Competition and antitrust

After we’d put the bid in, we all decided to go for a meal. It wasn’t an expensive place, but because the two of them were working for the business partners involved in bid and the three of us were from Serco, we decided we each pay our own bill. 

I remember that the mood was very cheerful. All of us were pretty sure we were going to win the contract. We drank a bit and got to talking about the critical factors that lead to wins. 

Most of us said things like ‘Preparation’ and ‘Showing you can be trusted’. It was then that one of our business partners said, ‘The key to winning is Intel.’ 

I wasn’t sure what he meant so I asked him.

He looked at me as if I was still at school. ‘Everyone is in this to win,’ he said. ‘So you need to find what the competition is offering, and make sure your offer is better.’

‘But how are you going to do that? They’re not exactly going to tell you, are they?’ 

‘There’s always someone willing to tell you if you offer them enough,’ he said.

I was genuinely shocked. ‘Is that what you’ve done on this bid?’ I asked him.

‘And what would you do if I had?’ 

I told him that if he had he would have put my company at serious risk of breaking very strict anti-trust laws and involving us in a great deal of trouble, and I would go straight back to the office and report what he’d done. 

He looked at me and smiled. ‘Then just as well I’m not going to tell you, isn’t it?’ 

It was a very tense moment, and soon after we paid up and left. 

When I got back home, I phoned one of my colleagues who’d been at the meal.

‘That was awkward, wasn’t it?’ he said. 

‘Yes. What do you think I should do? Report what happened?’

‘Of course not! You don’t want to risk losing the contract, do you? Anyway, we don’t know for sure that he did anything illegal.’

‘No,’ I said. ‘But we do have suspicions.

I was awake all night. But by morning I’d made my decision. If he has done what he intimated, then that’s not who we and it’s not how we win business. So I reported it.

After investigating the matter it was confirmed that the individual had acted unlawfully, and what’s more he’d used his company’s funds to buy what he called the ‘Intel’. 

He was fired.

To be honest I thought that would mean we’d lose the business, especially when the decision was made to tell the customer what had happened. But in this case it had the opposite effect. Their CEO actually wrote to me. It was a very short note, and it simply said, ‘Now we know we can trust you.’

We always compete openly, fairly and honestly.

We’ve got a real opportunity here. We’re only up against one other company – we put them out of business, then we control what happens from that moment on. 

So here’s the plan: we find out their pricing system, and offer significantly below that. Yes, we’ll take a hit for a short while. But we happen to know that they have cash flow issues, so they won’t be able to last long. 

Once they’re out of the way, then we have a clear run and we’ll be able to put the price points at whatever level we want.

Now that’s what I call good business. 

No, that’s what you call unfair business and it breaks the law!!!

It’s important for everyone – businesses and consumers – that there’s fair competition so no company has an unequal advantage over another, and cannot abuse its position to control prices, or win contracts unfairly.

Most countries have competition or antitrust laws that specifically prohibit abuses of dominant market positions.

I’d only been in the job for six months when it happened. 

We got a call from one of our business partners who was sometimes also a competitor. They were suggesting an informal meeting at a place downtown and my boss asked me to come with him.

I knew that we had to be careful in situations like this in case ‘partner’ and ‘competitor’ got confused. 

Anyway, we got to this hotel, were introduced to a man called Michael in the lobby area and went over to one of the discrete banquette seating areas. 

It turned out Michael wanted to talk about a big new public healthcare opportunity that was opening up because of a recent change in government policy. 

The gist of what he was saying was this: we all knew how narrow the margins were in these kinds of deals, and unless we could push the government to pay more, then as service providers we just wouldn’t be able offer the levels of care that service users so clearly needed. ‘This is our one opportunity to change that!’ Michael insisted.

He was very convincing and even passionate about what he described as ‘a marker of the respect and care a society gives to the vulnerable’. And I remember listening to him and thinking that I really agreed with this man.

There was a bit more talk. And then my boss said, ‘So how do you suggest we go about this? Should we both lobby the government?’ 

‘We both know that wouldn’t work,’ Michael said. 

‘Then what are you suggesting?’

‘That as the only two big players the government is going to consider, we both informally share the details of our proposed costs with each other and come to an agreement around what level we both need to go in at to ensure we can provide users with what they need.’

Then he held up his hand and talked straight to my boss. ‘Andy, I know what you’re going to say – that it would be unethical and rigging things. But what are the real ethics here? Working with budgets we know are inadequate, or trying to get the best deal for the people we care for?’

And I thought, ‘Yes! That’s right!’ 

My boss looked at him a long while. Then he said, ‘Michael, you’ve brought us here to propose that together we break the law. My answer is, No! I absolutely will not do that. So I’m going to leave now and forget all about this conversation. However, if you’d like to get back to me to talk about a legal way forward, then perhaps we can talk again.’

And we got up and left.

In the cab back we were both silent for a while. Then my boss asked me who he thought was right – Michael or him. I didn’t know how to reply.

‘Okay, then let me put it this way. Would you rather act behind closed doors to deliberately and knowingly break the law, and risk destroying our reputation and our ability to provide service to the thousands of people who already rely on us?  Or would you rather work transparently so everyone can see that you are fighting to get a better deal for those who need it?’

We weren’t given that contract, but we did work hard to try to get the government to invest more. Whether it was us, or wider social pressures, in the end there was more investment. That was after my boss had died of cancer. By then we had become a preferred supplier to the government and were regularly consulted. 

I often wonder what he would have said to me if he’d still been alive. 

We never form an agreement with competitors or share information with them that might fix prices, rig bids, allocate customers and/or restrict supply.

I went to this meeting at a business partner’s premises. We were due to discuss how to tackle some supply chain issues. We had a good relationship, even though we sometimes competed against each other as well. 

Anyway, I was shown upstairs where they have a comfortable waiting area surrounded by offices and meeting rooms. There was a receptionist there and it was a hot day and so most of the doors were open.

As a result, I could hear a conversation three people were having. They were talking about how they were going to approach winning a contract, and I suddenly realised that it was the same contract Serco was going for. I looked up and the receptionist obviously heard it all too, because he raised his eyebrows at something they were saying. 

It was impossible for either of us not hear details that we clearly weren’t meant to hear. I thought about leaving, but before I could do that they came out of the meeting room. 

One of them recognised me and gave me a very suspicious look. Once again I thought about telling them what I’d heard, but it just seemed better to say nothing. 

I had the meeting and went back and told a colleague. ‘Ooh!’ he said, ‘come on then, tell us what they’re up to!’

I said I didn’t think I should say anything, but my colleague insisted that I hadn’t done anything wrong, that it was their own carelessness that had provided us with information, and we’d be crazy not to use it. 

So we did. We changed our draft proposal that day, and redid the figures. Then we submitted the bid – and we won it.

But now our business partner is saying we acted illegally and unethically. As I said, they’ve often been our competitor in the past, but this time our relationship has really been damaged. And in two days’ time I’ve got to give testimony in court and of course they’re going to ask me what I heard. 

If I say that I heard nothing the receptionist is going to say that isn’t true. And if they ask to look at the different drafts of the proposal, they’ll see that we changed things on the exact same day I went to their office. 

If that happens then it won’t just be our relationship with them that’s destroyed. They’ll call us out as cheats!

We conduct our business based on our own independent decisions so we do not use illicit information we may have acquired or know about to shape the business decisions we make.