Snapshot: implementing a competition compliance programme in Australia

Implementing a competition compliance programme

How does a company demonstrate its commitment to competition compliance?

An effective and comprehensive compliance programme can demonstrate a company’s commitment to competition compliance.

Key elements of an effective compliance programme include:

• a detailed and tailored compliance manual;
• a board policy whereby the company commits to develop and maintain a culture of compliance;
• regular compliance training for employees, including senior managers at least once a year;
• appropriate mechanisms to allow for reporting to senior management;
• an appropriate complaints handling system;
• appointment of a suitably qualified compliance officer to oversee the compliance programme;
• the provision of whistle-blower protections;
• regular reviews and updates to the compliance programme;
• appropriate approval processes, including legal approval processes before entering into arrangements that may give rise to competition law issues; and
• sanctions for individuals who do not comply with the compliance programme.

What are the key features of a compliance programme regarding risk identification?

Compliance programmes will vary between companies as they need to be tailored to account for the company’s size, industry sector and market power.

A key feature of risk identification involves promoting a culture of compliance within the organisation and educating all employees (at both senior and employee level) on competition risks that the company faces, along with a regularly updated compliance manual and other training materials.

Risk identification involves consideration and identification of:

• the competitors of a company and how the company interacts with those competitors (for example, if they collaborate or cooperate in respect of business ventures or share information);
• supply and distribution arrangements that the company has in place (for example, whether they are exclusive);
• the industry or market sector in which the company operates and the level of competition that exists in the market; and
• the market share of the company.

What are the key features of a compliance programme regarding risk assessment?

Risk assessment involves a critical assessment of the identified risks.

Ideally, any risk assessment should be undertaken by senior management, with appropriate input from the company’s appointed compliance manager as well as external legal advisers.

A formal process and protocol to assess risk should be developed and adhered to, with specific regard to the requirements of the Act. It may also be appropriate to develop a classification system in respect of risks that different functions of the company may face to ensure they are escalated accordingly.

What are the key features of a compliance programme regarding risk mitigation?

An important aspect of risk mitigation will be ensuring that risks can be properly identified in the first place.

As part of any risk mitigation strategy, a compliance programme should include:

• appropriate training for employees (in particular, senior managers), to identify and avoid potential competition risks;
• identifying particular areas of risk for the company, for example, procurement and sales functions of the business and having appropriate protocols in place to avoid competition risks;
• having an appropriate risk assessment and approval process, with input from external legal advisers; and
• implementing a system for logging complaints and decisions.

What are the key features of a compliance programme regarding review?

Compliance programmes should be regularly reviewed to ensure they are updated to take into account changes to the Act, regulatory guidance provided by the ACCC and any changes to the business.

Any review should:

• be broad in scope in confirming that the company is complying with the requirements of the Act;
• be undertaken by a suitably qualified and independent compliance professional (who is provided with all the relevant sources of information relevant to conducting the review); and
• result in a compliance report evaluating the company’s compliance and providing areas for improvement.