Introduction
This checklist sets out steps for an organisation to take to mitigate competition law risk when its employees are meeting with a competitor. It is aimed at in-house lawyers and compliance professionals across various industries and organisations who may be subject to EU competition law.
Meetings with competitors (or where competitors are present) pose a high risk of encountering competition law compliance issues and receive great scrutiny from competition law enforcers due to the high risk of legal misconduct.
The steps in this checklist can mitigate against wrongdoing or the risk of being involved in inappropriate actions or discussions in relation to competition law matters.
This checklist covers the following:
- Steps to be taken before the meeting;
- Steps to be taken during the meeting;
- Steps to be taken after the meeting.
It is presented as a list of requirements than can be ticked off they are reviewed. At the end of the document there are explanatory notes and specific notes corresponding to the relevant step in the checklist.
The checklist can be used in conjunction with How-to guides: Understanding the competition law prohibitions in Article 101 and 102 TFEU, How to implement a culture of compliance with competition law in your organisation, How to design a competition law compliance programme, How to identify and prioritise competition law risk in your organisation, How to identify and address competition law infringements and Checklist: Competition law compliance.
Step 1 – Steps to be taken before the meeting
| No. | Task name | |
|---|---|---|
| Circumstances of the meeting | ||
| 1.1 | Review circumstances of meeting, eg, trade association, industry roundtable, industry best practices discussion, domestic or overseas | |
| 1.2 | Identify relevant internal records of reasons for meeting or information sharing (eg, on prices and customers etc.) | |
| 1.3 | Consider and record business arrangements including rationale and benefits of meeting with competitors | |
| 1.4 | Ensure relevant due diligence is conducted in advance of a meeting | |
| Identification of risk | ||
| 1.5 | Use your competition law risk assessment to identify information exchange risks to your business | |
| 1.6 | Identify possible exposure to risk arising from information exchange with competitors (such as third-party actions, regulatory investigation or enforcement) | |
| Preparation of employees | ||
| 1.7 | Provide competition law guidance and training for staff who attend meetings with competitors | |
| 1.8 | Provide employees attending meetings with a list of dos and don’ts specific to competition law | |
| 1.9 | Ensure staff understand – in advance of any meeting – the necessity for the careful logging, management and compliance with competition law principles when meeting with competitors | |
| 1.10 | Ensure guidance on record keeping protocols in relation to meetings with competitors is provided to staff | |
Step 2 – Steps to be taken during the meeting
| No. | Task name |
|---|---|
| 2.1 | Ensure the meeting is transparent and executed and documented correctly to demonstrate its purpose (for instance, to enhance competition or market standards) |
| 2.2 | Collate and record detailed and accurate meeting minutes |
Step 3 – Steps to be taken after the meeting
| No. | Task name |
|---|---|
| 3.1 | Review information exchanges with competitors for compliance with best practice guidelines |
| 3.2 | Ensure all staff members identified by your competition law risk assessment are debriefed after meetings with competitors |
| 3.3 | Identify possible exposure arising from information exchanged with competitors (such as third-party actions, regulatory investigation or enforcement) |
| 3.4 | Identify any competition law compliance lessons that are relevant to information sharing with competitors |
| 3.5 | Review and update your organisation’s compliance programme with any new lessons learned (internally or externally) |
Explanatory notes
General notes
This checklist incorporates the steps to follow when meeting with a competitor and are gathered from competition law procedures that are intended to preserve competition within the market by prohibiting anti-competitive practices.
This checklist provides a basic guide, informed by competition law principles, that staff and participants at meetings can comply with when preparing, organising, and attending meetings with competitors to ensure compliance with competition law rules. See How-to guide: How to identify and prioritise competition law risk in your organisation.
Legal framework
There are many circumstances in which competitors may meet and many reasons why competitors might meet with each other. Competitors might, for example, meet in the context of:
- participation in a horizontal cooperation agreement (such as a joint commercialisation agreement);
- a vertical agreement (eg, between a supplier and buyer);
- a merger or acquisition; or
- industry meetings such as trade union meetings.
Organisations are not prohibited from meeting with competitors, and the exchange of information between competitors may generate various types of efficiency gains, such as solving problems of information asymmetries, helping companies to improve internal efficiency, saving costs and enabling companies to develop new or better products or services. However, Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits anti-competitive practices during such meetings, which, if breached, has consequences. See How-to guides: Understanding the competition law prohibitions in Article 101 and 102 TFEU and How to identify and address competition law infringements. Therefore, it is important that care is taken when competitors meet to ensure that the meetings are not used as a means of colluding and that any information exchanged does not infringe the Article 101(1) prohibition.
An exchange of information between competitors will fall within the scope of the Article 101(1) prohibition where it establishes or is part of an agreement between undertakings, a concerted practice or a decision by an association of undertakings, which may affect trade between Member States and which has as its object or effect the prevention, restriction or distortion of competition within the internal market.
The Article 101(1) prohibition applies to exchanges of commercially sensitive information which are likely to influence the commercial strategy of competitors, thereby creating or being capable of creating conditions of competition that do not correspond to the normal conditions of the market in question. The type of information that might be considered to be commercially sensitive includes information on: pricing, costs, capacity, quantities, market shares, customers, plans to enter or exit markets, or information concerning other important elements of a company’s strategy that would not normally be revealed to a competitor.
Exchanges of commercially sensitive information between competitors may be bilateral or multilateral, but a unilateral exchange of commercially sensitive information to a competitor (who requested it or at the very least accepts it) can constitute a concerted practice where the recipient acts upon it and where there is a link of cause and effect between the disclosure and the recipient’s subsequent conduct on the market. Where an undertaking receives commercially sensitive information from a competitor during a meeting or other contact, that undertaking will be presumed to take account of such information and to adapt its market conduct accordingly, unless it publicly distances itself (for example, by responding with a clear statement that it does not wish to receive such information) or reports it to the administrative authorities.
For further detail on the competitive assessment of information exchanges, see the European Commission’s Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements.
As a result of this, it is important to carefully manage meetings with competitors, which can include informal or formal discussions or communications. Additionally, it is important to know that unlawful conduct during meetings with competitors can be established without a written agreement but by mere communication of information.
Step 1 – Steps to be taken before the meeting
Step 1 of the checklist considers the information required to assist with preparing and attending a legally compliant meeting with a competitor.
Circumstances of the meeting
1.1 Review circumstances of meeting, eg, trade association, industry roundtable, industry best practices discussion, domestic or overseas
Ensure that the type of meeting is understood and, to the extent possible, who will be in attendance and whether they are actual or potential competitors. Ensure the circumstances and purpose of the meeting such as a trade association discussion on market standards is specific and well defined. While trade associations, for instance, may engage in legitimate discussions that may benefit the market, it is important to ensure that such initiatives do not restrict competition.
1.2 Identify relevant internal records of reasons for meeting or information sharing (eg, on prices and customers, etc)
Identify internal records (for instance, emails or telephone conversation notes) of reasons for meeting as part of this task and ensure that making contact with competitors is based on sound objectives in order to achieve legitimate lawful objectives.
1.3 Consider and record business arrangements including rationale and benefits of meeting with competitors
Identify and record business arrangements including the rationale and benefits of such meetings, including any benefits to the marketplace and consumers.
1.4 Ensure relevant due diligence is conducted in advance of a meeting
Ensure relevant due diligence is carried out. The aim is to ensure that the meeting runs smoothly, which in turn will help to avoid any inadvertent anti-competitive practices. This includes agreeing to an agenda with the other parties prior to the start of the meeting. It may also be prudent to agree that a short statement will made at the start of meetings that details the purpose of the meeting and reminds participants that discussions should be compliant with competition law.
Identification of risk
1.5 Use your competition law risk assessment to identify information exchange risks to your business
Use your competition law risk assessment to consider the degree of risk related to the information to be exchanged and identify those risks that can threaten your organisation’s business as a result of failing to comply, see How-to guide: How to identify and prioritise competition law risk in your organisation. Considerations should include the type of information to be exchanged (including the individualised/aggregated nature, age of the data, public nature of the data, frequency of the exchange) and the market characteristics in which your organisation operates (including the concentration of the market and barriers to entry). The categories of information which may be exchanged or not are not fixed and therefore all circumstances surrounding the exchange of information should be taken into account. If there are any pro-competitive benefits to an exchange, these should be documented. If in doubt, specialist advice should be sought.
1.6 Identify possible exposure to risk arising from information exchange with competitors (such as third-party actions, regulatory investigation or enforcement)
Identify possible exposure to risk of third-party action, external investigation, or regulatory enforcement of anti-competitive practices that are discovered in meetings with competitors. It is important to understand that the consequences of breaching competition law are serious and wide-ranging and must therefore be avoided.
Preparation of employees
1.7 Provide competition law guidance and training for staff who attend meetings with competitors
By reference to your competition law risk assessment, your organisation will need to provide training and guidance to relevant staff, see further How-to guides: How to design a competition law compliance programme and How to implement a culture of compliance with competition law in your organisation. This should include the types of meetings staff might attend; for example, it should cover both formal and informal meetings, formal and informal discussions and official and unofficial gatherings outside of official meetings with competitors. It is important that employees clearly understand that it is critical to stick to the agenda that has been set and to prepare a meeting report after, as the risks of straying into potential infringement activity are so high.
It should be clearly understood that if another party to a conversation engages in a prohibited topic, participants including your organisation’s employees must immediately object and renounce any intention to discuss the matter any further, requesting that the subject be changed. If the objection and request is ignored then exit the meeting and either ensure that the reason for the departure is noted in any shared minutes or, if none, the participant should note this in their minutes. This is critical, as silence can be inferred as acceptance and for the purposes of mitigating the infringement risks, and the reasons for leaving should be recorded and then reported to in-house counsel . It is the responsibility of every participant at the meeting to comply with competition law to ensure the objectives of the meeting are met and any anti-competitive conduct is avoided.
1.8 Provide employees attending meetings with a list of dos and don’ts specific to competition law
Ensure employees know that competition law rules are to be followed when meeting with competitors by strictly acting on the following dos and don’ts:
- do restrict meeting or any communications with competitors to an extreme minimum and if there is an agenda, stick to it;
- do terminate or leave meetings where the other party initiates discussions on competitively sensitive information having made it clear that you do not accept the information and do not wish to be part of any such exchange. Do make sure that this is recorded in minutes of the meeting;
- do report any concerns about discussions to in-house counsel and/or senior management for consideration as to whether further action should be taken;
- do ensure strict performance in areas of oversight and supervision, such as record keeping, etc;
- don’t in fact or appearance, discuss or exchange information not in conformity with competition law, including pricing strategy, production quantities, market procedures, company bids on contracts for particular products or company procedures for responding to bid invitations;
- don’t discuss with competitors any term of sale that is being or may be offered to a customer;
- don’t in fact or appearance discuss other commercially sensitive information with competitors including productions and sales, transportation rates or marketing procedures, etc;
- don’t discuss with a competitor sales territories or agree with competitors where you will sell or not sell;
- don’t discuss with a competitor whether or not to deal with a particular customer or distributor or the pricing or terms of dealing with customers or distributors.
1.9 Ensure staff understand – in advance of any meeting – the necessity for the careful logging, management and compliance with competition law principles when meeting with competitors
Ensure the principles and the agenda of the meeting are carefully managed, documented and enforced. Any member of the meeting who does not comply with the articulated competition law principles and objectives should be asked by other members to exit the meeting.
1.10 Ensure guidance on record keeping protocols in relation to meetings with competitors is provided to staff
This task involves ensuring employees understand that it is important for records of the meeting to be thorough and accurate, containing all the information discussed at the meeting. If contemporaneous notes cannot be taken (perhaps because discussions were informal) then it is important that notes are made on discussions as soon as possible following the discussions and in as much detail as possible.
Step 2 – Steps to be taken during the meeting
2.1 Ensure the meeting is transparent and executed and documented correctly to demonstrate its purpose (for instance, to enhance competition or market standards)
Ensure as part of this task that the meeting is executed correctly to enhance competition. Where a participant at the meeting does not conform with the pre-agreed agenda and meetings guidelines, they should be asked by other members attending the meeting to leave. If they do not, then your organisation’s employee should note their objections to the disclosure of information, state that they do not wish to accept it and leave the meeting (having requested that their doing so be recorded in the minutes).
2.2 Collate and record detailed and accurate meeting minutes
Prepare accurate minutes of the meeting. Minutes should be reviewed by your organisation’s legal counsel or equivalent and consequently circulated to all members immediately after the meeting. It is important to ensure that they include the topics discussed and any amendments should be notified to the chair without delay. All notes and minutes from meetings should be retained and stored safely.
Step 3 – Steps to be taken after the meeting
3.1 Review information exchanges with competitors for compliance
Review the information gathered from the meeting to ensure it is in line with the objectives of the meeting and that it does not raise the possibility of competition compliance issues. This should be done in a timely manner because, if there are issues and it is decided that a report should be made to the European Commission and/or other national competition authority, there are advantages to being the first to do so. See How-to Guide: How to identify and address competition law infringements.
3.2 Ensure all staff members identified by your competition law risk assessment are debriefed after meetings with competitors
Ensure staff members are debriefed on the relevant details pertaining to the meeting that was conducted.
3.3 Identify any possible exposure arising from the information exchanged with competitors (such as third-party actions, regulatory investigation or enforcement)
Identify possible exposure to risk of third-party action, external investigation, or regulatory enforcement of anti-competitive practices and consider whether any remediation action should be taken. See How-To Guide: How to identify and address competition law infringements.
3.4 Identify any competition law compliance lessons that are relevant to information sharing with competitors
Identify lessons learned and consider how they can be incorporated into preparations for future meetings or communications with competitors. Additionally, consider new methods on obtaining information that will enable meetings to be conducted in legally compliant ways.
3.5 Review and update your organisation’s compliance programme with any new lessons learned (internally or externally)
Ensure your organisation’s competition compliance programme is updated to cover all the principles and guidelines required to conduct a lawful meeting with a competitor and with any practical examples or lessons learned from meetings which will help to illustrate potential issues for staff.
Additional resources
Related Lexology PRO content
How-to guides:
Understanding the competition law prohibitions in Article 101 and 102 TFEU
How to identify and prioritise competition law risk in your organisation
How to implement a culture of compliance with competition law in your organisation
How to design a competition law compliance programme
How to assess competition law risks in an agency agreement
How to identify and address competition law infringements
Checklists:
Competition law compliance
Conducting a competition compliance audit
Managing a dawn raid
Drafting a competition law compliance policy
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