Commerce Act guidelines for trade associations released
14 September 2010
The Commerce Commission has today released guidelines to help trade associations understand their obligations under the Commerce Act. The guidelines are part of new series of guidelines and fact sheets focusing on the Commerce Act.
"Belonging to a trade association can bring many benefits for members, such as discussing industry-wide issues and sharing technical information," said Kate Morrison, Commerce Commission General Manager, Enforcement. "However, member of trade or industry associations are usually competitors so care must be taken to ensure that associations and individual members do not behave in a way that lessens competition and risks breaching the Commerce Act."
"It is particularly important that all members of a trade association have an awareness of the Commerce Act, as an individual member can be held liable if the trade association that they belong to breaches the Act," said Ms Morrison.
The guidelines explain how the Commerce Act applies to trade associations and their individual members. It also includes practical steps that associations and members can take to reduce the risks of breaching the Act.
The guidelines can be downloaded from the Commission's website www.comcom.govt.nz/trade-associations
Penalties under the Commerce Act
Only the courts can rule if the Commerce Act has been breached and set appropriate penalties. If the Courts finds an individual or body corporate has breached the Commerce Act, the penalties that can be applied are:
- for an individual, a maximum of $500,000; or
- for a body corporate,
- the greater of $10 million, or
- three times the commercial gain (if this can be readily ascertained) or 10 per cent of turnover.