27 November 2014
In the previous episode of this series, Mayer Brown JSM discussed the implications of sharing sensitive employment information with competitors. After understanding these implications, Colin (a senior HR professional) begins to panic…
Colin: We do not have any agreement to exchange information on staff wages and bonuses, but we share sensitive information with some of our competitors in practice. Is this a problem?
Mayer Brown JSM: The First Conduct Rule prohibits anti-competitive agreements as well as ‘concerted practices’.
‘Concerted practices’ cover different forms of coordination between competitors that fall short of an agreement. If there is practical coordination between competitors which has an apparent adverse effect on competition, the exchange of information between them, either directly or indirectly, may be considered “concerted practice” that violates the Competition Ordinance.
Colin: What about conferences to discuss intended pay rise amongst employers?
Mayer Brown JSM: This will be very risky. Exchange of information on intended pay rise reduces competitive uncertainty. Actual figures do not necessarily have to be discussed to violate the competition law. The mere exchange of information on the intended percentage of pay rise would constitute a restriction on competition.
Colin: What if such exchanges were not frequent?
Mayer Brown JSM: There does not have to be a regular or systematic basis for the exchange of information for it to be anti-competitive. In a recent case before the European Court of Justice involving T-Mobile, a single meeting between the competitors where they shared their intentions in relation to confidential remuneration information was sufficient to violate the competition law.
Colin: What if we do not exchange information but receive information?
Mayer Brown JSM: There have been cases in Europe where companies have violated the competition law by merely receiving strategic information from competitors and using such information, whether solicited or not. The European Court of Justice has made it clear that unless a company publicly distances itself from the information, or reports it to the relevant competition authority, it is regarded as passively involved in the concerted practice.
Colin: Alright, I will bear that in mind.