When is information exchange between commercial organisations legitimate and beneficial and when could it end up in an investigation for anti-competitive practices? This ambiguous area of competition law is one that is widely misunderstood by businesses as it’s often a difficult distinction to make. On the one hand, sharing business intelligence can actually enable competition for example by increasing transparency, assisting with joint research ventures or helping to establish standard codes of practice. On the other hand, the sharing of commercially sensitive information could be seen as collusion damaging to competition.
Following a review of its competition law guidance, the UK Office of Fair Trading (OFT) has this month announced its intention to clamp down on companies who breach competition laws by substantially increasing fines for those found guilty. It is expected that fines for more serious offences could increase from 10% of turnover to as much as 30%, representing a serious deterrent to those tempted to engage in anticompetitive behaviour. Such a punitive fine is surely an incentive for firms to review antitrust compliance programmes to ensure they are doing all they possibly can to embed a compliance culture and avoid being brought down by the unscrupulous actions of rogue individuals.
In February of this year, the French Competition Authority became the latest government body in Europe to issue guidance on competition law compliance, hot on the heels of similar guidance issued by the UK’s Office of Fair Trading mid-way through last year, and the EU Commission in November. In line with the UK and EU agencies, the French authority is underlining the importance of a compliance programme and is encouraging businesses to implement a proactive strategy designed to prevent and detect anti-competitive behaviour. And the reward for implementing a robust and effective antitrust compliance programme? A potential reduction in fines meted out by both the OFT and the French competition authority for antitrust infringements - which given the potential scale of penalties (ie. 10% of global group turnover) could equate to quite a considerable sum.
In late November, 2011, the EU Commission, responsible for enforcement of EU-wide competition law, issued its first-ever guidance on competition law compliance programs. This 22 page document, EU Commission, Compliance matters: What companies can do better to respect EU competition rules, Special first edition, (Nov. 2011) is an important reference for those dealing with compliance programs in Europe.
If you have anything to do with FCPA and anti-corruption compliance you have probably heard repeatedly about the news from the UK; the UK Bribery Act 2010 provides a defense for corporate liability based on having "adequate procedures" to prevent violations, i.e., an effective compliance program. But this story has crowded out another important news item for compliance professionals who are involved in the UK market. The UK’s Office of Fair Trading (OFT), the country's major enforcer of competition law, issued a guidance on competition law compliance programs called "How your business can achieve compliance with competition law," in June 2011. This document offers guidance to compliance and ethics professionals on what should be in a compliance program in this area.
In June 2011, the United Kingdom’s Office of Fair Trading ("OFT") published two new sets of guidelines intended to assist companies to reduce their risk of liability in the UK for cartel involvement by the adoption of appropriate compliance policies and measures. These new UK guidelines will be helpful to companies operating in other jurisdictions in that they provide useful advice, in broad terms, on how to establish a competition culture.
2011 will be a make-or-break year for private antitrust litigation in Europe. The European Commission's November 2010 decision regarding the alleged airfreight cartel is already the subject of "follow-on" litigation in the UK and the Netherlands. In 2011, as the result of Airfreight, we will obtain a much clearer view on whether U.S.-style class actions will be coming to Europe. Plaintiffs will find that EU national courts (and legislatures) are still not very receptive to such litigation.
The incoming Competition Commissioner, Joaquin Almunia, who takes office as from February 2010, has been the Commission's Economic Affairs Commissioner. Companies can probably expect more vigorous EU competition law enforcement from Mr. Almunia, in particular, involving abuses of dominant position, vertical restraints and issues involving the antitrust/IP interface (e.g. refusals to license, discriminatory licensing etc.)
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