Be Careful What You Discuss With Competitors

Author:Ms Dorit McCann
Profession:Beauchamps
 
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Be careful what you discuss with competitors

EU and Irish competition law requires competitors to act strictly independently of each other in the market and prohibits businesses from entering into anti-competitive agreements or engaging in concerted practices. This is not limited to formal agreements, and includes any sort of informal arrangement or discussion between businesses, whether written or verbal, that has an anti-competitive object or effect.

Trade associations, companies and individuals (such as directors) may all be liable for breaches of the competition rules. Sharing competitively sensitive information (whether directly or indirectly through a third party) can breach competition law, as it may facilitate collusion between companies, allowing those companies to engage in cartel activities such as price fixing, market sharing, limiting output and bid rigging.

It can also increase market transparency to such a degree that companies are aware of their competitors' future intended behaviour, reducing the incentive to compete and potentially causing damage to consumers.

In the recent case of Balmoral Tanks v Competition and Markets Authority [2017] CAT 23, the Competition Appeal Tribunal in the UK held that a single meeting between competitors can amount to an infringement of competition law, even if the intention of the meeting was not to exchange sensitive information. It was also not an excuse that suppliers could receive similar information on competitor pricing from customers, as the meeting provided an opportunity to have that information confirmed directly by competitors.

What are the potential penalties for breaching Irish competition rules?

The risks are considerable. An individual involved in a cartel in Ireland faces a prison sentence of up to ten years and potential fines of up to €5 million, while a company faces fines of up to 10% of annual global turnover. Directors face automatic disqualification if convicted on indictment, which precludes them from acting as director of a company in Ireland for up to five years.

Both the European...

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