Competition and Consumer Laws refer to a body of laws which are enacted by the government in order to prevent unfair competition among businesses, regulate corporate malpractices and protect the rights of the consumers. Competition and Consumer Laws are usually enacted by government agencies and deal with a number of inter-related issues. The so-called 4 Step Process or Method is an approach developed in competition law compliance process. Competition law compliance ensures free and fair trade and at the same time helps companies to gain competitive advantage over others.
What are the benefits of competitive law compliance?
Firstly, competition law compliance helps companies to avoid the many adverse potential consequences of competition law infringement. Some of the adverse consequences of competitive law infringement are the following:
- Companies have to pay fine of 10 percent of the group turnover
- There can be adverse reputational impact on the company’s brand name. Directors can be disqualified
- Criminal convictions may be applicable to those involved in cartel
- Considerable wastage of management time and company’s money can occur
- Further lawsuits from those harmed can also lead to considerable damage.
Secondly, competition law compliance has many other positive benefits than the ones mentioned above. They are the following:
- Early detection of infringement can help companies to avoid financial penalties
- If financial penalty is already levied, competition law compliance can result in 10 percent reduction in the amount of financial penalty
- Companies realizing potential signs of non-compliance by other companies may take timely action in order to avoid being a victim of it
- An effective culture of competition law compliance is an essential part of ethical business culture.
There are several other benefits for small businesses as well:
- The 4 step method in competitive law compliance can help small businesses to achieve competiveness
- It helps small companies from cartels of big companies who impose unfair conditions on them.
Competition Law Compliance: A 4-step method
Competition law compliance can be achieved through a 4-step approach. It is a risk based approach which requires each company to follow a 4-step process to achieve an effective culture of compliance by assessing its own risk exposure and its internal business culture. According to the office of fair trade, UK, the 4-step approach is based on the following:
- Risk identification
- Risk assessment
- Risk management
Core commitment to compliance from top down: Before the 4-step method can be applied, the seniors of the board must show utmost commitment to competitive law compliance. Without this commitment, any competition law cannot be successful.
- Risk Identification
The first step involves identification of all the potential areas of risk. The nature of risk depends on a great extent on the nature and size of each business. The major types of business threats are: fixed prices, engaging in bid rigging, limit production, share customers or markets. In order to consider the potential risk areas, the following things should be kept in mind:
- Your customer is also your competitor
- Your staff attends trade and professional association functions with your competitors
- They leave your company to join that of your competitor
- Your employees seem to have commercially sensitive information that can be passed on to your competitors
- If your industry is relatively small where there are only a few companies, then people can move around such businesses never sticking to one
- You work with your partners. For instance, in a joint venture
- You trade in a market which has been subjected to cartel investigations.
These are some of the major risk factors which may be associated with your business. After you have made risk identification, the next step is to assess your risks.
- Risk assessment
Having identified the main areas of risk, the next important thing is to assess the levels of each risk. Risks can be divided into three levels:
- High risk: Some members of the staff are considered as high risks. They include senior managers, staff in the marketing and sales department and staff in purchasing and procurement roles. Other high risk groups include those involved in trade meetings, dealing with the competitors, responsible for price setting and new members of the staff joining the business form competitors.
- Medium risk: Medium risk groups include management roles which do not involve regular contact with the competitors or trading partners, back-end staff and non-high risk members joining from competitors
- Low risk: Manual labor staff, back office staff, HR staff and persons involved in clerical or administrative roles and front line retail staff.
- Risk Mitigation: The third step is risk mitigation. This involves suitable training activities in order to bring behavioral changes within the organization in order to achieve a culture of competition law compliance. For instance, if a business has identified a high risk of cartel activity resulting from staff frequently joining the sales and marketing divisions of the company then the staff should be given competition law compliance training as a part of their induction program.
- Risk Mitigation case study
An employee became concerned about the email exchanges involving her immediate manager were involved in cartel activities. She brought this to the notice of the company secretary who was responsible for bringing competition law compliance. The company secretary consulted external lawyers to investigate the matter who told her that there was a cause for concern. The company, with the help of external lawyers, got a leniency agreement with the relevant competition authorities and received immunity from the fines in the case that followed. The manager who was engaged in such cartel activities was dismissed from the service.
There must be a review process in store to ensure that the company is fully capable of adapting to the changes occurring inside and outside the company. For instance, a business may use auditing and other internal assessment methods of employees in order to review the process of competition law compliance.
Problems faced by students in case studies related to 4-step method of competitive law compliance
The analysis of the business with 4-step method of competitive law compliance requires in-depth knowledge about the companies and businesses. Further, it takes lot of time to present a well researched interpretation of a business situation. In other words, this is quite a time-consuming assignment for management graduates. Online assignments based on research topics require lot of time to analyze company’s financial profit, unique selling proposition and branding strategies in order to reach a conclusion. Students falter in the task and soon give up.
How MyAssignmenthelp.com can help students in their case studies?
We are online assignment help service providers having a team of writers who are experienced management professionals and are trained to complete case study assignments on time. The last minute assignments done by them are worth spending your money for. They are experienced writers who provide quality content which is plagiarism-free. The richness of matter in terms of subject is up to the client’s requirement. The case study assignments can be bought on nominal price to suit the pockets of students. It is easy to register on our site and order for the required services. So log on to our website and start ordering for case studies and other assignments today. We promise a marked academic improvement in your career.