DEPARTMENT FOR BIS ISSUE GUIDANCE FOR COMPETITION LAW

How can directors help companies avoid breaking competition law?  The Department for Business Innovation & Skills have today published a guide for company directors to help companies avoid breaking competition law.

The guidance sets out the questions that non-executive directors should ask company executives to measure and mitigate the business’s level of competition risk. It also sets out the broad rules that staff should know and comply with to stay within the law.

Non-executive directors have an important role in challenging company executives about their compliance with competition law.   

These are some of the questions you need to ask:

What are our present competition law compliance risks?

What are the high, medium and low risks?

What measures are we taking to mitigate these risks?

When are we next reviewing the effectiveness of our risk mitigation activities?

As a company director, you should ensure that the company has taken measures to make sure relevant staff know, and are regularly reminded, that:

• the company must comply with competition law

• they must not discuss competitively sensitive information with the company’s competitors, especially the prices at which the company or its competitors will sell, or how it will bid for tenders

• where or to whom the company sells and that there may be consequences for staff who do.

If they have done any of these things, or suspect someone else in the company has, they can and must report it to an independent and trustworthy person in the company (such as the company secretary or in-house lawyer). There will be consequences if they don’t.

What is a cartel and how does being involved affect you?

In simple terms, a cartel is an agreement between businesses not to compete with each another. The agreement is usually secret and often informal. Cartels are a particularly serious breach of competition law.

Individuals involved in cartels may be imprisoned for up to five years. Businesses that breach competition law can be fined up to ten per cent of turnover. Directors of companies that breach competition law can be disqualified for up to 15 years

Download the GUIDANCE HERE

Source: Department for Business Innovation & Skills