Procurement Professional is the official publication of CIPS Australasia

#90 - When does benchmarking become collusion?

05 Nov 2009

The Buyer was invited to a business breakfast at a major legal firm the other day. After the cold egg-on-muffin, the generous firm preached legal science for half an hour at their hapless clients.

But, latterly, an interesting question was raised, when does innocent benchmarking become less than innocent collusion and, ultimately, rather guilty anti-competitive behaviour?

Of course, it seems the rules are not 100% clear. They never are when lawyers want business. But two useful tests got suggested:

1. It is okay for organisations to compare best practices, benchmark processes, even prices. Buying clubs are also quite acceptable. But it seems to be not okay  to compare prices (and the line appears to be) when the people swapping information are competitors.

2. It is never okay if those  same price-swapping competitors threaten to collectively act together or withdraw their custom [boycott a supplier] unless a common favourable price is offered. That could well be anti-competitive behaviour or even a cartel.

Naturally this blog is not legal advice, and The Buyer strongly suggests that procurement professionals with any concerns contact their own lawyer, office know-all, barman and the ACCC  www.accc.gov.au  before acting on these clumsy half-informed opinions.....

The Buyer – Posted 5 November 2009

The views of THE BUYER are personal and are not necessarily those of Procurement Professional magazine, BTTB Marketing nor CIPS