February 3, 2009
Know the Rules or Pay the Price – Firms and Competition Law Enforcement
Posted by D. Daniel Sokol
2 March 2009
The Assembly House, Norwich
A number of cases over the last few years have illustrated the potential costs to businesses and individuals of ignoring competition law.
· In the case of mergers, some cases which might have been resolved at an early stage have ended up being referred to the Competition Commission at large extra costs to both the firms involved and to society.
· Talking to your rivals can land not just the company you work for, but also yourself, in trouble. Conversations about fuel surcharges have left BA with a large public fine, both Virgin and BA with large private damages liability and in addition led to the criminal prosecution of four former BA executives. Criminalisation in the UK of some competition law infringements is new, but we have already had the first such conviction with three executives from Lincolnshire sent to prison for between 30 and 36 months.
Firms can be victims as well as perpetrators of competition abuses. Sometimes knowing what the rules are can protect a firm from harmful actions by others. If a powerful buyer or supplier places a huge financial burden on a firm, it may be able to turn to the competition authorities for relief.
· Competition law puts restraints on what a dominant firm can do vis-à-vis customers. A firm may even take direct action itself, pursuing a private action either for damages or to stop a dominant firm using abusive practices.
· The first competition case to reach the House of Lords as well as the European Court of Justice, Crehan vs Courage, arose because a publican felt he was the subject of abusive behaviour by another firm.
To protect themselves from inadvertently violating competition law as well as from the abuses of others, firms need to be aware of what the law says and aims to achieve. Firms also need to consider whether their staff training is adequate: Should it introduce a compliance programme? If one is already in place, is it adequate to meet current and future challenges?
This event is aimed at providing such information. We start the event with a to elicit the views of the audience on a range of actions and whether they are allowed under existing competition law. We will return to the results from these, after highlighting the dangers which inadequate knowledge of competition law can bring and a short introduction to current legislation. The audience’s own initial responses (and those from other surveys) will form the basis for a general discussion at the end of the event. The event is especially aimed at businesses and law practitioners.
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