Implementing a competition compliance programme
Commitment to competition compliance
How does a company demonstrate its commitment to competition compliance?
Companies demonstrate their competition compliance mainly by assuring the compliance of competition rules by their directors, officers and employees. Compliance may be implemented by:
- competition compliance manuals;
- training programmes and workshops;
- obligatory annual training (refresher courses);
- training for new employees; and
- undertakings included in employment and director agreements with liquidated damages and termination of those agreements in case of breach.
In addition, companies may have whistleblowing systems through which employees may notify the management of companies of any abuse of competition law, hire in-house competition counsel and use a national or international network of external competition counsels. These experts may participate in meetings of the board of directors of a joint venture of competing companies to ensure that competition rules regarding the exchange of information are complied with.
What are the key features of a compliance programme regarding risk identification?
All personnel – especially those involved in sales or drawing up vertical agreements or agreements with horizontal elements – should identify potential risks and consult an in-house or external competition counsel before executing any measures. In addition, competition compliance manuals must identify what kind of discussions, meetings, correspondence and transactions with competitors or potential competitors bear risks.
Key to competition compliance is compliant wording in correspondence with stakeholders. It is of utmost importance to identify risks relating to significant cartels (ie, price fixing, market sharing, bid rigging and production or sales quotas) as well as activities in trade associations and procedures if competition-sensitive topics are handled in those meetings. Typically, risk identification also covers free time.
What are the key features of a compliance programme regarding risk-assessment?
The key features of a compliance programme regarding risk assessment include scoping and high-level assessment and detailed risk assessment.
The key purpose of scoping and high-level assessment is to provide a basis for deciding how to define the organisational focus to identify topics for further risk prevention and management measures. In line with this aim, an assessment should be made on a gross basis before considering the effects of any countermeasures that have been taken. Assessment results show actual status and changes to previous assessments. Observations relating to an assessment and recommendations relating thereto are submitted to the chief financial officer or executive board for consideration and decision. Unless otherwise decided, competition compliance topics classified as high priority will be subject to high-level assessment and detailed risk assessment.
What are the key features of a compliance programme regarding risk-mitigation?
A key feature of a compliance programme regarding risk assessment is identifying competition risks as early as possible and encouraging employees and officers to use whistleblowing systems and ask for further advice if they identify potential competition risks. Company management should discuss potential competition risks immediately after identification with an outside or in-house competition counsel and give procedural (in-house) guidance for employees and officers using compliance checklists (eg, dos and don’ts charts) from which they may quickly check the most important identified risks and procedures. The revision history and validation information should be added to this compliance checklist to ensure its proper use.
Compliance programme review
What are the key features of a compliance programme regarding review?
The key features of a compliance programme regarding review are:
- guidelines on dos and don’ts;
- guidelines on retail pricing;
- guidelines on how to behave as a market dominant player;
- guidelines on contact and information exchange with competitors; and
- guidelines on action in trade associations and dawn raids.
Compliance programmes are company specific and their coverage depends on a company’s industry, status and market position, as well as its competitors’ market positions. While most companies have a competition compliance manual, introducing and implementing guidelines can be challenging, especially for smaller companies with a presence only in Finland. Finnish subsidiaries of international groups generally obey the group’s competition compliance programmes.