Sunpower Group Holdings Ltd is committed to free, fair and open competition and our policy is to comply fully with all aspects of UK competition law as well as, where applicable, EU and Irish competition law.
Breach of these laws can have severe consequences for the company, its employee’s. These include significant fines, damaging publicity and disqualification of company directors and even, in the case of involvement in cartel activity, criminal penalties, including imprisonment.
All Company directors and employees are required to comply with this policy, and with competition law, when conducting their duties in connection with SGH. Failure to do so may result in disciplinary action including dismissal. The guidelines that accompany this policy statement provide practical guidance on competition compliance.
Competition Law Compliance Guidelines: overview of UK Competition Law
The Competition Act 1998 (“the Competition Act”) prohibits commercial agreements that restrict competition and affect trade in the UK (or a part of it), to an “appreciable” extent. Agreements can be “saved” from this prohibition if they benefit from a “block” exemption (an exemption which covers a certain category of agreements), or meet certain criteria against which individual agreements can be assessed.
Agreements or understandings that amount to serious breaches of the law (such as price-fixing) can always be viewed as “appreciable” and are unlikely to be capable of being “saved”. Furthermore, the Enterprise Act 2002 makes it a criminal offence to engage in certain forms of anti-competitive cartel, where this is done “dishonestly”.
The Competition Act also prohibits abuse of a dominant position in the market. As this is not a real concern for Sunpower Group Holdings Ltd, these guidelines focus on the ban on restrictive agreements.
To be caught by the Competition Act, an “agreement” does not have to be in writing and can even be implied from conduct. This means that sharing commercial information directly with competitors can create an anticompetitive agreement and is generally unacceptable. It also means that it is possible to breach the law simply through a casual conversation, and subsequent conduct – not just written agreements are caught.
Practical Do’s and Don’ts
Contact with competitors is inherently risky from a competition law point of view. Set out below are some do’s and don’ts relating to key areas of concern for SGH.
DON’T:
- Enter into any agreement or understanding with a competitor about the prices you will charge, the discounts/rebates you offer, or the timing of any price increase announcements.
- Discuss retailers’ pricing with your competitor, except in very general “state of the industry” terms. Above all, do not discuss any strategy or proposed action designed to slow or stop a decline in retail prices.
- Agree with competitors not to compete for certain customer accounts or contracts.
- Agree with competitors not to enter, or to withdraw from, certain industry sectors or geographic markets; or to stick to your “home” market.
- Agree to “take turns” with competitors in relation to customers or contracts.
- Discuss any commercially sensitive information (e.g. relating to pricing, timing for price increases, strategy) with a competitor, even where such information could easily be obtained from a customer or is, or will shortly become, public knowledge.
- Form any agreement or understanding with a competitor about the terms you will offer to customers, the customers you will or will not sell to, or the types of products you will/will not supply.
DO:
- Be wary of contact with SGH competitors, in informal situations e.g. at in the bar after a forum meeting: competition law still applies!
- Remember that, while some SGH customers each others’ competitors and this may affect the round-table discussions it is possible to have, bearing competition law issues in mind.
- You can discuss the economic climate or state of the industry, in general terms, and provided you do not share sensitive commercial information on your own strategy to meet challenges facing the industry.
- Participate in legitimate SGH business such as discussing proposed new industry standards or lobbying activity, provided you do not share sensitive commercial information beyond what the company directors have confirmed as necessary and compliant from a competition law perspective.
- Remember that acting under the SGH umbrella does not “legitimise” behaviour or discussions that raise serious competition concerns, such as discussions with competitors about your pricing.
- Ask customers what prices they are paying to your competitors, where you are trying to win their business, or accept information, such as competitor price lists, where this is volunteered by customers or obtained as a “mystery shopper”, for the purposes of helping you compete. This is competition working well, and is okay.
- You can, within limits, answer questions about the creditworthiness or payment history of a customer. Answers should be restricted to basic statements of fact e.g. “Customer A generally pays on time”, “We consider Customer B to be a poor credit risk”. Do not, however, give any indication of the terms you offer the customer, or of your likely future strategy regarding the customer, e.g. “If I were you, I would not supply Customer X”, “We only offer them credit of £N”. Be wary of reaching an agreement with a competitor about whether it is sensible to supply or not supply any customer – that is for them to decide.
Competition law is complex and no list of do’s and don’ts can be exhaustive. The above is for guidance only and does not represent the Competition Act in its entirety.