How Competition Law can get you a fair advantage
21st March, 2014
Did you know that the smartest businesses view competition law as a tool for success rather than as a compliance box to be ticked?
You might have been told that breaching competition law brings the risk of prolonged investigations, heavy fines and even possible imprisonment for the firms and individuals involved.
You might have been asked by your trading partners or trade associations to confirm, as part of an audit exercise, that your business is “competition compliant”.
As a result, you might be forgiven for thinking of competition law as just another regulatory burden to distract you from your day job.
While it is essential to treat competition law compliance as a priority, the anxiety-inducing headlines can sometimes overshadow this simple, positive fact: competition law can provide the answer to some of your trickiest strategic and operational conundrums. This is especially true for businesses that are growing quickly in challenging market conditions.
Still unconvinced? Consider the following examples.
When your order book takes off, you will look to third parties to get your products to market. Which is better for your business, an agent or a distributor? Competition law has the answer.
What can you do to protect your distributor in one territory from parallel sales by your other sales channels? Competition law has the answer.
What restrictions can you lawfully place on your suppliers and customers, and how do you prevent your sub-contractor dealing direct with your customer, cutting you out of the supply chain? Competition law has the answer.
If you are considering expanding your business further, competition law can assist you to identify the acquisitions with the best prospects of success.
Will the competition authorities allow you to acquire your biggest competitor to improve your margins? What are the risks of a lengthy merger control investigation, and what can be done to make this process quicker? What if you entered into a joint venture – is that a short-cut to success? Competition law has the answer.
When all is not plain sailing, competition can be used to protect your business’s position.
How can you prevent the customer on whom you depend for your livelihood exploiting their market power so that you have the pain and they get the gain? Competition can help as it can when helping to stop your powerful competitors tilting the playing field in their favour.
If you play and win by the rules, why shouldn’t your competitors? Competition law will help you ensure that unfair competitors, not your business, are visited by investigating officers.
As these examples show, factoring in competition law principles as an integral part of your trading arrangements and growth strategy will secure you commercial benefits while minimising the risk of burdensome legal challenges and investigations.
This will leave you free to put your energies into developing your business and giving you a real competitive edge in your dealings with customers, suppliers and competitors.
* For more information on the issues raised by this article, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
