BEC: Fair trading compliance a must
The Fair Trading Commission (FTC) held its annual two-day compliance law and policy workshop on March 26 and 27 with Marian Bruno, deputy director, Bureau of Competition, United States Federal Trade Commission as the keynote presenter.
The insightful session not only highlighted the arduous task the staff of the FTC have in patrolling anti-competitive behaviour within Barbados, it also brought to the fore the important role all employers have in facilitating a culture of compliance.
The nuggets of knowledge shared over the course of the two days cannot be fully explored in today’s column, the aim, however, is to arouse the interest of the business community as it relates to their role in ensuring compliance.
The first question many may ask is: are business owners fully apprised of what may constitute anti-competitive behaviour and/or agreements? And if not, are they still culpable if/when caught engaging, for example, in price gouging or monopolistic behaviour?
The simple answer is yes; ignorance of the law is no excuse. The Fair Competition Act applies to both accidental and deliberate conduct, also noteworthy is that a business is responsible for the actions of its staff and agents.
How do you determine a breach has been committed? A practical example of a type of agreement which is likely to be anti-competitive is where two or more companies may agree orally or in writing to fix prices of a particular service or commodity. Consumers are therefore directly disadvantaged as such an agreement would restrict their choices and is prohibited under the act.
Other types of prohibited agreements and conduct include: bid rigging, re-sale price maintenance, price squeezing and market restriction. Business owners are urged to familiarise themselves with what kind of behaviour may amount to breaches under the act.
Even if the terms identified are unfamiliar, some course of conduct currently employed by your organisation could be in direct conflict with the provisions of the act. The FTC has published pamphlets which clearly outline the breaches; also available
on their website http://www.ftc.gov.bb/ is an overview of the act and many other useful considerations for employers.
Despite the rhetoric, encouragement to align business practices with the act may not be sufficient, hence the inclusion of what may be deemed the primary catalyst for compliance – penalties. These can be onerous and result in reputational damage to a company and/or individual.
Some of the fines include up to $150 000 for individuals and $500 000 or ten per cent of turnover for companies; liability for damages to individuals harmed by conduct, and imprisonment for up to six months.
Beyond gaining and understanding the necessary theoretical information, it is important for organisations and business owners to take proactive steps in preventing anti-competitive behaviour. The size and nature of specific businesses will be major determinants in the type of programmes chosen, nonetheless employing a mechanism to assist in each of the following areas should be considered:
Develop a compliance programme – most commonly promulgated is the implementation of a compliance programme/policy, an in-house checking system designed to ensure that businesses and their staff do not breach the Fair Competition Act.
Referencing paraphernalia obtained from the commission, it was noted that communicating the importance of compliance with the aforementioned act to all staff members, as well as building an ethical culture, will contribute immensely to any compliance programme. This should include ongoing educational programmes and the imposition of disciplinary measures where breaches occur.
Assess risk areas of your business: referencing the commission’s material once more, it was noted that agreements and practices should be continuously assessed to determine the risk areas for individuals and business. Both steps will necessitate buy-in from management, as well as staff members, to ensure the continuous success and, as noted by the commission, adequate financial and technical resources must be provided for compliance to be successful.
Part of our mandate at the Barbados Employers’ Confederation is to ensure members as well as other employers are making sound legal choices and this is not strictly within the ambit of labour legislation.
We realise we too, have a fundamental role to play in keeping our members informed and, where possible, liaising with our strategic partners – hence today’s topic.
By no means do we wish to promulgate that the confederation employs specialists in the area of compliance law, as such we urge consumers and business owners to contact the FTC or the Office of Public Counsel should they have any queries regarding fair trading practices.
Brittany Brathwaite, Labour management advisor with the Barbados Employers’ Confederation.