A trade association , also known as an industry trade group , business association , sector association or industry body , is an organization founded and funded by businesses that operate in a specific industry . Through collaboration between companies within a sector , a trade association participates in public relations activities such as advertising , education, publishing and, especially, lobbying and political action . Associations may offer other services, such as producing conferences, setting industry standards, holding networking or charitable events, or offering classes or educational materials. Many associations are non-profit organizations governed by bylaws and directed by officers who are also members. (FEC: Solicitable Class of Trade Association). Many associations are non-profit organizations governed by bylaws and directed by officers who are also members. ( Library of Congress ).
23-588: The Optical Storage Technology Association ( OSTA ) was an international trade association formed to promote the use of recordable optical data storage technologies and products. It was responsible for the creation and maintenance of the Universal Disk Format (UDF) file system specification (derived from ISO/IEC 13346 and ECMA-167), which was notably adopted for DVD-Video . It was incorporated in California in 1992 and dissolved in 2018. In
46-402: A free market by limiting the abuse of monopoly power. Competition allows companies to compete in order for products and services to improve; promote innovation ; and provide more choices for consumers. In order to obtain greater profits, some large enterprises take advantage of market power to hinder survival of new entrants. Anti-competitive behavior can undermine the efficiency and fairness of
69-904: A market. In September 2007, the German trade association for Fachverband Verbindungs- und Befestigungstechnik (VBT) and five fastener companies were fined 303 million euros by the European Commission for operating cartels in the markets for fasteners and attaching machines in Europe and worldwide. In one of the cartels, the YKK Group , Coats plc , the Prym group, the Scovill group, A. Raymond, and Berning & Söhne "agreed [...] on coordinated price increases in annual 'price rounds' with respect to 'other fasteners' and their attaching machines, in
92-592: A role in social dialogue . One of the primary purposes of trade groups, particularly in the United States, is to attempt to influence public policy in a direction favorable to the group's members. It can take the form of contributions to the campaigns of political candidates and parties through political action committees (PACs); contributions to "issue" campaigns not tied to a candidate or party; and lobbying legislators to support or oppose particular legislation. In addition, trade groups attempt to influence
115-500: A specific corporate product, such as a specific brand of cheese or toilet paper, industry trade groups advertisements generally are targeted to promote the views of an entire industry. These ads mention only the industry's products as a whole, painting them in a positive light in order to have the public form positive associations with that industry and its products. For example, in the US the advertising campaign "Beef. It's what's for dinner"
138-409: A stabilized economic development and national welfare. With the implementation of anti-competitive practices, it will effectively remove the market inefficiencies and eliminate the dead weight loss from an economic viewpoint. As firms engage in fair competition, they act within government regulations and laws. There is sufficient evidence to conclude that anti-competitive practices can dramatically reduce
161-471: A trade association in the first place. Examples of larger trade associations that publish a comprehensive range of media include European Wind Energy Association (EWEA), Association of British Travel Agents (ABTA) and the Confederation of British Industry (CBI). Industry trade groups sometimes produce advertisements, just as normal corporations do. However, whereas typical advertisements are for
184-640: Is less competition. However, a net social benefit can be created, because when the two companies fight a continuous price war due to fierce competition, it will strongly distort the choices of consumers. Horizontal mergers can also easily lead to a monopoly, reducing consumers' choices and indirectly harming consumers' interests. The Chicago school of economics argues that vertical mergers, usually formed under anti-competitive intention, may be pro-competitive to eliminate double marginalisation . A chain of monopolists under can cause prices that extract beyond consumer surplus as wholesalers mark up prices, retailers have
207-847: Is used by the National Cattlemen's Beef Association to promote a positive image of beef in the public consciousness. These are adverts targeted at specific issues. For example, in the US in the early 2000s the Motion Picture Association of America (MPAA) began running advertisements before films that advocate against movie piracy over the Internet. Trade associations have faced frequent criticism due to allegations that they operate not as profit-making organizations, but rather as fronts for cartels involved in anti-competitive practices . Critics contend that these associations engage in activities such as price-fixing ,
230-588: The European Union , each member state must regulate unfair business practices in accordance with the principles laid down in the Unfair Commercial Practices Directive , subject to transitional periods. Based on research from Long in 2018, anti-competitive practices are not only an industry regulation behavior, but also a modern industry characteristic for stakeholders to compete in within an fair market system. Meanwhile,
253-431: The government 's approach to consulting business associations has been noted by the European Commission as a good practice example. Almost all trade associations are heavily involved in publishing activities in print and online. The main media published by trade associations are as follows: The opportunity to be promoted in such media (whether by editorial or advertising) is often an important reason why companies join
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#1732773362728276-770: The United States, outlined the potentially anti-competitive nature of some trade association activity in a speech to the American Bar Association in Washington, DC , in March 2005 called "The Good, the Bad and the Ugly: Trade Associations and Antitrust ". For instance, he said that under the guise of "standard setting", trade associations representing the established players in an industry can set rules that make it harder for new companies to enter
299-509: The activities of regulatory bodies . In the United States, direct contributions by PACs to candidates are required to be disclosed to the Federal Election Commission or state and local election overseers; are considered public information; and have registration requirements for lobbyists (FEC: Lobbyist). Even so, it can sometimes be difficult to trace the funding for issue and non-electoral campaigns. In Slovenia ,
322-439: The autumn of 2007, OSTA spearheaded a campaign to encourage families and photographers to back up their digital photographs on compact discs. This article about a business, industry, or trade-related organization is a stub . You can help Misplaced Pages by expanding it . Trade association In countries with a social market economy , the role of trade associations is often taken by employers' organizations , which also take
345-411: The broader economy. Anti-competitive behavior is used by business and governments to lessen competition within the markets so that monopolies and dominant firms can generate supernormal profits and deter competitors from the market. Therefore, it is heavily regulated and punishable by law in cases where it substantially affects the market. Anti-competitive practices are commonly only deemed illegal when
368-477: The creation and maintenance of barriers to entry in the industry, and other subtle self-serving actions that are detrimental to the public interest. These criticisms raise concerns about the true nature and intentions of trade associations, questioning their commitment to fair competition and the welfare of the broader economy. Jon Leibowitz , a commissioner at the Federal Trade Commission in
391-399: The framework of work circles organised by VBT". Anti-competitive practices Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws ensure businesses do not engage in competitive practices that harm other, usually smaller, businesses or consumers. These laws are formed to promote healthy competition within
414-403: The market, leaving consumers with little choice to obtain a reasonable quality of service. Anticompetitive behavior refers to actions taken by a business or organization to limit, restrict or eliminate competition in a market, usually in order to gain an unfair advantage or dominate the market. These practices are often considered illegal or unethical and can harm consumers, other businesses and
437-421: The monopolist market system, anti-competitive practices are a useful method to reduce the manipulation of business giants and potential colluding actions. Furthermore, the research emphasized the market conduct of state monopolies is no different from that of other firms and market power serves as the motivation for anti-competitive behavior of firms. Anti-competitive practices are also a useful approach to sustain
460-566: The power to transfer this cost price onto the retail price. Unfair competition includes a number of areas of law involving acts by one competitor or group of competitors which harm another in the field, and which may give rise to criminal offenses and civil causes of action . The most common actions falling under the banner of unfair competition include: Various unfair business practices such as fraud , misrepresentation , and unconscionable contracts may be considered unfair competition, if they give one competitor an advantage over others. In
483-423: The practice results in a substantial dampening in competition, hence why for a firm to be punished for any form of anti-competitive behavior they generally need to be a monopoly or a dominant firm in a duopoly or oligopoly who has significant influence over the market. Anti-competitive behavior can be grouped into two classifications. Horizontal restraints regard anti-competitive behavior that involves competitors at
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#1732773362728506-414: The research results also significantly involved the economic theories to predict the relevant encouragement. This article explained the relevant variables in determining the extent of anti-competitive markets too. In perfectly competitive markets, anti-competitive practices are not necessary, since each business already have full information on their competitors pricing, strategy and major actions. However, in
529-726: The same level of the supply chain. These practices include mergers, cartels, collusions, price-fixing, price discrimination and predatory pricing. On the other hand, the second category is vertical restraint which implements restraints against competitors due to anti-competitive practice between firms at different levels of the supply chain e.g. supplier-distributor relationships. These practices include exclusive dealing, refusal to deal/sell, resale price maintenance and more. Also criticized are: Horizontal merger refers to improving efficiency by reducing consumer distortion of firm choice and price heterogeneity. When two companies with similar products or product characteristics merge horizontally, there
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