Can you tell us a bit about the ERM Middle East Summit set to take place later this year?
I am delighted to join the ERM Middle East Summit and highlight specific competition policy (or antitrust) issues that companies could be facing. I view my presence at the conference as a unique opportunity for us, competition authorities, to explain to those managing risks in companies which competition risks they face, and how they can minimise these risks.
So, what are these competition related risks?
Fines for breaching competition rules can be significant. The European Commission has fined Google €2.42 billion for abusing its dominant position in June last year, and it imposed a total of €2.93 billion fines for the members of a truck cartel a year before! The fine is limited to 10% of the overall annual turnover of the company, which can be a very substantial amount, especially taking into account that the 10% limit may be based on the turnover of the group to which the company belongs when the parent of that group exercised decisive influence over the operations of the subsidiary during the infringement period.
Are there additional risks?
Yes, on top of the fine, companies can be required to compensate companies or individuals who have been harmed by the anticompetitive conduct at hand, in follow-on damages actions. Moreover, companies who have breached competition law may suffer significant reputation damages, because the anticompetitive is known to their customers.
How can companies avoid these risks?
Designing compliance programmes is essential. Companies increasingly inform their staff of competition rules and the associated risks. It is important that such programmes have a holistic approach, meaning that they cover all areas of the business, at all levels in the company. In particular, it is crucial that the incentives of staff are aligned with the overall objective of the company to comply with the law. For instance, such programmes will not be very effective if sales teams are told not to agree with their competitors, but have financial incentives to do so.
Alexis Walckiers will be speaking at the ERM Middle East Conference, organised by IQPC, from September 25-27, 2018 in Dubai.
International Finance is a media partner for the ERM Middle East Conference