Managing the competition risks of communication between competitors
| DOI | https://doi.org/10.1108/13581980710762309 |
| Published date | 31 July 2007 |
| Date | 31 July 2007 |
| Pages | 327-330 |
| Author | Fred Houwen |
| Subject Matter | Accounting & finance |
Managing the competition risks
of communication between
competitors
Fred Houwen
Reed Smith Richards Butler LLP, London, UK
Abstract
Purpose – The study sets out to report and comment, from a competition law perspective, on
communication between competitors.
Design/methodology/approach – The study outlines the facts and presents an opinion.
Findings – The study finds that communications between competitors can give rise to serious
competition risks. Such risks can be managed by putting in place a compliance programme. Such a
programme should make employees aware of topics to avoid and topics that are safe to discuss.
Originality/value – The study shows how employees need to be aware of when an issue falls within
a grey area of potentially problematic issues, so that they may seek advice where required. In
competition law, prevention is better than cure.
Keywords Competitors,Legal principles
Paper type Viewpoint
It is a truism that, in order to avoid breaching competition law, competitors should not
communicate with one another. In reality, it is almost inevitable that some degree of
communication between competitors will take place. Often competitors will come
across one another at events such as conferences or trade association meetings. They
may have entirely legitimate reasons to discuss matters of common interest. While
some subjects should certainly be avoided, discussion of other topics may not
be deemed to have an adverse effect on competition, and may even be considered to be
pro-competitive. The challenge is to manage such communications in a way that will
ensure compliance with the rules and to know where to draw the line between
legitimate discussions and those which may be deemed to be anti-competitive, and
therefore risk landing the individuals and companies concerned in trouble with the
competition authorities or before the courts.
From a competition law perspective, communications between competitors can be
placed along a spectrum with, at one end, communications that will virtually always be
problematic, and, at the other end, communications that may generally be considered
not to be anti-competitive. An agreement between competing producers to fix prices or
allocate markets between one another, for instance, would almost certainly be
considered to breach competition law and would fall at the former end of the spectrum.
On the other hand, a general discussion of proposed legislation or health and safety
standards affecting the industry would be unlikely to be considered to be problematic
and would ordinarily fall at the other end of the spectrum. Between these two extremes
lie a broad range of activities that are less easy to place along the spectrum. In such
cases, the communications in question have to be analysed in their broader context in
order to determine whether there is any scope for a competition authority or a court to
consider that competition could be adversely affected as a result. Examples of topics
that fall within the “grey area” of communications that may or may not be problematic
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
Communication
between
competitors
327
Journal of Financial Regulation and
Compliance
Vol. 15 No. 3, 2007
pp. 327-330
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710762309
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