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PRESENTATION COVERAGE
EXXONMOBIL ANTITRUST COMPLIANCE POLICY DEFINITION OF "HARD-CORE" POLICY ANTITRUST LAWS IN ASIA-PACIFIC, PAKISTAN "PER SE" OR HARD-CORE VIOLATIONS INFORMATION EXCHANGES INFORMATION TRANSFER BETWEEN COMPETITORS TRADE ASSOCIATIONS CONCLUSION - ANTITRUST DO'S AND DON'TS
ANTITRUST POLICY
STRICT COMPLIANCE WITH ANTITRUST LAWS
No exception in whatever circumstances can be permitted for deviations from antitrust policy or antitrust law compliance
NO AUTHORITY TO DEVIATE
No manager or employee, no matter how senior, has the right to order or allow deviations from compliance with antitrust policy or antitrust law
APPLIES TO PROPOSED TRANSACTIONS WHICH ARE OUTSIDE U.S. DON'T VIOLATE ANY APPLICABLE LAWS
REQUIRES MANAGEMENT TO CONSIDER RISK OF PROVOKING LEGISLATION & REGULATION OTHER ADVERSE GOVERNMENT REACTION
The hard core policy is also useful as it lessens the risk of provoking actions by government or other authorities in countries where there are no antitrust laws. In any event, management has the responsibility of assessing whether actions or business practices could have an impact resulting in governments intervening by enacting antitrust laws etc to protect free competition.
SIGNIFICANT ANTITRUST LEGISLATION ENACTED : AUSTRALIA INDIA JAPAN NEW ZEALAND SINGAPORE PAKISTAN S. KOREA TAIWAN THAILAND VIETNAM PHILIPPINES
SIGNIFICANT ANTITRUST LEGISLATION PENDING : MALAYSIA PRC NO SIGNIFICANT ANTITRUST LEGISLATION : HONG KONG INDONESIA SAUDI ARABIA LESS DEVELOPED ANTITRUST LAW ENACTED :
This information should not be relied on as current. Please consult the Law Department.
The point to note here is that many countries in Asia / Asia Pacific have antitrust laws. These laws, while they may not be similar, might nevertheless be extra- territorial in nature in the sense that they may prohibit acts outside the relevant jurisdiction if such acts (even if done outside the jurisdiction) have an impact on commerce in the home jurisdiction. For this reason, even if the affiliate operates in a country without antitrust laws, it is important to observe the hard core policy to avoid infringing the antitrust laws of another country, especially if that affiliate trades with or exports into that other country.
MONOPOLIES AND RESTRICTIVE TRADE PRACTICES (CONTROL & PREVENTION) ORDINANCE, 1970 ("MRTP")
SECTION 3 MRTP : "THERE SHALL BE NO UNDUE CONCENTRATION OF ECONOMIC POWER, UNREASONABLE MONOPOLY POWER OR UNREASONABLE RESTRICTIVE TRADE PRACTICES".
SECTION 6 : THE FOLLOWING ARE DEEMNED TO BE UNREASONABLE RESTRICTIVE TRADE PRACTICES PRICE FIXING, OR IMPOSING RESTRICTIVE TRADING DIVIDING UP MARKETS. LIMITING QUANTITY OR MEANS OF PRODUCTION, DISTRIBUTION OR SALE OF GOODS OR SERVICES. CONDITIONS
..(cont'd)
LIMITING TECHNICAL DEVELOPMENT OR INVESTMENT. BOYCOTTS TO EXCLUDE PERSONS FROM PRODUCTION, DISTRIBUTION OR SALE OF GOODS OR SERVICES. RESALE PRICE, MAINTENANCE
THIS PRESUMPTION CAN BE REBUTTED IF THE TRADE PRACTICE IF CONTRIBUTES TO EFFICIENCY OF PRODUCTION OR DISTRIBUTION OR TO TECHNICAL PROGRESS OR EXPECT OF GOODS AND THE SAME COULD NOT BE ACHIEVED WITH LESS RESTRICTIVE ARRANGEMENTS AND THE BENEFITS OUTWEIGH THE ADVERSE EFFECT ON COMPETITION. However EM "hard core policy" may set a higher standard.
ANTITRUST
WHAT EMPLOYEES MAY NOT DO UNDER HARD-CORE POLICY
ENTER INTO ANY AGREEMENT OR UNDERSTANDING WITH ANY COMPETITOR REGARDING THE PRICE OR OTHER TERMS FOR WHICH THE COMPANY WILL SELL PRODUCTS TO ITS CUSTOMERS.
Remember that it is not just agreements with competitors that are caught. Any informal arrangement or oral arrangement with competitors to set prices or other terms will also constitute violation of the hard core policy. In fact, the antitrust regulators can infer an agreement or arrangement from conduct of competitors.
DISCUSS WITH ANY COMPETITOR THE COMPANY'S FUTURE INTENTIONS REGARDING PRICES OR OTHER TERMS OF SALE FOR ITS PRODUCTS.
Violations of hardcore policy can arise if competitors discuss their future plans, if they pertain to pricing, marketing strategy, output or production plans, or other matters which will impact on the price level or the market for the products. There should therefore be no discussion with or revelation to a compeititor of the company's plans or strategies for the future.
AGREE WITH ANY COMPETITOR TO ESTABLISH QUOTAS OR OTHERWISE LIMIT THE SUPPLY OF ANY PRODUCT SOLD BY THE COMPANY, OR LIMIT RESEARCH.
This would be another form of anticompetitive conduct since it would be an attempt by a group of competitors to artificially set the price of products by controlling production levels.
AGREE WITH ANY COMPETITOR TO DIVIDE INDIVIDUAL CUSTOMERS, A CLASS OF CUSTOMERS OR A GEOGRAPHIC MARKET.
An agreement or arrangement of this nature would allow each competitor to monopolise their respective markets which is clearly against the principle of allowing free competition. This would also amount to a per se violation of US antitrust laws and hence prohibited under the hard core policy.
AGREEMENT NEED NOT BE FORMAL AND CAN BE INFERRED BASED ON EXCHANGES AND COMMON CONDUCT.
It would inevitably be difficult for prosecutors to show proof of an actual agreement on anticompetitive conduct by competitors. However, the courts or antitrust regulators can infer such agreement by the acts and conduct of competitors.
INFORMATION EXCHANGES
ACQUIRING COMPETITIVE INTELLIGENCE
OBSERVATION PUBLICLY AVAILABLE INFORMATION
Publicly available information includes information which any member of the public can obtain, such as information filed with the Registry of Companies or information filed with other authorities which the public can access. It also includes information in competitors' website which is available to the public. So long as the information is of such nature, even obtaining it directly from competitors pursuant to an exchange of publicly available information would be permissible.
CUSTOMERS, SUPPLIERS
It is generally not objectionable to obtain information on competitors from customers or suppliers. However, one must exercise care in ascertaining whether the customer would be in breach of some duty of confidentialty to that competitor, for example, in circumstances where you are aware (from market practice etc) that such customer or supplier is likely to have a confidentiality agreement or similar clause in an agreement, with that competitor. This is not an antitrust issue but it can expose the company to inducing breach of an agreement by the customer or supplier.
OTHER AFFILIATES
Obtaining intelligence on competitors from other EM affiliates is permissible, although that affiliate should not disclose it if that affiliate is bound by a confidentiality undertaking to that competitor.
TRADE ASSOCIATIONS
Trade association meetings are generally for the purpose of exchanging information relating to safety, environmental issues, industry actions against illegal parties affecting the industry (eg decanters). The fact that information is exchanged during a trade association meeting does not render it permissible if the information is of such nature that it should not be obtained or exchanged in other circumstances eg information on pricing, marketing strategy or production / output numbers. Such information should not be exchanged under any circumstances.
There is no reason why information cannot be obtained directly from competitors if such information is in the public domain, or related to legitimate business purposes such as enhancement of safety or security, preparation of presentations to government bodies, or compliance with government regulations. However, information relating to prices, costs, terms of sale, business plans, suppliers, customers, territories, capacity, production or other subject which could be commercially important are particularly sensitive and should not be exchanged without consultation with the Law Dept.
WELL DEFINED LEGITIMATE BUSINESS PURPOSE IMPROVEMENT OF PRODUCTIVITY EFFICIENCY SECURITY SAFETY FACILITATE SUBMISSIONS TO GOVERNMENT GOVERNMENT COMPULSION
The above clearly excludes information relating to prices, costs, terms of sale, business plans, suppliers, customers, territories, capacity, production or other subject which could be commercially important. Those would be particularly sensitive and should not be exchanged without consultation with the Law Dept.
Apart from the above, information which could have an effect on free competition in the market should not be exchanged or discussed.
WRITTEN QUESTIONNAIRES/FACE-TO-FACE/TELEPHONE
If it is inevitable to do a legitimate exchange of information with competitors, it is preferable for the exchage to be in written form (eg exchange of correspondence) so as to set on record the matters that have been communicated. Face-to-face meetings, while not prohibited, entail the risk of allegations that competitors have met for reasons other than legitimate information exchange. Extra care must therefore be taken in meetings with competitors.
EXCHANGE OF INFORMATION ON THIRD PARTIES CREDIT INFORMATION PERFORMANCE OF CONTRACTORS FACTS NOT OPINIONS - ON FINANCIAL CONDITION, NO FUTURE PLANS POSSIBLE CHARGE OF CONCERTED REFUSAL TO DEAL
COMPETENCE/INTEGRITY
Somethimes, competitors ask for information on a third party such as a mutual customer or supplier / contractor. This may be feedback on the credit worthiness of a customer, or the performance or safety record of a supplier / contractor. While it is permissible to exchange information with competitors relating to these, care must be take to ensure that such exchange would not be tantamount to, or result in, a blacklist or boycott of a customer or supplier / contractor. Giving purely factual information is permissible, but avoid stating opinions. Also, do not discuss future plans relating to that customer or supplier/contractor with the competitor eg "we intend to terminate the services of this supplier because of poor service ..."
The Law Dept should review the Charter and by laws of the Trade Association before participation by the company's representatives.
Prior to attending any assocation meetings, obtain the agenda in advance. The Law Dept should review that agenda to determine if there are any inappropriate topics. If there are, these should be taken out of the agenda. Items like "any other business" are open-ended and should not be in the agenda.
If an inappropriate topic is raised by anyone during the meeting (eg pricing, production levels, and those matters which should not be discussed with competitors), you should object to the matter being raised and insist that discussion on such topic cease immediately. Insist that your objection be noted down in the minutes of meeting. If discussion on that matter continues, you should leave the meeting immediately and ask that your departure be noted in the minutes. Report to your supervisor and the Law Department immediately thereafter.
MINUTES OF MEETINGS
The draft minutes of all trade association meetings must be obtained and sent to the Law Dept for reivew, prior to your sign-off of those minutes.
Care should be taken in any informal sessions after meetings. Even though the formal meeting has ended, you should continue to exercise care as competitors are still present at the session. The same principles on information exchanges with competitors continue to apply ie avoid discussing antitrust sensitive matters, and leaving the session if anyone persists in discussing such matters. The danger with informal sessions is in some way even greater because the sessions are not minuted and it is open to third parties to allege that anticompetitive arrangements were arrived at during such informal sessions.
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1. 2. COMPETE ON THE BASIS OF INDIVIDUAL COMPANY ACTION. CONSULT WITH YOUR LAWYERS IF EVER YOU HAVE ANY DOUBT THAT YOUR ACTIVITIES ARE CONSISTENT WITH FULL ANTITRUST COMPLIANCE