Perhaps one of the most controversial aspects of EU competition law is the very broad interpretation of the notion of concerted practices to include exchanges of certain information among competitors. In certain circumstances, communication of strategic information among competitors will be considered as an agreement or a concerted practice that has the object of fixing prices or quantities. This even applies where the information is provided unprompted. According to the European Commission’s Guidelines on horizontal cooperation agreements, “when one undertaking alone reveals to its competitors strategic information concerning its future commercial policy, that reduces strategic uncertainty as to the future operation of the market for all the competitors involved and increases the risk of limiting competition and of collusive behaviour.” This explains why such types of information exchanges will normally be considered and fined as cartels under EU competition law.
This very stringent interpretation has led to the application of many fines in Europe on Asian companies which had engaged in information sharing. Until recently, it was unclear whether competition authorities in East Asia would follow a similarly broad interpretation.
In Singapore, the wording of the Competition Commission’s Guidelines on the section 34 prohibition may have indicated that a more effects-based approach would be adopted. However the Competition Commission’s decision fining employment agencies in September of last year very much reflected the broad interpretation under EU law. This month the Commission confirmed this stringent approach when it announced its intention to fine ferry operators for having exchanged sensitive and confidential price information
Korea’s Fair Trade Commission seems to be willing to follow suit. In a decision adopted this month, it imposed significant fines on instant noodle producers for having exchanged information about future price increases. In China, there have to our knowledge not yet been any decisions on the point, but the National Development and Reform Commission’s Regulation on Monopolistic Pricing Practices indicates that the exchange of information about pricing intentions may lead to the establishment of an illegal concerted practice in breach of the Antimonopoly Law.
If this trend is confirmed, companies active in the region may have to reconsider their business practices as risks associated with information exchanges will no longer be a risk specific to the EU.