The Competition Commission has published guidelines on the exchange of competitively sensitive information following requests from various stakeholders, including businesses and industry associations, for it to clarify what constitutes permissible and impermissible information exchange.

The guidelines detail the type of information exchange that may potentially be harmful to competition and when such exchange may enhance efficiencies. The guidelines also outline the commission’s general approach to determining whether information that is exchanged between firms that are competitors amounts to an exchange of competitively sensitive information in contravention of the Competition Act.

For firms that are competitors participating in trade associations and engaging with policymakers, or regulators who require the submission of competitively sensitive information, a general guidance is that the purpose or object for the information exchange must be clearly identified and stated by the trade association, policymakers or regulators.

Further, all information shared among competitors must be limited to what is relevant and necessary to achieve the object of the initiative or purpose for which the information is being collected and must carry the lowest risk.

Firms must not share and discuss individualised, competitively sensitive information with competitors, but can, discuss aggregated market trends, such as the historical aggregated national yearly industry demand or supply information, which does not identify individual firm information, the commission says in the guidelines.

As a general rule, firms providing competitively sensitive information to competitors about the future, such as their intentions regarding future conduct, or what they anticipate or expect regarding their competitors’ future conduct, is regarded as anticompetitive because it could constitute or facilitate a collusive understanding among firms, the commission explains.

Similarly, any exchange among competitors about their future prices is likely to be regarded by the commission as giving rise to an anticompetitive price-fixing agreement or concerted practice in contravention of the Act.

All competitively sensitive information shared among competitors must be aggregated at least nationally, must be historical and it should not be possible for competitors to identify firm-specific information.

For example, if only two firms participated in the exchange, each firm would be able to identify the other’s information. This may also be possible where the exchange involves more firms, and the market is highly concentrated, the commission points out.

"The commission strongly advises trade associations to appoint independent third parties to collect and collate the information.

"Government policymakers may obtain disaggregated competitively sensitive information directly from firms without harming competition, as long as government itself collates the information or appoints an independent third party to collate the information."

Additionally, once the information has been collated, adequate steps need to be taken to ensure the disaggregated information remains confidential and that it is not provided to competing firms. Market participants may only view the information if it is historical and in an aggregated format, the commission says.

"The commission hopes that the guidelines will assist stakeholders to differentiate between the exchange of information that is likely or unlikely to raise competition concerns," it states.