A group of sports broadcasters was fined millions of dollars earlier this year after they were found guilty of collusion in pay. Lucilia Falsarella Pereira, from the Competition and Markets Authority, explains why HR must understand the importance to remain independent when it comes competition law.
HR professionals help to shape the culture of a company, ensure that things run smoothly and enforce the rules.
Legal advice is often given by those who are most experienced and can be translated into practical, clear steps that the business can take.
It’s crucial that HR is kept in the loop so businesses can stay within the law.
Recent investigation by the Competition and Markets Authority into the pay of independent contractors working on sports events like football matches and rugby tournaments, in the production and broadcasting industries shows that there is still work to be done for businesses in understanding competition law.
We are working closely with companies to help them achieve this goal.
In this investigation we found that five companies – Sky, BT IMG ITV and BBC – colluded to fix rates for freelancers such as camera operators and sound techs.
Sky was spared the fine because it cooperated with our leniency policies and blew the whistle.
This case serves as a reminder to HR teams that employees should be cautious about sharing information with competitors. Bottom line: Staff must know the rules and follow them.
What went wrong?
We found 15 instances where companies from different firms exchanged sensitive pay information, including day rates and special rate, during holidays.
In an email between two companies discussing the pay of production workers, one stated “that is exactly what we pay.” It’s good to know that we are on the same page.
A second message stated that “we do not intend to get into a bid war, but we want to benchmark rates and be in alignment.”
The freelancer may be paid less for this type of behavior.
Even if the conversations are informal and well-intentioned they are illegal if competitors discuss or coordinate pay.
What you can do to prevent this from happening in your business
This case is relevant to anyone who has a role in setting salaries, such as those involved with recruiting and retaining staff. What you should know is:
1. The pay must be determined independently. It is illegal to discuss the amount you plan to pay with your competitors.
This is a good reminder for HR teams to be cautious about the information that they share.
HR must make sure that all decisions about pay are taken independently, and not based on discussions with competitors.
2. Everyone involved in setting salaries should be familiar with the basic principles of competition law. It’s easy to stop and reflect on what you say when you talk with competitors. Here are some useful tips on avoiding anti-competitive behavior , adhering to competition law and understanding the business cartel .
3. It’s crucial that your staff are confident and know how to speak out in the event of a problem. This can help prevent or de-escalate some of the problems we face.
4. Cooperation can lead to reduced fines if your organization discovers that it has violated the competition laws. Sky was able to avoid a fine in this case by reporting the cartel.
What’s next?
We will soon be releasing more guidance on labour markets and competition law.
HR professionals can use this time to update their training materials, review internal hiring practices and make sure that all those involved understand the rules.
It will help businesses to compete in a fair manner and remain on the right side the law.
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