All organisations must comply with competition law, which is designed to guard against anti-competitive activities. Such activities reduce competition and can lead to higher prices, reduced quality and levels of service, or less innovation. Failure to comply with competition law can lead to significant fines, compensation claims or agreements being unenforceable.
There are two key types of anti-competitive activity which organisations might engage in:
- agreeing not to compete with another organisation; and
- abusing a dominant position.
The University could be at risk of engaging in anti-competitive activity itself (for example when it acts as a supplier providing services to other organisations, or enters into research collaboration agreements, or if it were to share information about one supplier with another) and being exposed to the consequences of anti-competitive activity by others (for example higher prices from the University’s suppliers).
We need to guard against the possibility of anti-competitive activities.
General do’s and don’ts
- Price fixing: do not discuss with competitors the prices we do/are considering charging to our students or other customers. An organisation will break the law if, for example, it agrees with another organisation to charge the same prices to customers or to offer discounts or increase prices at the same time.
- Bid rigging: do not discuss bids for a contract with competitors. An organisation engages in bid rigging if, for example, it shares information about its bid with a competitor, it agrees to take turns to win contracts, it pays another organisation not to bid, it agrees with another organisation not to bid.
- Market sharing: do not agree to share markets or customers. An organisation engages in market sharing if, for example, if agrees with another organisation not to approach its customers or not to compete for certain customers (e.g. in a specific location).
- Sharing information: do not share information which reduces the competition between organisations i.e. regarding prices, production or supply chains.
- Abusing a dominant position in the market: do not abuse any market dominance the University may hold. An organisation may hold a dominant position if it has either more than a 40% market share, or it is not affected by normal competitive restraints. Abusing such a position might occur if an organisation were to impose unfair practices on customers or other organisations, such as making customers buy products they do not want (e.g. forcing the purchase of warranties for products) or charging consistency low prices which don’t cover costs to drive out competition.
- Before sharing information: consider whether the person who receives it may use it in a way which could affect trade – if so please check with your manager before proceeding.
- React promptly if you get put in a compromised situation: if you have accidentally been part of a discussion (in person or online) where anti-competitive comments were made, or you received a message which contained this information, leave the meeting immediately, making it clear that you are distancing yourself from the matters discussed, that you did not intend to use or act on the information that was exchanged or abide by any agreement made. Contact Legal Services immediately afterwards for further advice.
- If you are part of an industry association / body which meets regularly: check with the Chair whether competition guidelines have been put in place and circulated – this should be the norm. If the industry association for some reason does not want to do this please contact Legal Services to discuss why and what to do.
Specific guidance when making purchases:
Examples of what to look out for as a purchaser (which may indicate suppliers are engaging in anti-competitive activity) and what not to do:
Look out for
- Very similar prices being submitted by suppliers, where some price variation might usually be expected (or the opposite i.e. vastly different prices being submitted by suppliers, where little price variation might usually be expected).
- Prices being significantly different from those expected i.e. if a ‘should cost’ or estimate has been produced internally to inform budgeting.
- Prices changing across suppliers at unusual and similar times.
- Suppliers submitting competitive and uncompetitive bids periodically (i.e. taking turns to be the most competitive).
- Suppliers not submitting a quote or tender with no reason given, or where the reason does not appear credible.
- Very similar information is submitted by multiple suppliers, which suggests some comparison of quotes or tenders has taken place.
- Share commercially sensitive information about one supplier with another, this includes not disclosing one supplier’s bid (or aspects of it) to another supplier at any time.
- Award contracts to suppliers without following the University’s purchasing processes, which generally require competitive processes to be run.
The University’s purchasing processes (including the Tender Conduct Guide are designed to guard against anti-competitive activity by suppliers. Please read these carefully and get in touch with the Purchasing Department if you have any questions.
What to do if you have any questions or suspect anti-competitive activity is occurring / might occur
If you have any questions about this guidance or competition law requirements, or if you suspect anti-competitive activity is occurring or may occur in future please contact firstname.lastname@example.org (or the Purchasing Department where relevant) in the first instance to or you can also use the University’s whistleblowing process here.