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Competitor Communications: Navigating the Gray Areas
Trade associations, competitive research, HR activities . . . outside of the expected dangers in the merger and joint venture context, regular business dealings involving information about competitor activities are rife with potential for antitrust violations. And the “rule of reason” approach taken by the FTC and DOJ can sometimes complicate, rather than clarify, appropriate conduct. In this episode of Thomson Reuters: Down the Hall with Practical Law, Antitrust Service Head Janelle Wrigley discusses how to safely navigate the gray areas relating to interacting with competitors and gathering competitive information.View transcript
Thomson Reuters: Down the Hall with Practical Law
Competitor Communications: Navigating the Gray Areas
Intro: Welcome to Thomson Reuters: Down the Hall with Practical Law, the show that provides practical insights and expert know-how in trending legal issues. No legalese, just expertise. With you host, Renee Karibi-Whyte.
Renee Karibi-Whyte: Welcome to another episode of Thomson Reuters: Down the Hall with Practical Law. I am your host Renee Karibi-Whyte and today we are talking about the antitrust topic of competitor communications. This topic is relevant for organizations of any size and touches on some unexpected areas. Here to navigate us through that gray space is Janelle Wrigley, Managing Editor of the Practical Law Antitrust Service.
Janelle Wrigley: Hi Renee.
Renee Karibi-Whyte: Hi Janelle. So Janelle has some very interesting experience. She worked with the FTC for a number of years after starting her career at Simpson Thacher and she actually worked in Istanbul, Turkey for some period of time. So welcome Janelle.
Janelle Wrigley: Thank you.
Renee Karibi-Whyte: We are talking today really about what kinds of conversations you can have with and about competitors, both internally and externally. And before we really get into the meat of it I want to just set the stage, what are the rules that people need to be concerned about? It sounds like this is something I think people often think about in the context of just mergers, but antitrust really affects so much more. So just give us a little more background and stage setting for this conversation.
Janelle Wrigley: Sure. And first, thank you very much for having me, I am looking forward to talking to you and our listeners about competitor communications, which can be a tough issue for businesspeople, even for lawyers to navigate.
So I think it helps to set the stage, as you said, to talk about the different context in which you might end up communicating with your competitors, and there can be an almost infinite variety of those contexts. One big category is planned exchanges with your competitors.
You might, for example, be engaging in a joint venture with them and you need to exchange information in order to accomplish the goals of your joint venture. You might be participating in a trade association or an industry survey where you are exchanging information for those reasons.
There’s also accidental exchanges that happen, where you are sharing information with maybe employees of one of your competitors. You can think of scenarios; you might be friends with somebody who works at a competing company, you go grab lunch; you might be at a conference and you are chatting with people during the break.
Renee Karibi-Whyte: And so those are the gray areas we are really going to get into today. Let’s talk about the general framework, so what are the rules — who sets the rules, what are the rules and the regulations in this area?
Janelle Wrigley: Sure. Well, the main rules come from the Federal Antitrust Statutes, I mean, at the end of the day that’s what we are talking about, which is the Sherman Act and Federal Trade Commission Act for our purposes.
The two federal antitrust agencies, the Department of Justice and the Federal Trade Commission, they do a lot of work in enforcing those rules and they also issue a lot of guidance. So it could be informal or unofficial guidance that will help kind of navigate some of those gray areas or understand how these rules might play in different factual scenarios. And the courts of course are always issuing opinions that provide some meat onto the bones of what you can and can’t do.
Renee Karibi-Whyte: So Janelle, in the big picture scheme of things, what do you really need to know about talking to your competitors?
Janelle Wrigley: Well, the bottom line is really that you need to have a very good reason to be talking to your competitors, and that’s a reason that should benefit consumers to be pro-competitive, and that you should be exchanging as little information as possible.
And the main question to ask yourself if you are wondering whether a conversation or some kind of information exchange with your competitor is legitimate, you should really focus on what the nature of the information is that you and your competitor are exchanging.
And the concern arises where it’s competitively sensitive information, so pricing information, maybe about new products, things of that nature; if it’s nonpublic information, so it’s something that would otherwise be secret; if it’s recent or current information; and if it’s very specific to your company. I mean, those are the four factors that will kind of raise alarm bells if you are either getting that kind of information from your competitors or you are providing it. And so that’s something to always keep in mind whatever the scenario is in which you are talking to your competitors.
Renee Karibi-Whyte: Can we talk about pricing for a minute, because pricing is of — it’s really several different things coming into play. It’s doing perhaps market research. It’s getting an understanding of the amount of work that something takes. There are a lot of things that go into making pricing decisions. Is the restriction just around the ultimate price that’s set or could it be relating to those components that go into making a pricing decision?
Janelle Wrigley: Sure, that’s a really good question, and it’s something I think people don’t realize. When they think about this issue, they think, oh, maybe I shouldn’t just disclose the price that we are setting, but price can include a lot of things. It can include the costs that are going — underlying the price that the company might arrive at, production abilities, there’s all kinds of inputs and related factors to price that could be considered competitively sensitive.
A good rule of thumb when you are looking — thinking about a type of information and trying to figure out if it’s competitively sensitive, think about whether your company would change its decision making around that piece of information, even if it’s in a smaller or subtle way, would it affect the decisions that they make out there in the competitive landscape? And if so, that’s probably a sensitive piece of information that you shouldn’t rush to disclose without a good reason.
Renee Karibi-Whyte: So a lot of this seems very subjective in that there’s a lot of kind of reasoning that you have to do in order to decide if what you are doing is inappropriate or not. How do the agencies draw the line? What weighs in your favor or against you when they are doing that analysis? Are there specific industries they are paying closer attention to? Is there an intent factor? What are the things that weigh against a company that might have engaged in some of this behavior?
Janelle Wrigley: Sure. So the two federal antitrust agencies, the Federal Trade Commission and the Department of Justice, as you are alluding to, are fairly active in enforcing the antitrust laws in this area and making sure that competitors aren’t inappropriately exchanging information.
To set the scene a little bit, there’s two ways that they enforce antitrust laws in this area. The first way is that exchanging information with your competitors can be a violation just by itself, without anything else, if it’s harming competition in some way. So they will apply what’s called the rule of reason in antitrust law and balance the potential benefits of that information exchange against the potential harms.
But the second risk that you face as a company if you are engaging in inappropriate communications with your competitors, it’s much more rare, but it’s a much more serious scenario, in which some kind of information exchange can become corroborating evidence of a price-fixing conspiracy, and price-fixing conspiracies, that can lead to criminal liability and some very serious consequences for the company.
So those are the two scenarios that the agencies will be looking at. We talk about them a little bit differently, but in general when they are looking at information exchanges they will be looking, as I was alluding to earlier, at the type of information that’s being exchanged, how sensitive is it really. They will be looking at the quantity of information that’s being exchanged, how frequently it’s being exchanged, what is the party’s intent. Maybe they are exchanging information as part of a joint venture and they really need to do it in order to accomplish the aims of the joint venture in a way that’s going to help customers. So that’s okay.
The agencies will also look at the industry structure. There’s only a few competitors and they are talking to each other a lot, that could be a problem. And another important factor is, are there safeguards in place around the exchange of information.
Renee Karibi-Whyte: So that would be perhaps a compliance policy within one of the organizations or what kind of safeguards?
Janelle Wrigley: More safeguards around whatever the actual information exchange is. Say, for example, what’s happening is the companies are all participating in an industry-wide survey of their cybersecurity practices, that’s something that could actually have some real benefits. Maybe they will be sharing best practices in a way that everyone can benefit from.
The safeguards that you would want to have in place are you want to have a third party managing that information exchange. You want the data to be anonymous. You just want to have the process managed under the guidance of counsel, I should add, in a way that really minimizes the risk. So that’s something else that the agencies will look at when they are evaluating this kind of conduct.
Renee Karibi-Whyte: So let’s talk for a minute about the more serious allegation of price-fixing. It sounds like a very serious allegation, and it seems like the kind of thing that if you are doing it, you know that you are doing it. Is there a way that someone might be engaged in that kind of conduct, but not realize it?
Janelle Wrigley: You can certainly get caught up in a price-fixing investigation inadvertently. I mean, I think that’s kind of a nightmare scenario for companies when you are thinking about information exchanges and contacts with your competitors.
Say, for example, you have a company, it’s minding its own business, it’s competing on the merits, it’s doing everything it’s supposed to be doing, but little does the company know all of its competitors are actually in a price-fixing cartel together. So the Department of Justice starts to investigate that cartel, comes looking at the company’s documents and discovers that employees are having lunch with the employees of competitors. They look at the calendars and there’s all these meetings between the employees of the different competitors.
Well, even though those meetings and those lunches might have been perfectly innocent, suddenly the DOJ is going to have a lot more questions. So you have then been brought into something unnecessarily that could have very serious consequences.
Renee Karibi-Whyte: And let’s say you have a relationship like that with someone based on, perhaps going back to the trade association, people who do the same thing, like to talk to other people who do the same thing as they do, how can you support your innocence, I guess, that this is just a very innocent relationship, we were talking about XYZ? Does that mean that every time I go to lunch with someone who does what I do, there might be a danger of talking about — that I have to document what we have talked about at that lunch?
Janelle Wrigley: I mean, you have to be — we live in a real world, you have to be realistic always and the advice that you give your employees and what you do to minimize risk. I think the key is really just to minimize to the extent possible those kinds of interactions.
I mean, unless it’s your best friend and you really need to be having lunch with them every week, the less that you unnecessarily talk with employees of your competitors, the better. It’s going to lower the chance that something gets misinterpreted. Lawyers are always saying this to their clients, watch what you put in writing, ambiguous emails can create all kinds of trouble from an antitrust perspective.
So to the extent that you can be sort of specific about what you are talking about and minimize unnecessary conversations, I think that will benefit the company from an antitrust perspective.
Renee Karibi-Whyte: So there are a lot of trade associations for a large number of industries and it seems like those associations and the meetings that they have are ripe opportunities for antitrust violations.
Janelle Wrigley: Absolutely.
Renee Karibi-Whyte: Can you talk a little bit about that and how to balance that danger with the benefits of a trade association?
Janelle Wrigley: Sure. Trade associations and their meetings certainly keep plenty of antitrust lawyers up at night, because you have a whole bunch of competitors getting together and talking, which can lead to violations, as you noted. And there are plenty of examples of particularly the Federal Trade Commission bringing enforcement actions against conduct that arises out of trade association activity.
I want to be clear that the vast, vast majority of trade associations and their meetings and their conferences go off without a hitch. I mean, it’s not that there are government agents hiding in the bushes waiting to arrest people on their way to lunch. But there are opportunities, as you said, for conversations to go in a direction where you may start talking about information or sharing information that you shouldn’t be or that the association may decide to conduct a survey that doesn’t have the appropriate safeguards and things of that nature.
So I think the ideal is from a compliance perspective for training your employees, you just ideally want to make sure that the employees are aware of the parameters of what they should and shouldn’t be talking about before they go to those meetings. And if there are any questions that arise while they are there to know that they should call the company attorney and get some guidance.
Renee Karibi-Whyte: So if I am an attorney advising someone, I am either working with the compliance guidelines or not, what should I tell my employees to make sure they do or don’t do at that trade association meeting?
Janelle Wrigley: Sure. The bottom line is minimize your interactions to the extent you can. I mean you have to be realistic. The point of these meetings oftentimes is to network, to talk to people, to share information. Be cognizant of not sharing sensitive information, nonpublic information, very company specific information. Try to keep things at a high level. If you feel uncomfortable with the direction that a conversation is going in, try to get out of that conversation or leave the meeting as soon as you can. Don’t create a situation where a judge or government enforcer might misunderstand what took place.
Renee Karibi-Whyte: I read somewhere that people are supposed to loudly announce that they are leaving the meeting because they are uncomfortable of the conversation, does that actually happen?
Janelle Wrigley: Right. I mean, that’s a classic example where sometimes antitrust advice can be a little disconnected from the way the world works. I mean that is the classic antitrust advice in that situation. If you are in a meeting, stand up, shout, I disapprove and then walk out the door. I mean, who really is going to do that? No one or very few people.
I think the more realistic advice to give, especially if you are not sure if the conversation is appropriate or inappropriate, is try to leave as soon as you can. Call your lawyer, the company’s lawyer as soon as you can to get some advice. You really can’t expect people to create a big ruckus in front of all of their peers, it is a little unrealistic.
Renee Karibi-Whyte: Okay. Now, one of the documents I came across on Practical Law was one that looked like it was intended to be given to businesspeople who are attending a meeting. Now, I have been to hundreds, literally hundreds of conferences over time and I have never seen anything like this. I have never been asked to sign anything like this. Do people actually use documents like that?
Janelle Wrigley: They do, and sometimes it depends on the type of conference that an employee is attending, sometimes it depends on the type of employee. I mean certain employees, certainly high-level executives or people that have a lot of decision making authority over prices, it’s a bit more sensitive for them if they are going to be going out and talking to competitors, so they might be more likely asked to review a document, including Antitrust Guidelines before they go to a conference.
However, it’s never a bad idea for any company to remind its employees as often as possible before you go off to a trade association meeting or anything where you are going to be interacting with competitors, to stop and remind them about what the Antitrust Rules are, just so you have those in the back of your mind if you happen to run into a friend who works at a competitor, or even if not a friend and you are just chatting with people during the breaks.
Renee Karibi-Whyte: What role does the level of seniority play in that determination?
Janelle Wrigley: It is very important. When we are talking about reviewing the antitrust agencies or even in a private lawsuit, when you are talking about evaluating whether an information exchange has crossed the line and become an antitrust violation, factual context is very, very important. And so, as you might imagine, the high-level employees or employees that have more direct responsibility over pricing and competitive decisions, they are going to raise more concerns. I mean there is always accommodation for the factual context in this area.
Renee Karibi-Whyte: So we talked a little bit about the realism or lack of realism of some of the guidelines. Let’s move to, within a company, there are sales and marketing people who might get information all the time about what their competitors are doing and they may actively seek that out as part of their jobs. What are the guidelines there that we need to be aware of, or that attorneys should be talking to their clients about?
Janelle Wrigley: Sure. You have hit upon a very important area of competition, really. I mean, this is a classic example of conduct that if it’s done the right way we want to be encouraging, we want companies to be — trying to stay a step ahead of their competitors, to understand what their competitors are doing so that they can be better.
Renee Karibi-Whyte: So that’s the pro-competitive conduct.
Janelle Wrigley: Right. I mean that’s what competition is. The danger comes in largely when it comes to competitive intelligence gathering on what is the source of the information. I mean the number one rule is, don’t ever, ever call your competitor and ask them what they are doing. You just don’t want any kind of direct unsupervised communications between two competitors.
Renee Karibi-Whyte: So you mentioned a couple of things, you said direct and you said unsupervised. What is unsupervised and what is direct? So for example, if I use an intermediary, I contract with the company to find out something and then they call my competitor.
Janelle Wrigley: Sure. So you might have very good reasons that you want to find out information about what your competitors and what the industry as a whole is doing. Maybe the industry is facing a lot of problems with fraud and you all need to come together, or it would be beneficial if you could all come together and find a way to combat that. That’s just one scenario that comes to mind, there is plenty.
The reason I said unsupervised is because the antitrust laws are flexible enough to allow companies to do that if there’s a good pro-competitive reason to do it, but it should be under the guidance of counsel to make sure the safeguards we were talking about earlier are in place.
And in general, what gets looked favorably upon from an antitrust perspective is if you have a third party that’s sort of managing that exchange. So instead of companies just directly sending each other all their information, you are going to have a neutral third party who collects the raw data, filters it down so that only the competitively benign information is getting shared. It’s anonymous, it’s aggregated, all of those kinds of things to make sure that nothing inappropriate is taking place.
Renee Karibi-Whyte: So can that third party be the trade association or is that not seen as neutral?
Janelle Wrigley: It ideally shouldn’t be. I mean unless it’s someone that’s really not participating in the industry themselves.
Renee Karibi-Whyte: So there’s an association management company, for example, that manages a trade association that might be okay versus a member managed associate?
Janelle Wrigley: Exactly.
Renee Karibi-Whyte: Okay. And then just to go back to the actual sales information and the pricing information that I as a marketer or a salesperson, as a salesperson wants to know, they specifically want to know that information that is sensitive and is specific. What are the rules around gathering that information?
Janelle Wrigley: So in general if the information is coming from a third party, you probably, maybe are okay.
Renee Karibi-Whyte: And here’s the gray areas we were talking about.
Janelle Wrigley: Right. But there’s plenty of caveats that I could put around that. I think at the end of the day, the advice that you should give your salespeople or your marketing staff is, don’t go out looking for non-public information from customers, from third parties. Use public sources or let those, entities or customer, whoever, let them volunteer the information to you, I mean, that’s a much safer way to do it.
You can think of the example, if you have a salesperson, who’s negotiating a price with a customer and you offer a price to the customer $10 for your widget that you sell and the customer comes back to you and says, while your competitor down the street offered me $9. Well, that seems pretty pro-competitive. They volunteer the information and they’re trying to get a better price out of you, and that’s a benefit to the consumer and that should really be okay.
But, going back to the example of you don’t want to accidentally implicate yourself, in a price-fixing conspiracy, it’s never a good idea to be really seeking out non-public competitively sensitive information regardless of the source, just to minimize the risk that it could be misinterpreted. And as part of that one thing to tell salespeople or anybody, who receives that kind of information even if it’s from a legitimate source, you should always document on email or whatever it is. Make a note where you got that information from, so that if the government happens to see that document one day, they don’t think that you’ve got it directly from the competitor.
Renee Karibi-Whyte: So it sounds like it is okay to pass it on to perhaps a centralized place within your organization, someone who gathers the competitive intelligence as long as you notate it, where you got it from the source of it and how you came to get it.
Janelle Wrigley: Generally speaking, yes, I will go back — I will fall back on my repeated phrase that “Call your company’s lawyer and ask before you really do anything.” I say that because this is — price-fixing conspiracies, the risk of getting caught up in a price-fixing conspiracy, this is the absolute nightmare for any company. The penalties are so high that you really have to be careful about the risks and you always want to make sure that whatever you’re doing is closely watched by the people who are legal experts in that area.
Renee Karibi-Whyte: So I want to touch on another term that you use and that’s ‘Public’, so what constitutes public information?
Janelle Wrigley: Really anything that’s out there in the public sphere, that maybe a company has reported something in a press release, that’s been reported in the media even; even if it was initially non-public information or initially maybe a journalist got a scoop about something a company is doing and published article about that; that’s still public information, it’s out there in the public domain.
Renee Karibi-Whyte: So anything you can get online essentially, even when the company doesn’t post it directly, if someone else has put it online then it constitutes public information.
Janelle Wrigley: Exactly, and then that’s getting back to the issue of what is the source of the sensitive information. The main concern you’re thinking about competitor communications and these information exchanges is, you don’t want two competitors agreeing with each other to come together and hurt competition in some way.
So if you’re getting the information from a public source, from Google, from ‘The New York Times’, from your customers, there’s less of a risk there that there’s an agreement between two competitors because the other competitor is not really involved in that relay of information.
Renee Karibi-Whyte: Speaking about competitive analysis, let me give you a hypothetical situation; everyone is always looking to find out what their competitors are doing in terms of their sales price process, in terms of pricing, et cetera, and sometimes people hire a third party in order to conduct that analysis. What kind of culpability would the hiring company have for the consultants’ potential misrepresentation in terms of going after that information that might be non-public?
Janelle Wrigley: Well, I can only answer this from an antitrust perspective. So in terms of culpability, there may be issues that I’m not necessarily thinking about, and of course, you always want your company and your agents and whoever you hire to be acting in an ethical way; however, they may be gathering information that you’re seeking; I would reiterate, you do always, nonetheless still have to be careful when you’re going out and seeking that information instead of letting it come to you, say in a context of an actual price negotiation.
Renee Karibi-Whyte: And would you have to have some kind of agreement upfront with that consultant that you might be using in terms of providing kind of a code of conduct or disclaimer around potential antitrust violations?
Janelle Wrigley: It’s not a bad idea.
Renee Karibi-Whyte: So it seems like there are some areas within this competitive intelligence arena that don’t really impinge on antitrust at all. So where does antitrust and something else begins, like what are the boundaries of antitrust with respect to gathering competitive intelligence?
Janelle Wrigley: Sure. I feel like this is the million-dollar question. If I can answer this then you would never need antitrust lawyers anymore. It can be difficult to know where that boundary is. An important factor to consider, one area where Antitrust really focuses, at least within the context of what we’re talking about today is, is there some kind of agreement between two competitors that harms competition?
So when you have more of an exchange of information or the coming together of –the competitors who are actually directly in contact with each other that obviously is an area where antitrust is going to have something to say.
When you’re talking about collecting market intelligence, as we are, or you may not be directly interacting with a competitor, you’re just minding your own business and trying to find information on your own, that is more of a difficult question whether you’re going to accidentally violate the antitrust laws in doing that.
In antitrust, it always comes down to unless you’re talking about cartels and price-fixing, but outside of that it really comes down to harm to competition. You have to take a step back and think about, am I doing something that is going to raise prices higher than the otherwise would have been. Reduce output, I’m going to produce last time would have otherwise.
It’s a difficult question to answer and that’s why there are antitrust lawyers but that is often the sort of the bottom line.
Renee Karibi-Whyte: So the FTC and DOJ recently released guidance for HR professionals on naked wage-fixing and no poaching agreements. First of all, what is naked wage-fixing, and secondly, is this a new rule or a new requirement?
Janelle Wrigley: Sure. It sounds much more exciting than it is, unfortunately. Naked wage-fixing agreements or any when you’re talking about any kind of naked agreement in antitrust, you’re talking about hardcore violations where there’s no pro-competitive benefit. You’re literally talking about a competitor, calling up another competitor and saying in this case, let’s agree, we’re not going to pay more than $50,000 to our employees going forward. That’s just an agreement to fix wages.
Renee Karibi-Whyte: So the naked part is that direct communication.
Janelle Wrigley: Exactly. There’s no kind of ambiguity about what’s going on. And the reason that’s important is because the Department of Justice, which has the power to criminally prosecute antitrust violations, they reserve that criminal power for only the most serious violations, which is price-fixing, rigging bids and things like that that are no one questions that those are very serious antitrust violations.
So as for whether this is a new rule, it really isn’t the new guidance that was aimed at these HR professionals is restating the law that’s always been out there; but what is new, is the DOJ is saying that they’re willing to prosecute wage-fixing agreements criminally, which in the past they have not done that.
And it’s also I think an announcement by the agencies putting companies on notice that they need to realize that employment is a marketplace as well. You compete for employees just the way that you compete to sell your products and services and you need to realize that the antitrust laws apply there just as much as they do in other contexts.
Renee Karibi-Whyte: So as an attorney advising companies, you would recommend highly that they take a look at what they’re doing to train HR people, I would imagine.
Janelle Wrigley: Absolutely.
Renee Karibi-Whyte: Okay. Now one of the pieces of guidance that came along with that is that companies are not supposed to receive documents that talk about employee compensation. However, every job I’ve ever applied for they’ve asked what my compensation is? What’s the disconnect there?
Janelle Wrigley: Well, I mean this is again where factual context can be very important in the antitrust world. First, in that scenario the information is coming from the job candidate and not from a competitor. So already that reduces the risk if there’s some kind of anti-competitive intent going on.
And also, asking a single-job candidate for their salary information on a one-off basis, you can think that it’s probably hard to make the case if that’s going to really have a significant effect on the salaries that are being paid within a specific market. Really the government is going to be looking at the exchange of more comprehensive information.
So when it says, “Don’t receive documents that contain your competitors’ salary information”, I think really that’s directed at a higher volume of information than just asking a single-job candidate what their previous salary was.
I will say, outside the antitrust context, that is an issue that is being looked at more-and-more and this is getting more into labor and employment, but I think some states are trying to ban that practice and things like that, so you never know. And it raises a good point that you should never just stop with the antitrust laws, there’s all kinds of — especially state laws that can be very important when you’re evaluating competitive conduct.
Renee Karibi-Whyte: May be a topic for another podcast.
Janelle Wrigley: May be.
Renee Karibi-Whyte: So one of the criteria for finding violation is that it’s unrelated or unnecessary to the larger legitimate collaboration and that sounds like a merger in the context. A merger would be fine or an integration, it would be fine, but what’s the scenario where it might be more doubtful?
Janelle Wrigley: You’ve struck on an important aspect of information exchanges again, which is, there are a lot of legitimate reasons to be exchanging information with your competitors. As you said, it could be in a context of a merger, you’re doing due diligence, there’s a certain amount of information exchange that needs to take place. We are talking about wages right now, it could be salary information needs to be exchanged.
The danger zones appear when you’ve got collaborations between competitors. If the collaboration looks like a pretext to exchange information, you can’t just exchange price information and say, oh, don’t worry we’re a joint venture, we can leave us alone and the government is not really going to buy that.
The danger also appears if the information that you’re exchanging doesn’t seem to really relate to the purpose of the collaboration, that will raise red flags, and of course, if you’re exchanging far more information that is really necessary to achieve whatever goals you’ve set out for yourself, for that collaboration.
Renee Karibi-Whyte: Okay. So, Janelle, we’re running out of time and I want to make sure that our audience has some really clean takeaways from what we’ve talked about because we’ve covered a lot of ground during this conversation. Can you just talk about first the top trouble areas when communicating with competitors?
Janelle Wrigley: Sure, so some of the main areas where I think close scrutiny is warranted, where ideally attorney should be involved. As we’ve discussed a little bit, trade association activities. I would also say joint ventures or any kind of collaboration with competitors, making sure there’s appropriate safeguards, an oversight of that, and the last thing I would mention, which we’ve also discussed a little bit is, salespeople, marketing teams, certainly any employees that have any kind of control over prices, really making sure that they’re adequately trained about what they can and cannot do and that they have the appropriate contact information if they have questions.
Renee Karibi-Whyte: Okay, and we’ll have two more clean takeaways. The first one is, what are the top three non-obvious don’ts when communicating?
Janelle Wrigley: Top three non-obvious don’ts; I would say, first of all, don’t think the prices are the only things that you can’t talk about with your competitors. As we discussed a little bit salaries, employee benefits, your costs, maybe new products that you have coming out, there’s a whole world of sensitive information that you should be careful about sharing too widely. I would also say, don’t go out looking for competitive intelligence especially pricing information certainly without the guidance of counsel from your customers or other third parties to the extent possible you should let that information be volunteered to you if at all, and then lastly, I would say, don’t be paranoid.
It’s always important to — it’s hard, but it’s always important to couch antitrust advice in the real world, so don’t be paranoid, but do be prudent when you are ever in doubt, look at your company’s policy, which I don’t know if I’ve mentioned it, but sometimes company policies can be much more conservative than what the law allows you to do, so don’t take my word for it listening to this podcast, you should always read your policies, talk to your company’s lawyer.
Renee Karibi-Whyte: Okay. So, Janelle, we’d like to wrap up our show with a question on advice. What is the best advice you didn’t take that you wished you had?
Janelle Wrigley: I think the best advice that I unfortunately ignored was to wear sunscreen in my youth, which I did not do, and as you can see I’m covered in freckles, so I probably should’ve listened to my mother on that one.
Renee Karibi-Whyte: Well, thanks again, Janelle Wrigley, Managing Editor of the Practical Law Antitrust Service.
This concludes another episode of Thomson Reuters Down the Hall with Practical Law. If you’ve likely heard today, please consider rating and reviewing the show and subscribe in iTunes.
Until next time thanks for listening.
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