Let’s talk about the sales team. Those who negotiate with customers, bring in the deals, set the pricing policy, and come up with the sales and promotions.
Salespeople are your company’s main interface with the outside world. Smart and creative – they push your company forward. Of all your employees, they may have the greatest potential to protect – or violate – antitrust laws. And that is precisely why this blog is about them.
Most salespeople have strong people’s skills, so they’re on good, friendly terms with everyone. So when they encounter an unfamiliar situation, they’ll naturally call their counterpart in a competing company to find out how they dealt with a similar situation. (Alarm bells – this could involve an illegal exchange of information between competitors. This is why it’s so important to brief them on your business’s antitrust laws before they get on the phone – those penalties for antitrust law violations are not pretty).
Your salespeople are the ones who’ll crack this hard-nut of a customer and close a difficult deal by promising that if anyone else gets better conditions – this customer will get them too. (More alarm bells – such “most favored customer” or “MFC” clauses are sometimes illegal and merit antitrust scrutiny). And when that new competitor enters the market, where your company was once the undisputed leader, your salespeople will be the ones to come up with this excellent rebate scheme which the competitor could never match. (More bells – we just learned that the Israeli Antitrust Authority is unhappy about nearly any kind or target rebates given by monopolies. These rebates may raise issues in other jurisdictions as well).
So – lots of potential trouble; trouble that could probably be avoided if your sales crew knew a bit more about the laws of antitrust and competition in Israel.
But you already knew all that, didn’t you? And you’re still not convinced that your sales crew should be so “antitrust-informed”. Sometimes in the course of antitrust compliance programs, when we sit down with the sales team, their management gets a bit edgy. Because, they say, if our sales people knew their antitrust too well, they would be afraid to fight, afraid to compete, which is what they’re hired to do.
The “Chilling Effect”
The Chilling Effect describes a phenomenon in which legitimate, pro-competitive activity is avoided because the laws are too threatening. And yes – competition authorities should worry about the chilling effect, because it has a negative influence on the economy. They should use their enforcement powers carefully, in order to avoid the chilling effect. We antitrust lawyers keep telling them that (though they don’t always listen).
However, you and your company should not ignore the law because of its chilling effect. Antitrust and Competition regulation may be too harsh. But this does not mean it won’t apply to your company. It only means it can strike you hard and fast.
And this is where Haiku comes in. For those that aren’t familiar, Haiku is a form of Japanese poetry. It is very short – only three lines – and subject to very strict rules as to the number of syllables and the content. This website has some charming examples (in English). And yet – despite the strict rules, the possibilities are endless, and poets over the centuries have managed to convey countless moods, ideas and messages through Haiku poems. The same is true for Shakespeare’s sonnets and the great medieval Spanish-Jewish poetry: strict rules – endless creativity. Well – your sales crew is no different.
Smart, creative people can function well within frameworks and boundaries, even rules that seem arbitrary and senseless. [are you saying the antitrust rules are arbitrary and senseless?]. And we already mentioned that your sales people are smart and creative – hey, that’s what makes them good at what they do.
To give you an example – in theory, the best way to avoid competition would be a cartel – market sharing instead of fighting, price fixing instead of competing. And while you your salespeople know by now that this is illegal (hopefully), they still manage to come up with great ideas on how to compete and sell your products; ideas that do not involve illegal activity.
So – if you let your sales crew know that some types of rebate schemes require legal advice, then you can expect them to come up with better ones. If your sales rep knows that an MFC clause may be a problem – he’ll talk to the customer and come up with a different solution. When your sales manager encounters a new and unfamiliar problem, she won’t call her counterparts to check what they would do. Or, at least, your sales team can get some legal advice before implementing a wonderful idea that would give your in-house counsel a fit … not three weeks after.
So trust your sales crew. Make sure they are antitrust-informed. Or to put it better – antitrust-empowered. Here’s a little Haiku poem to help you remember this:
Stressful meetings day
A virtuoso salesman
Seeks legal advice.