The Legal Regulation of the Information Exchange for Trade Association in China

Abstract. In the modern society where information is efficient， information exchange is an important affair and function of trade association. However， information exchange behaviors of industry association will have double and legal effect on market and competition， which can not only promote the communication among members of the industry to find a solution to the industry benefit maximization， but also can produce inhibition and barriers to competition in the market. So in this paper， the industry association analysis will be made on the pros and cons of the information exchange， and the legislative defects and the insufficiency of information exchange industry association in our country. According to the practice in our country， the author puts forward the system design of our country industry association information exchange behavior.

Key words： Industry association Restrict competition Information exchange Law regulation

Modern society is information society. Information is the most important resource in modern society. The incomplete and asymmetry of information is the key cause of incomplete market and the important reason for the inefficient allocation of resources. 1） As mutually beneficial industry organization， industry association’s operation and system will enable the enterprise to reduce incomplete and asymmetric information， strengthening association member groups， and realizing members benefit maximization. However， at the same time when industry association provides information exchange platform between enterprise information such as price， production， sales for the bulletin， prone to price alliance is formed between the members of the association or other inducing enterprise members. Therefore， the information exchange will lead to the effect of restricting competition.

1. An Analysis of the Pros and Cons of Information Exchange and Industry Association

1.1 The Advantage of Information Exchange of Industry Association

1.1.1 To Promote the Industry Association Members to Share Information， Reduce the Search Costs of Member Information

Information is the important market resources， and information access often needs a lot of cost， when a single enterprise operates， you need to bear the huge cost， and in the same industry your may also， because there is no common platform between enterprises， in some repeated publicly available information resources， you pay costs， not only to the enterprise cost pressure， but also make the waste of social resources. The exchange of information and industry association for the industry provides a platform of sharing resources between members， it can be huge information acquisition cost allocation to each member， and ensure that members of the search with the lowest cost， high information value.

1.1.2 To Reduce Regulation Failure of Industry Association

Industry association is carrying the rights of government authorization， assignment or industry members and responsible for the market control power， and members within companies of the industry are regulated， and regulators are often blinded to make use of information advantages， regulation and control of industry association are against the pertinence and effectiveness.

1.1.3 To Enhance the Well-being of Consumers

After the standardization and certification of industry association for such information exchange are reported， not only does it save the member enterprise search costs， but also provides a basis for the level of consumer to know the quality of the goods and indicators. Industry associations’ exposure and disclosure of unqualified products make warning to consumers.

1.2 The Disadvantages of Information Exchange in Industry Association

Posner has pointed out that the competitors have an incentive to take all necessary measures to coordinate their pricing in advance， but not to their agreed price， which is the most important measures to exchange each seller the price recently， or want to how much information in the future， this kind of exchange can lead to collusion. （2） As a result， information exchange has become a way of implied limit competition； especially the information exchange is most likely to lead to price cartel behavior， but due to the widespread existence information exchange and particularity， as a kind of independent limit competition is to be made in this research.

There are two kinds of ways for information exchange of industry association： one kind of information exchange is led by industry association or industry association by industry associations for the members to establish information exchange platform. This way is by the industry association to collect information related to the factors such as price， yield， or through the site by industry association， the electronic system or publications published between members in the form of a variety of market information， this association between members of the information such as costs， price control at any time， price rise in price， the price between members follow time， and feel easy to form the price convergence and harm competition.

Another way of information exchange of industry association is by members of the conspiracy between businesses in the future business plan or the exchange of staff learning communication way. Announced future business plans tend to be big company which takes the lead， lead enterprise business plan for the future announcement or collusion， which can make the other peer companies to adjust their production and project plan， even if it did not form the convergence and follow up on the price in the short term， but the product production and the enterprise development plan adjustment strategy will eventually emerge from product quality or market price， and so on and so forth opposite consistency， it is also can produce adverse effect of anti-competitive； Industry association sent staff to learn from each other， to business enterprise member's comprehensive level of help， but the practice of directly to the direct purpose is through the exchange of mutual collusion between channels， and to form a DE facto cartels.

2. The Flaw and Insufficiency of Legal Regulation on Information Exchange of Industry Association in China

2.1 Law Vacancy of Information Exchange of Industry Association

Early promulgated Regulations on Registration Management of Organizing made relevant regulations on conditions for the establishment of industry associations， function and inner workings. The current laws， in addition to the Anti-monopoly Law， Price Law which have scattered about industry association restrict competition behavior， no special regulation about a guild limit competition behavior's legal exists， and there is no law about information exchange in trade association. So that is a great gap in the legislation， however， in the current industry association restrict competition behavior， it is apparent， and to form a variety of situations is a need to fill the blank of the legislation.

2.2 No Clear Main Responsibility of Information Exchange in Industry Association

The article 46 of Anti-monopoly Law only regulates limited competition behavior of industry association， and the industry association penalty， but there are no regulations for members of the enterprise's illegal responsibility issue. The regulation of our country antimonopoly law on trade association legal responsibility also has many needs to be perfect. Despite the anti-monopoly law enforcement agencies mentioned two new rules， industry association organization industry operators implement monopoly agreements， which will be in accordance with article 46 of antimonopoly law and the provisions of article 49， will be punished， but that does not mean illegal industry association group and operator's double punishment.

2.3 The Missing Exemption System of Information Exchange in Industry Association

In addition of "itself as the method of principle"， there is also "reasonableness" in U.S； Japan's Against Limiting Competition has special provisions in the immunity system. But the article 15 in china's Anti-monopoly Law provides immunity， but its subject is aimed at "operator"， rather than industry association， so the exemption of trade association in our country is still blank.

3. System Design for Information Exchange of Industry Association in China

3.1 the legal regulating of the national industry association information exchange are not identical， which are based on its national conditions and social reality， and then formulate law countermeasures. As a result， our country's industry association information exchange system design should be based on the domestic economic situation， and formulate reasonable regulation. The author suggests that based on the current China's national conditions， industry association information exchange system design should be wide， the reasons are as follows：

3.1.1 To Adapt to the Global Background of Highly Developed Information

At present， China is facing an era of "information explosion"， every country， every industry， large numbers of information are produced and fleeting. Comprehensive， timely and effective control of information is particularly important for the success or failure in the competition of an enterprise. Industry information’s collection and feedback， for individual enterprise to obtain and exploit， appear complex and heavy， this requires the enterprise cooperation and communication. And industry associations to gather information for the enterprise， provides the platform and widens the channels for enterprises to get the initiative in the information age and provides supports.

3.1.2 To Adapt to the Stage Needs of Our Country as a Developing Country

China is a developing country， in which a large number of small and medium-sized enterprise is the main force， compared with the developed countries the strength is weak， especially after China's accession to the WTO， more obvious disadvantage appears. In order to protect the national industry， to a certain extent to compete with foreign influx of big business， it is necessary to support the industry association information exchange； we should be in solidarity against the members of the industry from the impact of the foreign investment.

3.1.3 To Strengthen the Needs of Civil Society

Industry association， as the basic power of civil society， is the bridge of communication enterprises and the government. Members of the industry association， by absorbing folk organization， can enhance the cohesive affinity of the civil society. And industry associations， absorbing the members of the industry through free or low charge by providing information exchange， can attract members to join the association.

3.2 On the premise of the system design concept， for our country’s industry association information exchange system design， the author has the following ideas：

3.2.1 Led by industry association for the exchange of information， the principle shall be deemed as valid， but if industry association has clear and fixed price of every member， the price cartel behavior can be regarded as industry association rules and regulations. Instead of clear requirements， and the industry association members of enterprise have spontaneous price convergence， then it can make the rationality principle as a benchmark to judge.

3.2.2 The behavior of the corporate business plan depends on the enterprise market share and future business plans and losses of the specific issues specific analysis of the consumer rights and interests， if it is a small business or market absolute superiority generally does not constitute a limitation of competition of enterprise， which is not illegal， but if it is a big business， the business plan benefit consumers in goods quality， price， etc， should also not be illegal， but if it is to raise prices， restrictions on product production plan， for the purpose of sales should be viewed as the collusion of limiting competition behavior.

3.2.3 Industry association edits the guide of price behavior， if it is expressly forced guiding price， the price should be named as limiting competition behavior， which belongs to a price alliance of guiding behavior； If there is a range of price or the price does not have any mandatory， it should not be regarded as illegal， and shall be considered as the relevant evidence.

3.2.4 Members of industry association enterprise voluntary exchange should not be illegal， but for the intersection of director of employment should be on duty in the fields of authority and refining the restrictions.

References

[1] Fang Gang： The Market Economy And The Economic Efficiency ，Shanghai Sanlian Bookstore 1992 P118.

[2] [USA] Richard A. balls： Antitrust Law，Translated by Sun Qiuning， China University of Political Science and Law press， 2003 edition， P112.