Competition law compliance means that companies must define their commercial strategies independently and not engage in anti-competitive behaviors like price fixing or market allocation with competitors. Companies also cannot abuse a dominant market position through behaviors such as charging excessive prices, treating similar customers unequally, or tying purchases. Violations can result in large fines, private damages claims, and reputational harm for companies. Maintaining an effective compliance program with training and monitoring is important to mitigate competition law risks.

1. Competition law
Compliance
OVERVIEW & RISKS, CARTELS & ABUSE

2. What does anti-trust compliance mean?
“In a free market, business is a competitive game. Sometimes, companies may be
tempted to avoid competing with each other and try to set their own rules for the
game. At times, a major player in the game may try to squeeze its competitors out of
the market ”
Directorate-General for Competition of the European Commission
•Behaviors with competitors
• Each company has to define its own commercial strategy independently from its competitors
• Obtain information via public sources
• Lawful participation in trade associations
•Be a dominant actor
• Being a large player or the leader in a market makes us a dominant actor
• We have the right to be dominant
• We can not abuse our dominant position
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3. Risks
• Sanctions
• Up to 10% of the worldwide of the company turnover (parent
company may be held jointly liable)
• Criminal sanctions to individuals (prison and fines)
• Private damages
• Cost and time consuming litigation
• Company Image and reputation adversely impacted
• Top 10 EU fines since 1969 (as at 19 July 2016):
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P. 3http://ec.europa.eu/competition/cartels/statistics/statistics.pdf

4. Leniency Program & ECN
• Vast majority of fines are issued where companies apply for leniency
• A company providing evidence of a cartel may obtain total immunity
• Amnesty plus: Competition Act provides an incentive for applicant to come
forward with information about other cartels they may be involved in
• Competition Authorities are organized in a network (ECN): e.g. EU washing
powder cartel where Henkel applied for leniency
• Competition Authorities are organized in a network (ECN): e.g. Air cargo:
• Lufthansa apply for leniency and all other companies were sentenced/fined
• USA: fines >1.7 b $ and six executives have agreed to serve a total of 56
months of jail time
• EU: fines = 799 Million €.
• Australia : fines > $50 million AUD
• Canada : fines > $17 million CAD
• Korea : fines = ₩19 billion
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5. Compliance program - example
• Traceable, top/down and permanent process in each organization to be sure
that employees behavior in the market are fully compliant with laws
• Training with managers and directors
• First competition training
• Competition Program organization
• Physical training – face-to-face:
• meetings with employees by group sessions who may be in contact
with suppliers; customers; or competitors
• Behavior workshop on the day/day business
• Rules to participation in trade associations to be strictly controlled
• Communication with authorities to be coordinated via HQ
• To be reviewed on a regular basis:
• Annual compliance register audited and updated to ensure
completeness to include new employees
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6. Cartels
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7. What is a cartel?
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• An agreement –
• the form of the agreement is irrelevant
• verbally, electronic, written, tacit …
• Between market players whether competitors, suppliers or customers…
• A cartel may be between actors at the same level of the supply chain
(horizontal) or between different level of the supply chain (vertical)
• – see next slides for examples
• That actually or potentially have the aim and/or effect of distorting the
free market

8. Horizontal Cartels
Are prohibited:
• Join fixing of purchase or
sales prices
• Sharing market or sources
of supply
• Limiting access to the
market of potential players,
or any other companies
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Supplier
1
Supplier
2
Supplier
3
Dist. 1 Dist.2 Dist.3
I I I I I
Market/ end customers
I
I = Individuals within a legal entity, e.g. salesmen, marketing personnel, senior managers

9. Examples
• Competitors jointly fixing prices (including of a single component of the
prices) or rebates
• Allocating customers, market, quantities of products
• Bids coordination
• Boycott
• Behaviour that aim to exclude a competitor from the market
• A sole exchange of information provided that the aim is to restrict the free
market may be considered as anti-competitive
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10. 10
Vertical Cartels
Are prohibited:
• Fixing of minimum resale
price
• Allocate territories; restrict
marketing and promotion
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11. Examples
• Supplier prohibition on sales products in a certain area
• Agreement where the distributor is not allowed to sell product outside of a territory
• Exclusive procurement practices
• Mandatory resell prices
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12. Information sharing: which ones & how?
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 Trade association meetings
 Commercial partnership (JV; …)
 Benchmarking studies
 Prices
 Volumes
 Logistics
 Customers names
 Customers
creditworthy
 Commercial strategy
Information is publicly known and/or
Strict rules encompass those exchange
It is not authorized to share information in particular in these contexts:
Except when:
&
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13. Trade associations
• Membership of a trade association is permitted provided that:
• A compliance certificate is signed.
• An agenda is established prior to the meeting and minutes are produced at the
end.
• Scope of the meeting is clear and lawful: share best environmental practices,
joint effort on authority requests, joint trainings … etc.,
• Trade association should adopt their own “code of conduct” and it is advisable
to start all meetings with a reminder “All discussions are held in strict compliance
with anti-trust rules, no deviations are permitted”
• In cases of deviation, employees are instructed to leave the room & make sure that
the minutes of the meeting stipulate the employees absence.
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14. Key Message
•Each company has to establish its own
commercial strategy
•and to act independently from its
competitors
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15. Abuse of dominant
position
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16. • A high market (more than 40%) share is only an indication that the market
player is a dominant actor.
• Market construction, and price leadership determine which player leads
the market
• Some actors may lead the market with 15% market share in a market
where other players own only 5%
• Dominant position may be collective (together with competitors)
16
Who is in a dominant position?
Being in a dominant position is not
reprehensible as such
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17. • Certain lawful behavior for a company which is not in a dominant position
may be subject to sanction when it holds a high degree of power in a market:
 Treat similar customers unequally
 Refusal to deal without objective justification
 Tying purchase of a product to another product
 Exclusive provisions
 Fidelity rebates
 Prices abusively low (below its cost price)
 Price excessively high
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Abuse of its strong position in a market is prohibited
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18. Key Message:
Competition law prohibits
any abusive behaviour
by one or more companies
in a dominant position
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