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Competition and anti-trust

 
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We believe in free competition. Group companies must compete fairly and ethically, in line with competition (or 'anti-trust') laws

How competition law affects our business

Competition law impacts on almost all aspects of our activities, including sales and display, our relationships with suppliers, distributors, customers and competitors, our negotiation and drafting of contracts, and when we are deciding pricing strategy and trading conditions.

The law is linked to market conditions, which will affect how a competition issue is approached, such as:

  • market concentration;
  • product homogeneity and brand differentiation; or
  • regulation, including advertising restrictions, display bans and public smoking bans

Commitment to fair competition

We are committed to vigorous competition and to complying with competition laws in each country and economic area in which we operate.

Many countries have laws against anti-competitive behaviour. They are complex and vary from one country or economic area to another, but failing to comply with them can have serious consequences.

Parallel behaviour

Parallel behaviour with our competitors is not anti-competitive by default, but we must not collude with our competitors to:
  • fix prices or any element or aspect of pricing (including rebates, discounts, surcharges, pricing methods, payment terms, or the timing, level or percentage of price changes)
  • fix other terms and conditions
  • divide up or allocate markets, customers or territories
  • limit production or capacity
  • influence the outcome of a competitive bid process
  • agree a collective refusal to deal with certain parties

'Agreement' in this sense includes a written or oral agreement, understanding or practice, a non-binding agreement or action taken with a common understanding, or an indirect agreement brokered by a third party, such as a trade association, customer or supplier.

It also includes situations where competitors share (directly or indirectly) information with a view to reducing competition. For example, competitors might inform each other of future price increases so they can co-ordinate their pricing policies (known as a ‘concerted practice’).

Meeting with competitors

Any meeting or direct talk with our competitors should be treated with extreme caution. We must keep careful records of them, and break off if they are, or they may be seen as, anti-competitive.

Not all arrangements with competitors are problematic. Legitimate contact can be in the context of trade associations, certain limited information exchange, and joint initiatives on regulatory engagement or public advocacy.

Competitor information

We may only gather information about our competitors by legitimate legal means, and in compliance with competition law.

Obtaining competitor information directly from competitors is never justifiable, save for very limited and exceptional circumstances.

Gathering competitor information from third parties (including customers, consultants, analysts and trade associations) often raises complex local legal issues and should only be undertaken with proper advice.

Dominant position

Where a Group company has 'market power', it will typically have a special duty to protect competition and not to abuse its position.

The concepts of 'dominance', 'market power' and 'abuse' vary widely from country to country.

Where a Group company is considered to be dominant in its local market, it will generally be limited in its ability to engage in practices such as exclusivity arrangements, loyalty rebates, discriminating between equivalent customers, charging excessively high or low (below cost) prices, or tying or bundling together different products.

Resale price maintenance

Certain restrictions between parties in different levels of the supply chain, such as resale price maintenance provisions between a supplier and a distributor or reseller, may be unlawful.

Restrictions on our customers' ability to resell into territories or to certain customer groups may be a serious competition issue in certain countries.

Resale price maintenance is where a supplier seeks to, or does in fact, control or influence (including indirectly, through threats and/or incentives) the prices at which its customers resell its products.

Rules on resale price maintenance and resale restrictions vary across the world. If relevant to your role, you need to be familiar with the rules applicable in the countries for which you are responsible.

Mergers and acquisitions

Where Group companies are involved in mergers and acquisitions, mandatory filings may have to be made in one or more countries.

Filing obligations vary from country to country, but should always be checked in the context of mergers, acquisitions (of assets or shares) and joint ventures.

Seeking specialist advice

If we are involved in business activities where competition laws may be relevant, we must follow regional, area or market guidelines that give effect to Group policy and the law in this area, and consult with our local LEX Counsel.

We should not assume that competition law will not apply simply because there are none in effect locally. Many countries, such as the US and within the EU, apply their competition laws extra-territorially (where conduct occurs, and where it has effect).

Exchanging salary information and “no hire” agreements

Agreements among competitors regarding wages and benefit levels are illegal.  Sharing competitively sensitive wage and benefits information with competitors can also raise competition issues, and you should always check with LEX antitrust counsel before considering such activities.

Agreements among competitors not to hire or solicit each other’s employees can also raise competition concerns, unless they are reasonably related to legitimate transactions.  You should always check with LEX antitrust counsel before considering such activities.

Who to talk to

Your line manager
Higher management
Your local LEX Counsel
Head of Compliance:
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