Fair & Legal Competition
As an employee of BBNC, you know that competition is an important part of winning contracts. There is an art to creating a deal that satisfies the customer, earns revenue, and secures future business. But how well do you understand the laws and regulations that control competition in the U.S. or other countries where we do business?
Antitrust laws are designed to prohibit any activity that improperly limits or inhibits competition without giving any corresponding benefit to the consumer. Many people think these laws apply only in the executive offices of huge corporations, but in fact, they apply to every employee engaged in competitive activities. Even an informal discussion or understanding with a competitor can violate laws and incur penalties for individuals and BBNC.
Fair competition and antitrust laws are meant to protect and promote competition for the benefit of customers worldwide. U.S. and European regulations are becoming especially tough on certain offenses, and in the U.S. the sentencing guidelines require judges to give significant jail time to individuals involved in wrongdoing. To protect yourself, our customers, and BBNC, you must be aware of the issues involved in these laws.
Fair Competition or Collusion?
If you have an occasion to deal with competitors in the normal course of business, be aware that regulators draw a definite line between fair competition and collusion.
Examples of illegal agreements between competitors include:
– Price fixing – An agreement between competitors to fix sales or purchase prices.
– Bid rigging – Any understanding between competitors that affects the fair bid process, such as agreeing to bid high or low, or fixing bid prices or conditions or sale.
– Market sharing – Agreements to divide or allocate sales territories, customer lists, or bids.
– Group boycotts – Competitors refusing to purchase specific products or services, or refusing to sell to certain customers.
– Exchange of information – Competitors swapping price lists or cost information, which often leads to prices rising to the same level. Legal sources of this information include the Internet, advertisements, published price sheets, public records, or conversations with customers.
Antitrust offenses do not have to include a contract or anything in writing. Even the appearance of an understanding with a competitor can bring serious penalties. The safest course of action is to avoid meetings and communication unless they are public and clearly for a legal purpose. Avoid discussing prices, credit terms, customers, upcoming bids, sales territories, profits or margins, strategies or plans with competitors.
Antitrust laws also apply to the agreements we make with our customers. Arrangements with distributors or dealers must not include customer or territorial restrictions, tying one product to another, or exclusive dealing agreements. Such arrangements could be considered collusion or price-fixing.
No matter how minor, collusion or antitrust violations are generally indefensible, often incurring penalties that far exceed the gain sought by the wrongdoing. Corporate criminal liabilities can reach into the tens of millions of dollars. Antitrust violations for individuals are considered felonies and carry increasingly heavy prison sentences.
The best course of action is to compete fairly and always operate within the laws and regulations of the U.S. and the countries where BBNC does business.
– Use caution in any written communication with our competitors.
– Avoid “bad intent” language like; run them out of business or squish them like a bug.
– Accentuate positives about our company and products rather than disparaging the competitor.
– Follow our company policies and process when a dealer is terminated.
– Check with legal when a new sales program is launched that involves two or more of our products being sold together.
I just got confidential information about a competitor. I didn’t ask for it, but this kind of information could be very useful to our companies. What should I do?
You should not read or photocopy this information. Call the legal department to discuss how the information was acquired that will determine if you may use it or not. If you can use it, follow the legal department’s instruction for documenting the source of the information.
An acquaintance told me that one of our competitors was making false and misleading statements about our company. Should I respond?
The competitor’s tactic is unfair, but responding in kind is not what you should do. Emphasize the positive aspects of our products and services. Respond with facts and references. Compete fairly.
One of our subsidiary’s suppliers has told them that they can’t sell their services for more than a certain price. Isn’t this price-fixing?
This kind of price regulation is designed to protect the end-user. Therefore, it would likely be considered in support of fair competition and antitrust laws.
At a meeting of my professional association, some of the members talked about a plan to divide their territories to reduce competition. I didn’t agree to participate, but what should I say if this happens again?
Collusion is a serious antitrust violation. If it happens again you should immediately excuse yourself from the meeting and state loudly and clearly that you couldn’t be part of such a discussion. Contact the Office of General Counsel for legal advice.
I’m going to a trade association meeting next month. May I discuss our chances of receiving a contract award with other bidders who will be there?
No. You should not discuss contract awards, prices, bids, terms of contracts, or similar proprietary business information with employees of competing firms.