Deposit return schemes: are consumers and industry ready?

Last updated: June 21 2022

Competition policy

The Competition Act - background

The main provisions of the Competition Act 1998 came into force on 1 March 2000.  European Community competition legislation has been influential in forming this legislation.  
 
Generally the Act outlaws any agreements and business practices that have a damaging effect on competition in the UK. It prohibits:
agreements by undertakings, decisions by associations of undertakings (such as trade associations), and concerted practices which prevent, restrict or distort competition, or are
The main provisions of the Competition Act 1998 came into force on 1 March 2000. European Community competition legislation has been influential in forming this legislation.

Generally the Act outlaws any agreements and business practices that have a damaging effect on competition in the UK. It prohibits:

agreements by undertakings, decisions by associations of undertakings (such as trade associations), and concerted practices which prevent, restrict or distort competition, or are intended to do so and may affect trade within the UK (know as the Chapter I prohibition), the abuse by one or more undertakings of a dominant position in a market, which may affect trade within the UK (known as a Chapter II prohibition).

The Act catches "informal understandings as well as formal agreements which have an appreciably anti-competitive effect." businesses, which break competition laws, may be in danger of being fined up to 10% of their UK turnover.

The involvement of an association of undertakings in an infringement of the Chapter I or Chapter II prohibitions could result in financial penalties being imposed on the association itself, its members, or both.

GS1 UK as a user association fits squarely into this category. It has therefore developed the following competition policy, which applies to all member and non-member participants in GS1 UK activities.

 

GS1 UK Competition Policy

Members and non-member participants must act with the highest regard for their ethical, legal and professional obligations and GS1 UK’s purpose, values, and legal interests. It is a pre-condition of participation in all GS1 UK meetings that member and non-member participants abide by this Competition Policy. The policy covers GS1 UK meetings held at GS1 UK premises, hosted externally, and virtual meetings (eg teleconferences).

GS1 UK Competition Policy

There are many positive aspects to user associations and information that can be shared between members can include:

  • Non-confidential information that is in the public domain.
  • Technical industry issues including standards and health and safety matters.
  • Non-strategic technical or scientific data that results in consumer benefits.
  • Industry public relations or lobbying initiatives; provided competitively sensitive information is not shared in the process, and advice has been taken if initiatives may exclude market operators.
  • Industry standards that increase product interoperability, compatibility or safety, provided advice has been taken on the development, transparency, accessibility and potential competitive impact of these standards.
  • Other member or user association specific data or information that is in the public domain.

Guiding Principles - What Information Cannot Be Shared

There are certain areas of sensitive commercial information that should never be discussed between our members, either formally or informally, intentionally or inadvertently, directly or indirectly through a third party. These include:

  • Current or future pricing, or matters affecting prices.
  • Company-specific sales information.
  • Company-specific cost information.
  • Salaries and wages, hiring practices or limitations on hiring a competitor’s employees.
  • Commercial planning or strategy information including geographic growth and business expansion or contraction plans.
  • Key contract terms, such as any matters relating to specific suppliers and customers that are significant to core drivers of market competition, such as key contract.

Member and Non-Member Conduct

  1. Attendees at GS1 UK meetings acknowledge that the underlying aim of GS1 UK activities is often to enhance the ability of organisations to compete more efficiently and effectively through the implementation of efficient supply chain practices based on GS1 standards and services.
  2. Participation in GS1 UK activities is voluntary and failure to participate shall not be used to penalise any company.
  3. There shall be no discussion at GS1 UK meetings of commercial terms, including:
  • Agreeing to fix purchase or selling prices or other trading conditions
  • Agreeing to limit or control production, markets, technical development or investment
  • Agreeing to share markets or supply sources
  • Agreeing to apply different trading conditions to equivalent transactions, thereby placing some parties at a competitive disadvantage
  • Agreeing to make contracts subject to unrelated conditions
  • Or any other subject which may be construed thus according to the philosophy of the Competition Act.

ALSO, ATTENDEES AT GS1 UK MEETINGS WHETHER MEMBERS OR NON-MEMBERS, MUST NEVER REACH ANY AGREEMENT OR UNDERSTANDING (INCLUDING TACITLY) WITH ANY OTHER MEMBER OR NON-MEMBER ON THE FOLLOWING:

  • Prices that members or non-members will announce or charge their customers.
  •  The timing or method of price increases.
  • Terms of sale or delivery that members or non-members will offer customers.
  • Allocating product or geographic markets in which members or non-members will sell/trade or not sell/trade.
  • Allocating customers to which members or non-members will sell or not sell.
  • Bids to any customers, including whether to bid or not to bid.
  • Production, capacity, or sales volumes.
  • Soliciting each other's employees or employee salaries and benefits

THESE TYPES OF AGREEMENTS (CARTEL AGREEMENTS) ARE AUTOMATICALLY ILLEGAL. THERE CAN BE NO JUSTIFICATION; THE AGREEMENT ITSELF IS UNLAWFUL.

  1. Attendees at GS1 UK meetings should not put themselves in a position where their own corporate or personal interests conflict with those of GS1 UK. If any item should arise wherein there is possible conflict of interest, the meeting attendee will say so promptly, and may, at the discretion of the chairman be asked to leave for that item.
  2. If a meeting or discussion covers subjects which are contrary to this competition policy, GS1 UK will terminate that meeting or discussion immediately. A meeting participant should invite GS1 UK to terminate a meeting if it is felt that the policy has been breached.
  3. The output of GS1 UK meetings have the status of recommendations which may be implemented by member and non-member companies as they see fit. Individual companies remain free to make independent, competitive decisions about implementation.

Conclusion

The potential for antitrust problems exists wherever competitors meet or associate in common activities.

GS1 UK Competition Policy has been established both to avoid breach of the law in this respect and to avoid any activity, which might give the appearance of illegality.

By signing up to the policy, attendees at GS1 UK meetings can minimise this risk and justifiably participate in the development of global standards and best industry practice

Every company participating in GS1 UK activities remains individually responsible for its compliance with competition law and the GS1 UK Competition Policy does not detract from that responsibility