The second ingredient for a successful competition law compliance program: Assessing Compliance Risks

July 27, 2017 - Tags: Regulations

This guest blog post is provided by the Competition Bureau, an independent law enforcement agency that ensures Canadian businesses and consumers prosper in a competitive and innovative marketplace. Headed by the Commissioner of Competition, the Bureau is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act and the Precious Metals Marking Act.

When preparing a recipe, having the right ingredients is important to ensure success.

In April, we presented Our Best Recipe for Competition Law Compliance Programs and followed-up in May by providing details on The first ingredient for a successful competition law compliance program: Management Buy-in and Support. Today, we will explore another essential ingredient: assessing compliance risks.  

Assessing your compliance risk requires that you reflect upon the business activities your company is engaged in that could put it at risk of violating the law. A good compliance strategy will focus on these risks, forcing you to plan for the unplanned!

Every business should assess its potential compliance risks, which will vary depending on its size and the nature of its industry. Just like a four-star rated restaurant and a fast food restaurant do not have the same menu, your company and the one next door should not have the same compliance program. Tailoring your program will ensure its effectiveness and help address your specific needs.

One approach to identifying risks is to determine the roles and functions within your organization that are most prone to potential anticompetitive business conduct.  Employees who are likely to interact with competitors, such as those in sales and marketing roles, or those who participate in trade associations activities, are at a higher risk of engaging in cartel activities than those in manufacturing positions. Additionally, everyone involved in promoting the business' products and services will need guidance to ensure that all representations they make to the public follow the deceptive marketing practices provisions of the Competition Act.

While all employees should be aware of your compliance program, the measures taken should be tailored and proportionate to the level and type of risk an employee faces on the job. The risks your company is facing now might change over time. Your compliance risk assessment should be reviewed annually to reflect changes in your operating environment, much like a restaurant's menu might vary with the seasons!

These are only a few examples of risk factors. We encourage you to learn more by consulting the Corporate Compliance Programs bulletin available on our website.


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