Many companies these days take a closer look at their supply chains to ensure that their suppliers meet certain standards and adhere to internal corporate social responsibility (seeCSR”) policy, and the external environment, society, and governance (“ESG”) purpose or goal. This scrutiny is driven by increased regulation and increasing pressure from shareholders, consumers, employees and other stakeholders in business.
Companies looking for ways to ensure their supply chains are environmentally and socially ethical often wonder if they can make a difference on their own. Companies in specific industries have determined that joint initiatives are more effective in developing industry-wide standards, or that it is more efficient to work together to achieve these goals and objectives. may occur. However, such collaborations can pose antitrust risks, and many competition authorities have begun to increase scrutiny of these types of collaborations.
Companies seeking to participate in joint initiatives and projects to advance more sustainable and ethical supply chains recognize that certain conduct may create antitrust risks and may lead to anticompetitive conduct. you should be aware of that.
- ploy of cartel actionCompetitors must not engage in sustainability agreements or collaborations that restrict trade. To achieve a more sustainable and ethical supply chain, companies should fix prices, allocate markets, rig bids, and adjust production volumes for legitimate reasons that promote competition. You should not enter into any contract that restricts or restricts
- Information sharingExchanging sensitive business information with competitors to assess supply chain issues may raise antitrust concerns. Businesses must not engage in the exchange of commercially sensitive information such as prices, costs, production levels, business plans and employee wages. Certain information exchanges may foster collusion and hinder competition in that market.
- Conduct audits of supply chain vendors and share audit resultsSharing the results of supplier audits with competitors may raise antitrust concerns. This is because some business audits may contain commercially sensitive information. Competitor discussions regarding commercially sensitive information contained in audit results are prohibited, and concerted action based on these discussions may also raise antitrust concerns.
- Implementation of mandatory standardsAntitrust risks arise when we cooperate jointly on the implementation of standard or mandatory practices, indicators or codes. Businesses should not enter into agreements that set mandatory standards. All standards must be voluntary and not have the effect of crowding out competitors. Companies should always make their own decisions about whether and how to promote standards to address industry issues. Suppliers are free to decide whether to comply with or ignore these standards.
- Group boycott or refusal to tradeA company may not participate in a group boycott by refusing to engage with a particular supplier because it does not comply with certain metrics or standards. Companies should not make joint decisions to terminate relationships with suppliers, refuse to do business with them, or discriminate against suppliers who refuse to comply with voluntary standards.
When setting supplier standards or norms, especially when working with competitors to develop those standards, consult an attorney.
