Why is this a risk?
Anti-competitive behaviour is typically banned by various governments under trade practices, competition laws or antitrust legislation. These laws effectively prohibit companies from getting together and agreeing to set prices (typically higher ones) for customers to pay. They also prohibit companies with similar products from getting together and agreeing to service certain customers in certain markets and not others, effectively sharing the market among themselves.
Example of where this risk could affect you:
- Your supplier is likely to be in a narrow market where prices are commoditised, or where there is a duopoly
- Suppliers within a niche market might be engaged in price fixing, bid rigging or sharing of information
What sort of suppliers could be engaged in this risk area?
- Any supplier might be engaged in price fixing or collusion, but it is likely to be detected through companies that have similar pricing or where there are sole bidders in markets where there should be multiple bidders
- Suppliers with very few competitors
How are these risks managed?
The risk of anti-competitive behaviour is normally managed through:
- understanding your suppliers' businesses, the services that they supply to you and what they charge other customers
- independently validating the marketplace.
Which systems and tools do we provide as part of the Supplier Ecosystem™ Initiative to manage these risks?
IntegraCheck® | Integrity Due Diligence