so on. . . . many of these activities

may foster competition.'

There is no denying this.

However, trade associations, almost by definition, have con-

siderable Trade Practices Act problems. By definition they are a

group

of

competitors who gather together and unite for the

specific purpose

of

furthering their own self-interest. They thus

constitute a type

of

anticompetitive dynamite which may explode

at any time to the detriment of others in the market or

of

members

of

the association itself who may become disaffected by

the association's view.

It

can readily be seen that parties may feel

aggrieved also at not being able to join an association or at being

(as they see it) unfairly expelled from it. Especially is this so when

quite specific benefits in the form

of

trade association services or,

in some cases, goods are denied by virtue

of

the exclusion.

All

of

this raises fundamental conflicts

of

views. Trade

associations often have humble beginnings. The association origi-

nally is founded in uncertainty and frustration and often with

second thoughts. An association may be formed by a gathering

of

two or three persons who admit others to their discussions from

time to time. Humble as these beginnings may be, the association

is often built up by the devotion

of

a lot

of

hard work and money

before it becomes a viable organization. There may well be a

natural reluctance to share these hard-earned benefits with new-

comers or at least with those who toil outside the association's

vineyards. Present members may well argue that they have a

"right"

to admit whom they like and to deny membership in their

absolute discretion.

Queensland Country Livestock Ass'n,

1981

A.T.P.R.

(Com.)

, 50-008.