Competition and antitrust
We believe in free competition. Group Companies must compete fairly and ethically, in line with competition (or ‘antitrust’) 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, M&A transactions, our negotiation and drafting of contracts, and when we are deciding pricing strategy, commercial strategy and trading conditions. The law is sometimes 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.
Some behaviours are prohibited irrespective of market conditions.
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.
We must not collude with our competitors (directly or indirectly via any third party) to:
- fix prices or any element or aspect of pricing (including rebates, discounts, surcharges, pricing methods, payment terms, the timing, level or percentage of price changes, or terms of employment)
- fix other terms and conditions
- divide up or allocate markets, customers or territories
- limit or prevent production, supply or capacity
- influence the outcome of a competitive bid process
- agree a collective refusal to deal with certain parties, including no-hire agreements
- exchange commercially sensitive information or otherwise restrict competition
Meeting with competitors
Any meeting or direct or indirect contact with competing manufacturers 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.
The same approach should be taken with other companies if the contact relates to competition between them and us.
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.
Similarly, some agreements with competitors may restrict competition but be legal if the wider benefits outweigh any harm. Specialist legal advice must be sought before considering any arrangement with competitors, to ensure it does not restrict competition or risk being viewed as collusive.
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 legal advice.
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, tying or bundling together different products or otherwise unfairly taking advantage of its market position.
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 (M&A)
Where Group Companies are involved in mergers and acquisitions, mandatory filings may have to be made in one or more countries before the transaction completes (whether under competition laws, foreign investment laws or otherwise).
Filing obligations vary from country to country, but should always be checked in the context of mergers, acquisitions (of assets or shares), joint ventures, including minority investments, and other changes in control.
All Group Companies must manage the flow of information appropriately in transactions and follow the M&A Transactions Compliance Procedure.
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 extraterritorially (where conduct occurs, and where it has effect).
Exchanging salary information and ‘no hire’ agreements
We cannot make agreements or otherwise collude with competitors regarding wages and benefit levels. Sharing competitively sensitive wage and benefits information with competitors can also raise competition issues, and you should always check with LEX Counsel for specialist advice before considering such activities.
Agreements among competitors not to hire, poach 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 Counsel for specialist advice before considering such activities.
‘Competitors’ in the human resources context includes a much wider range of companies/organizations in other industries and sectors because we are competing in a much wider market for talent.
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 extraterritorially (where conduct occurs, and where it has effect).
Who to talk to
- Your line manager
- Higher management
- Your local LEX Counsel
- Head of Compliance: email@example.com