Anda di halaman 1dari 5
P ULP AN D P AP ER P RODUC T S C OU N C I

P ULP AN D P AP ER P RODUC T S C OU N C I L

ANTITRUST COMPLIANCE GUIDELINES

Introduction

The economic systems of the United States of America, Canada, the European Union and other nations are based on the operation of free markets in which rival businesses compete vigorously to provide the best products and services at the lowest prices.

Central to the operation of free markets is the absence of restraints on competition among competing firms. While antitrust enforcement authorities have acknowledged the valuable contribution of trade associations to the well being of the industries they serve and the economy generally, the collaboration of competitors in any endeavour is perceived as providing opportunities for illegal activity. The Pulp and Paper Products Council (PPPC) recognizes the fundamental importance of complying with competition laws and has always taken most seriously its commitment to uphold them. In furtherance of this, PPPC, regularly reviews and updates its competition law (antitrust) compliance policy.

The complexity of antitrust and competition law makes it impractical in this very brief outline to include all the principles in those laws. For these reasons, these Guidelines are intended only to alert PPPC members and staff to those types of association activities which are most likely to present antitrust law compliance concerns.

Overview of antitrust laws

Antitrust and competition laws (together “antitrust laws”) prohibit most business behaviour that unreasonably restrains competition. The centerpiece of these laws, and the one most applicable in the context of trade association compliance, is the prohibition, as a general rule, of any practice or agreement that tends to limit competition by, e.g., fixing prices, curtailing production, allocating markets, to name a few. An impugned agreement need not be, and in practice seldom is, explicit. The courts have been astute at finding agreements based on very subtle, often circumstantial evidence. Moreover, and this is most important to keep in mind in the case of trade association activities, the illegal agreement or arrangement seldom arises from a single incident. The typical antitrust conspiracy case covers a multiplicity of documents, events and conversations, often spanning a period of many years. It is the accumulation and interaction of these various

1200 McGill College Avenue, Suite 1000

Rue des Colonies 11, Suite 111

W

www.pppc.org

Montreal QC H3B 4G7 CANADA T +1 514.861.8828

B-1000 Brussels BELGIUM T +32 2.517.6082

E

general@pppc.org

elements that constitute the prosecution’s or the plaintiff’s case. Participants at a meeting sometimes ask if a particular subject may be raised. It is possible that a one-time mention of a subject that borders on the sensitive area could not alone form the basis of liability, but it could add to an accumulation of circumstances which, together, at some point in the continuum, would be sufficient to tip the balance and invite an investigation or complaint resulting in liability.

Antitrust laws also prohibit anti-competitive practices amongst buyers, such as agreements to pay not more than a certain price for a product that is an input to their business or not to do business with a supplier or customer.

Liability can result in the imposition of very large fines, imprisonment and prohibition orders or any combination of the foregoing in the United States and Canada. Proceedings can be directed at companies and their directors, officers and employees. Trade associations are often involved at the investigation stage and may be implicated, but less often, at the prosecution stage. Private lawsuits may also be undertaken by an injured party. These are particularly prevalent in the U.S. where the courts are empowered to award treble damages. In Europe, the sanction is an administrative fine, often in a substantial amount.

There are far reaching agreements for cooperation among enforcement authorities in numerous countries, and foreign entities are in many situations subject to local laws in the countries in which they do business. The U.S. and the EU both apply their antitrust laws extra-territorially so as to reach illegal activity that may have taken place entirely off shore but with effect on commerce within their territories.

Purpose

The purpose of an antitrust compliance plan in most manufacturing or service providing firms is to protect the firm itself, by setting down a behavioral code to be followed by its directors, officers and employees, from the various types of antitrust liability, including liability that results from illegal agreements or arrangements with competitor firms.

While trade associations cannot be unconcerned with antitrust compliance of this kind (they do in some instances have competitors in the form of rival associations and consultants who provide similar services), the potential for liability, in their case, is somewhat different for a number of reasons. For trade associations, therefore, the emphasis in antitrust compliance (and in the present Guidelines) is more on avoiding conduct and activities that could be construed as engaging the liability of its members, who are competitors of each other. In this sense, the compliance plan of an association complements a member’s own compliance plan, which, in any event, will likely offer some guidance on participation by employees in trade association activities.

PPPC ANTITRUST COMPLIANCE GUIDELINES

September 2005

The purpose of these Guidelines is to ensure that:

  • 1. The antitrust laws are observed, not only to the letter, but also in a manner that will not present the appearance of possible illegality. In the light of the extremely costly consequences of violation of antitrust laws, a conservative approach to compliance is adopted.

  • 2. Staff is informed in antitrust matters generally and, in collaboration with antitrust counsel, involved in effective monitoring of PPPC’s activities.

  • 3. PPPC’s activities are limited to those which will not expose members to antitrust liability and that those activities are conducted accordingly.

  • 4. Activities sponsored by PPPC are not used as an opportunity for the conduct of illegal activities by members outside of PPPC’s approved activities.

  • 5. Members and their representatives participating in PPPC’s activities are reminded regularly of its antitrust compliance policy and the requirement that it be strictly observed.

The current compliance Guidelines have been developed on the basis of the present activities of PPPC. Should other activities be considered at some future time, antitrust implications will be assessed carefully at that time.

Activities

PPPC, through its various product groups (associations), carries on the following activities:

  • 1. The collection of data from members and other sources and the development and dissemination of statistical reports and information based thereon.

  • 2. Organizing periodic meetings and conferences to present these reports and hear guest speakers on topics relevant to the industry.

  • 3. On some occasions, in association with a meeting or conference, the organization of a social event, usually a dinner or luncheon.

  • 4. Upon request, consulting with individual members on specific projects.

Antitrust compliance principles

The following subjects are excluded from all PPPC activities:

  • 1. Members’ or non-members’ current or future prices. Past prices may be alluded to in certain contexts approved by counsel.

PPPC ANTITRUST COMPLIANCE GUIDELINES

September 2005

  • 2. All matters that affect price, such as discounts and credit terms. These subjects, and any others that affect price or agreements on the terms and conditions of sale, such as warranty or delivery provisions, must be subject to competitive forces as much as price.

  • 3. Agreements with regard to changes in capacity or production levels.

  • 4. Allocation, division or “rationalization” of markets or customers. These practices are similar in effect to price fixing and are treated accordingly in the law.

  • 5. Costs. However, there are exceptions which are discussed below.

  • 6. Product quality. However, there are exceptions, particularly in the context of establishing standards needed for interoperability and other legitimate purposes.

  • 7. Boycotts or agreements not to deal with competitors, customers or suppliers.

Meeting procedures

  • 1. Discussion of excluded subjects is not tolerated and, if it occurs, will be stopped immediately by counsel or staff present. leave immediately.

If it does not stop, all members should

  • 2. There should be a written agenda, prepared in advance, for all meetings, including committees and subcommittees. Agendas should be followed.

  • 3. Minutes should be prepared which accurately reflect the matters discussed and action taken.

  • 4. Counsel should examine agendas prior to meetings and should review all minutes in draft form.

  • 5. No informal or secret meetings should be held.

  • 6. Counsel and PPPC staff should be present at all meetings of members or groups of members and the board of directors.

  • 7. Presentations, which are reviewed in advance, by guest speakers and panelists must conform to these Guidelines.

Procedure at conferences

Procedure at conferences organized by PPPC is similar to that at meetings with the possible exception of minutes.

PPPC ANTITRUST COMPLIANCE GUIDELINES

September 2005

Statistical reports

Antitrust laws generally permit the exchange of statistics provided the exchange does not result in an anti-competitive effect. Data on current or future pricing plans, for example, should never be exchanged or published.

Statistics reflecting past costs paid by members, but not revealing individual members’ responses, may be collected and distributed to participants with the guidance of counsel.

Statistical reports issued by PPPC have been carefully designed in collaboration with antitrust counsel and are believed to be in conformity with the various principles in that regard which have been laid down in the case law and guidelines issued by antitrust authorities. The matter is kept constantly under review by PPPC staff and counsel.

Social events

Members’ representatives should avoid discussion of business matters outside formal meetings, including social events. PPPC may organize a social event on occasion. In such cases, the following guidelines and procedures will apply:

  • 1. Social gatherings organized by PPPC are limited to luncheons, dinners or receptions taking place immediately before or after a regular meeting or conference. Their purpose is purely social and not to discuss industry matters.

  • 2. At the end of a meeting or conference, prior to gathering for lunch, counsel present at the meeting again reminds those present that the same precautionary rules apply during lunch as at the meeting itself. At a dinner gathering prior to a meeting or conference, the reminder will be given at the commencement of the dinner.

  • 3. Counsel and staff members will be present at social events and, as in the case of regular meetings, will intervene immediately should conversation border on inappropriate subjects.

PPPC ANTITRUST COMPLIANCE GUIDELINES

September 2005