Publication
Generative AI: A global guide to key IP considerations
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Publication | 10月 2023
The commercial driver: There are various legitimate reasons a company may wish to discuss and share information with its channel partners. A common example is where a company needs to plan and support product promotions.
The risk: When a company towards the top of the supply chain (a manufacturer or importer) sells directly to consumers (including through an online store), and uses other channels (like bricks and mortar retailers), the company may actually compete with its channel partners, and each of its channel partners may compete with each other. Key competition law risks include cartel conduct and concerted practices (arising from the mismanaged exclusivity arrangements, coordination of promotions or simply the sharing of competitively sensitive information).
How to mitigate: We suggest implementing practical guidance and training for team members that deal with channel partners. This should include “hard” rules about what to avoid and “softer” guidelines covering how best to communicate and document dealings with channel partners in a way that furthers business outcomes without activating legal risks. For example, in some circumstances, it may be necessary to “ring fence” certain information received from channel partners in order to avoid problematic information flows and usage.
The commercial driver: Companies may wish to encourage the resale of their products by channel partners at prices that reflect the value of their brand, particularly for premium products.
The risk: Competition law prevents companies that supply products for re-supply from stopping channel partners discounting or incentivising them to price above a certain level.
How to mitigate: There are some structures under which pricing can be controlled. Agency, for example. However, in addition to resale price maintenance issues, horizontal price fixing considerations must also be taken into account, and much care must be taken at the pricing and promotion stages.
The commercial driver: With the economy slowing, opportunities may arise to acquire competitive or complementary businesses, or businesses whose operations would allow the acquirer to vertically integrate. This can be an attractive way to grow market share, increase efficiencies and/or reduce input costs.
The risk: Mergers and acquisitions that are likely to substantially lessen competition are prohibited. Engagement with the ACCC is generally advisable where the products or services supplied by the parties to a potential merger are substitutes or complements for one another, and the merged firm would have a market share of over 20% in any market. The ACCC review process usually takes around 6-12 weeks, but more complex cases may require up to 6 months.
The ACCC is focussed upon mergers that could reduce choice for consumers and put further pressures on the cost of living. There are numerous current assessments in digital offerings, groceries, banking and energy.
How to mitigate: Where there is a potential competition impact, seek expert competition law advice early so as to avoid the risk of regulatory clearance destabilising deal strategy and timelines.
The commercial driver: Businesses generally aim to minimise exposure and maximise flexibility under standard form contracts to put themselves in the optimal commercial position.
The risk: The prohibition against unfair contract terms in consumer and small business standard form contracts has been broadened, and large penalties will apply, from 9 November 2023. From that date, it will be illegal for standard form contracts to contain unfair terms, and for businesses to rely on them. Penalties will apply for each individual “unfair term”. The prohibitions also capture a much larger group of business than previously; business with up to 100 employees or less than $10 million turnover now count as “small”. This is all much more hard-line than the current position, where a term found to be “unfair” is simply deemed void and cannot be relied on.
The way to mitigate: Businesses should review all standard form contracts that it offers consumers or small businesses and obtain expert legal advice on contract terms. A view will need to be taken, based on available precedent and guidance materials, on whether certain terms are unfair, or whether they are protecting legitimate commercial interests. To create a compliance record, it will be important to ensure the outcomes of the review process, like the reasons for amending certain terms and not others, are recorded in a form that can be easily presented to the ACCC if needed.
The commercial driver: Due to the growing weight that consumers and other stakeholders are placing on environmental and sustainability, businesses want to continue to make, and are often seeking ways to increase the visibility or scale of, their claims in this space.
The risks: The risks are twofold – there is a risk under the Australian Consumer Law around “greenwashing” itself – the risk of making false or misleading representations about ESG characteristics or achievements. There is also a risk under competition law where companies seek to collaborate with their competitors in order to either achieve or measure ESG-related outcomes. The ACCC has established a dedicated taskforce to focus on this issue. Read our article here.
The way to mitigate: Businesses must ensure the impression created by ESG claims is aligned to facts and supported by evidence. For planned collaborations, expert advice should be sought early on structure and approach to pre-empt competition law concerns.
Publication
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Publication
Our Asia Competition Law facts sheets provide insights into the main competition law regimes across Asia, reflecting the experience and reach of our Asia competition team in an ever changing and increasingly complex competition law environment.
Publication
We are delighted to announce that Al Hounsell, Director of Strategic Innovation & Legal Design based in our Toronto office, has been named 'Innovative Leader of the Year' at the International Legal Technology Association (ILTA) Awards.
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