MBSIA Competition Law Compliance Summary
Competition Law compliance is not only for everyone, it is the Law
Definition
Competition/Antitrust risk is the potential for loss or harm created by failing to comply with competition/antitrust laws, including reaching unlawful understandings or sharing of competitively sensitive information with competitors or other employers
Why do we have to comply with Competition Law?
Competition Law aims to maintain the integrity of the marketplace by ensuring consumers get the benefit of competitive prices, service, quality, and robust innovation. It does this by prohibiting business activities that may substantially reduce or prevent competition.
Competition Laws carry both criminal and civil penalties for companies and individuals, including significant fines and imprisonment. Significant damages are also available to private plaintiffs (including through class actions) when Competition Laws are breached. Misconduct in this area could lead to significant harm to MBSIA members, including reputational impact. Implementing anti-competition practices prevention practices helps mitigate the related legal and regulatory risks and protects both MBISA members individually and as Corporate entities from these consequences.
Prohibited Agreements and Understandings
Certain agreements or understandings between Competitors are criminal offences for both MBSIA corporate members and the individual member(s) involved. Agreements and understandings may include:
- fixing, maintaining, increasing, or otherwise controlling or manipulating the price for the supply of products or services;
- limiting the quantity of products or services produced or supplied in a market;
- assigning or dividing markets, or agreeing not to provide products or services in certain territories or to certain customers (market allocation and boycotts); or
- coordinating any aspect of bids without informing the person calling for the bids (bid rigging).
Exchanges of Competitively Sensitive Information
Exchanges of competitively sensitive information between Competitors, or the disclosure or receipt of such information to or from a Competitor, may lead to criminal charges or civil penalties. Examples include information about contracts, transactions, orders, pricing, rates, fees, marketing plans, strategies, costs, profits, products, services, innovation or customers.
Associations and other Industry Groups Risk and Mitigating Actions
Trade Associations and other Industry Groups are groups where members are typically Competitors of each another and the purpose of the group is to further the business interests of the members or the industry as a whole. These might be formal, informal or even formed ad hoc.
These groups have benefits for members. However, whenever Competitors discuss business matters, they must exercise caution. To manage competition risk, Industry associations and groups should:
- Document and communicate its Competition Law guidelines, policies and/or procedures or other reasonable methods for ensuring awareness of Competition Law risks.
- Use reasonable efforts to ensure that meetings have a clear written agenda that is distributed in advance;
- Ensure the topics of discussion at each meeting are documented and retained (e.g. through meeting minutes); and
- Have an escalation mechanism where concerns can be reported to a central group for awareness and action
Below is a link from the government of Canada website regarding Trade Associations and the Competition Act that should be a valuable resource for member education.