Competition Guidelines
This document aims to provide general assistance in the area of Competition Law to those persons acting as representatives of Telco Industry in WAC.
It should be emphasised that this document provides general information and thus may not be covered all possible competition-related situations which may arise within the WAC. Therefore, we recommend consulting competition lawyers for questions about specific situations.
Competition Law: What is it and what does it prohibit?
Competition Law seeks to maintain effective competition in the market.
Competition Law prohibits, among other practices, agreements between competitors which impede, restrict or distort competition. This includes not only agreements in the form of written documents, but also verbal and informal commitments.
This guide aims to describe the main agreements with competitors which risk violating competition law. However, be aware that this is not a comprehensive list. Any agreement that impedes, restricts or distorts the level of competition between competitors may be considered a competition infringement. Therefore, please contact your company competition unit for questions regarding any type of agreement.
As a general rule, agreements between competitors are considered illegal when they aim to eliminate competitors or exploit consumers:
Fixing prices
Limiting production, technological development or investment
Share markets or clients
These types of agreements are almost always considered unfair.
However, other agreements between competitors can be considered legal when they have a legal cause and are necessary for providing efficiency to the market in terms of technical improvements and benefits to consumers. Most organisations of standards generally constitute an exception of this type but WAC is more than that. Therefore a series of precautions should be taken to avoid unintentional competition infringements . These precautions are described below.
Rules on the internal functioning of the WAC
All constitutional agreements, statutes, and internal work procedures of the WAC, as well as other relevant documents, should be revised by competition lawyers to assure that they are in accordance with competition law, particularly:
That the organization is open and does not restrict the participation of new members.
That participation in the setting of standards is open, transparent and non-discriminatory.
That the adoption of standards is voluntary.
That the capacity of product and service differentiation among members is not limited.
Similarly, in the general organisation of the board’s work and in order to avoid situations that could be interpreted as adverse to competition, the following are required:
Always consider the purpose of the organization and participate only in conversations which favour this purpose.
Prepare the agendas for meetings in advance, noting topics to be discussed, as well as the manner in which each topic is treated, and avoiding any imprecision which could lead to compromising interpretations.
Accept and follow the agenda chosen, avoiding the discussion of topics not included, which could touch on aspects discussed in the next section.
We recommend taking minutes at all meetings. These minutes should be revised by all members of the board to assure that they faithfully reflect topics discussed in the meeting in agreement with the previously approved agenda. If necessary, minutes should be approved at the meeting’s conclusion or at the beginning of the next meeting.
Recommendations for the conduct of representatives
Representatives taking part in WAC, are urged to observe the following guidelines:
As a general rule, maintain an independent behaviour on all issues which are out of scope of the collaboration agreement.
Do not offer information on current or projected prices, changes in fixed prices, price margins, discounts or subsidies.
Do not accept such information from competitors.
Do not provide information on current or future expenses related to the acquisition, development or manufacture of any product.
Do not accept such information from competitors.
Do not provide information in price changes affecting your company’s products and services, nor on price stabilisation policies affecting these products and services.
Do not accept such information from competitors.
Do not provide information on dates on which you will increase or decrease your prices.
Do not accept such information from competitors.
Do not provide information on procedures for setting prices or factors affecting the setting of prices.
Do not accept such information from competitors.
Do not provide information on sales and service conditions.
Do not accept such information from competitors.
Do not provide information about the setting of production quotas among competitors.
Do not provide information on the distribution of markets, clients, suppliers or territories.
Do not exchange detailed information on the individual activities of each business in matters that could be considered business secrets, not covered by the statutes that have been approved by a competition lawyer. For example, do not exchange company plans for design, production characteristics, distribution, marketing, dates for launching new products, or the clients or territories targeted by new products. Also prohibited is the exchange of information on changes in business, production capacity or production and distribution.
Do not commit to joint purchasing or sales without previous advice from the competition unit.
Do not discuss market shares of board members or of third parties.
All guidelines apply mainly to the area of agreements between competitors. However, competition-related problems may also arise in already existing relations between clients and suppliers. For any questions, please contact the competition lawyers.
