Journal of Business Ethics

, Volume 11, Issue 12, pp 915–920 | Cite as

Self-regulating industry behavior: Antitrust limitations and trade association codes of conduct

  • Thomas A. Hemphill


Self-regulation exists at the firm-level, the industry-level, and the business-level of economic organization. Industry self-regulation has faced economic (“free rider”) and legal (antitrust) impediments to widespread implementation, although there exist examples of effective industry self-regulation, e.g., securities industry and the SEC, advertising and the FTC. By instituting industry codes of conduct, national trade associations have shown to be natural vehicles for self-regulation. While there has been long-standing general encouragement for establishing industry codes, adopting and enforcing conduct codes has been seriously circumscribed by restrictive Supreme Court decisions and FTC advisory opinions. One approach to clearing legal confusion is to petition the FTC to issue an industry guide on promulgating and enforcing trade association codes of conduct. Another strategy is to utilize a stakeholder approach to association ethics committee appointments that subsequently influence code creation and enforcement. Finally, a new concept of an industry code of conduct will consist of three subcodes: an economic code; an environmental code; and a socio-political code. Combined, these strategic approaches will offer new opportunities for effective nonmarket regulation.


Free Rider Supreme Court Decision Stakeholder Approach Advisory Opinion National Trade 
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Copyright information

© Kluwer Academic Publishers 1992

Authors and Affiliations

  • Thomas A. Hemphill
    • 1
  1. 1.Institute of Scrap Recycling IndustriesWashington, D.C.USA

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