Competition and Fair Dealing
"We are in favor of fair commercial competition from all players, within the framework of competition law."
Michelin Performance and Responsibility Charter (2002), Implementing our values, exercising our responsibilities
Definition
The principle of fair competition governs the behavior of a company in relation to its environment (customers, suppliers and competitors).
Fair competition contributes to the realization of collective interests: promoting better prices and services for consumers and encouraging innovation.
Fair competition is a principle recognized in many countries. The authorities ensure that it is respected through a legislative and regulatory system.
Anticompetitive behavior can expose the Group or its employees to heavy penalties: very heavy fines, lawsuits for compensation, damage to reputation. or even prison sentences. These sanctions are spreading internationally and are getting tougher.
Guiding Principles
The Group promotes respect for its employees, its customers and, in general, its environment. Fair competition is one of the practical applications of these principles.
To ensure employee adherence to competition rules, Michelin has implemented a compliance program. This system includes principles and action plans including regular training for the most exposed populations (sales and marketing). These employees are subject to permanent monitoring, in particular by the Legal Department.
The Group ensures the effectiveness of the principle of fair competition by excluding:
- All agreements, discussions and exchanges of information with its competitors on commercially sensitive information;
- Any abusive conditions with respect to its customers and suppliers;
- All actions likely to distort the free play of competition.
Respect for fair competition is everyone's business. Each employee must be exemplary in their interactions with external interlocutors.
Do: I must
- Adopt a respectful and fair behavior towards our customers and our suppliers.
- Exclude all contact with competitors (apart from discussions within a structured framework such as professional associations and acquisition projects).
- Respect confidentiality obligations.
- Adopt a behavior towards customers that is adapted to the Group's position in its market (a high market share has a greater impact on Michelin's responsibility).
- Exclude any punitive measure (sanction, boycott) in the event of unsatisfactory trade negotiations.
Don't: I must not
- Set prices or exchange sensitive business data with competitors.
- Share markets (products, services or territory) with competitors.
- Impose resale prices on customers.
- Engage in bid-rigging.
- Facilitate an agreement or a discussion on prices between customers (e.g. distributors).
Practical case 1
A distributor customer (A) wishes to discuss the price level of passenger car tires on the market. A complains about the aggressive pricing policy of a competing distributor (B) who is also a customer of Michelin. A asks you to intervene with B to increase its prices, so as to ensure higher margins. Is this type of proposal acceptable?
No. If you accept the request (ask B to increase its prices), the Group will be in breach because it will be considered as the "facilitator" of a cartel (jointly fixing the sale price). You must therefore explain to the distributor that you cannot interfere with the pricing policy of customers, who are free to set their prices.
Practical case 2
You represent Michelin in a professional association and participate in meetings on topics of general interest to the industry. These meetings are supervised, and you never bring up commercially sensitive topics (price, volumes, costs, etc.). A member of the association from a competing company invites you to have a drink with a few other members/competitors. He wants to know you better because you do the same job and have common interests. Should you accept?
No. You must decline the proposal and avoid any discussion, even informal, with competitors. If the exchange results in a commercial agreement, simple participation in this type of meeting may lead to a sanction (including fines) from the authorities.
