Such practices in which a third party acts (often unknowingly) as an intermediary between competitors in a competition law violation are known as so-called hub-and-spoke cartels. The ‘hub’ (which is the customer in the case here) facilitates the competition-restricting behaviour without the need for there to be any direct contact between the ‘spokes’ (which are the competing manufacturers in the case here).
Competition law prohibits the direct or indirect sharing of commercially sensitive information with competitors. But what type of information are we talking about here? It concerns recent prices or price components (e.g., discounts, production costs, price increases,…), sales figures (e.g., quantities, market share,…), for example, and also other strategic information about investments, clients, new projects, etc.
The sharing of such information increases the level of transparency on the market and reduces the decision-making autonomy. This will thus entice players to be much less inclined to become the best on the market by competing fairly with each other. Only in exceptional situations, and if the necessary measures are taken, would the sharing of such information with competitors be allowed.
The BCA’s recent decision shows that merely following the rules is not enough. In fact, third parties are also not allowed to pass on any information about competitors to you at all. A client that seeks a quotation for a certain service or specific goods and that wishes to use a competitor’s quotation as leverage in negotiations is actually breaking the rules. In principle, you as well as the client can be punished for that … unless you have explicitly objected to receiving such information.
So how should you do this exactly? Tell the person who supplies the information that he or she is sharing sensitive information with you about your competitors and that he or she is committing a competition law violation. State clearly that you do not wish to receive any information of this sort in the future at all.
Do you want to know more about the competition law restrictions on information exchange? Or would you like to create more awareness within your company about this? Then enroll in the Monard Law compliance training workshops. This is ideally the first step.
