The Do’s and Don’ts of Meeting Your Competitors
We all inevitably meet our competitors from time to time. Indeed, the world of business simply couldn’t function if we did not meet our competitors in certain circumstances, such as at trade association meetings. While there is no legal prohibition on competitors meeting each other, there are strict competition law rules prohibiting such meetings where they result in a breach of competition law. Such breaches can result in prosecutions leading to fines and even imprisonment, writes John Darby from Flynn O'Driscoll.
In order to ensure that the competition law rules are not broken, you should always bear the following in mind when meeting your competitors:
- Do make sure there is a legitimate purpose for the meeting and that it is not a cover for anti-competitive activity such as price fixing or market sharing.
- Do be aware that just because a meeting is part of a trade association, there is no extra protection or cover if the meeting is anti-competitive.
- Don’t exchange competitively sensitive information with competitors such as recent, current or future pricing, output or trends.
- Don’t jointly set prices or other sales terms such as discounts, rebates or credit terms with your competitors.
- Don’t agree to allocate markets or customers with your competitors.
- Don’t agree to refrain from bidding for any contract.
- Do object to any attempt by others to raise or agree on any anti-competitive strategy or arrangement and, when your objection is made, leave the meeting immediately.
- If there are to be prolonged exchanges with competitors, do consider drafting a written protocol, which sets out the rules of engagement between the parties.
- Don’t allow discussions to veer off the agreed agenda or beyond the purpose of the meeting.
- Do remember that there is no such thing as an “off the record” conversation.
- Do remember that competition law rules apply to social events and encounters.
- Do obtain legal advice prior to any meeting or discussion with competitors.
It is remarkable how many business people end up sharing information with their competitors that they would never share with colleagues within their own organisation. They need to remember that they do not have to answer a question simply because it is put to them. When it comes to competition law compliance, silence is golden. You should always avoid speculating or discussing issues that are even potentially risky from a competition law perspective.
If you are unsure as to whether or not you can share specific
information with a competitor, ask yourself these questions:
- Would I be worried if this information were lost on my laptop?
- Could a competitor use this information to harm my business?
- How many people in my organiation even know this information?
The consequences of breaching competition law are serious and wide-ranging. It is therefore important that you do not do any anything that can put both you and your business at risk through the sharing of information.
Written by: John Darby, Consultant, Flynn O'Driscoll – Business Lawyers
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