In the previous episode of this series, Mayer Brown JSM discussed wage-fixing issues. Colin (a senior HR professional) is now worried about sharing sensitive HR information with other peers.
Colin: You explained in our first conversation that sharing of information on wages and bonuses could pose a problem? I am worried. Could you tell me more please?
Mayer Brown JSM: The answer to your question would depend on (i) how the information is shared; and (ii) whether the exchange of information on wages or bonuses would result in coordinated strategies and affect the competitive process between the businesses.
Wages, commissions, and bonuses are strategically useful information for competitors. Sharing such highly confidential information amongst key market players may raise barriers for new players to compete and can be regarded as anti-competitive.
Based on overseas experience, if the information on wages and bonuses is shared through an independently-run survey that meets the following criteria, the exchange of information will less likely be challenged if:-
- the survey is run by an independent agent subject to strict confidentiality undertakings;
- the agent does not act as a conduit for indirect exchange of information among the survey participants;
- the agent is strictly prohibited from relaying any raw information to the survey participants;
- ideally, the agent should gather information from sources other than your direct competitors;
- the information provided to the survey participants is based on non-current data; and;
- the survey agent collects information on a highly representative number of competitors so that no single competitor's data represents more than 25% on a weighted basis of the survey, and the information in the survey is sufficiently aggregated and anonymised so that the remuneration paid by any particular competitor cannot be identified.
These are just some of the things you should look out for. There is no one solution as the sensitivity of wage information varies significantly by industry and position. If in doubt, engage your legal team so that they can help review the terms of engagement of that survey agent!
If confidential wages and benefits information is exchanged directly between the competitors, such exchange would likely violate the competition law.
Colin: And this applies to all forms of information exchange?
Mayer Brown JSM: No. Exchanging information may sometimes enhance competition, for example, on new technologies or market opportunities.
Whether the exchange of information would violate the competition law could depend on (i) the market characteristics, (ii) the type of information, and (iii) the way it is exchanged. Normally, if the information is not something you would like to see on the news headlines the next day, you should think twice before disclosing it to a competitor.
Colin: Okay, that is good to know.