COMPETITION LAW Express Network Forum -- Hammersmith 16 June 2009

COMPETITION LAW This presentation is for information purposes only and does not in any way indicate legal advice. Neither Rentokil Initial 1927 plc, its subsidiaries nor any person involved in the preparation of this presentation shall be responsible for : (1)the truth of any information contained here, omitted from it or referenced by it (2)any persons reliance on any such information, whether or not the information is correct, current or complete and (3)any consequences that arise from any action of omission taken in relation to the information contained or referenced in this presentation.

COMPETITION LAW Will Roger Federer and Andy Murray agree to get the Wimbledon final over as quickly as possible this year so that they can go to the pub early and share the prize money 50:50? How would you feel if they did this when you had paid handsomely to go to the match?

COMPETITION LAW Competition law aims to provide a business environment where there is fair and free competition so that consumers are not prejudiced by distortions arising from unfair practices, such as price fixing and bid rigging, cartels and companies exercising a “dominant position”

COMPETITION LAW Trade Association meetings (like this one) are a prime area of concern, …….particularly when booze loosens tongues! Competition authorities are very suspicious of meetings like this. Some organisations do not allow managers to stay overnight after Trade Association meetings.

COMPETITION LAW Regulators look at the effects of a company’s conduct on the market and consumers when assessing whether something maybe anti-competitive and unlawful.

COMPETITION LAW Yeah, yeah, yeah, another bloody lawyer trying to make his pet subject sound more interesting than it is, just like those jobsworths in HR and H&S who try to make believe that the crap they talk is “commercial”. Why should I listen to this idiot?

COMPETITION LAW Penalties 1)Fines up to 10% of businesses turnover if only acting in one country. (e.g. France) 2)More than one country in EU – up to 10% of the group company’s worldwide turnover. 3)Any action in the USA can lead to triple damages e.g. 3 x what the damage actually is 4)Invalidity of contracts/inability to bid for govt work 5)Adverse publicity 6)Internal and external costs 7)Prison (e.g. Japan up to 10y (with work) plus Y3m fine)

COMPETITION LAW For the CEOs amongst you who are thinking, “well I negotiated a good exit deal when I joined, so I’ll be all right”, Think again, check your contract!! Criminal liability is perpetual and remains personally with you. Do you like prison food?

COMPETITION LAW The levels of and increases in fines levied by the European Commission are enormous. In 2007 the commission collected more than €3.3 billion in cartel fines 80% increase on €1.8 billion in % increase on € 683 million in 2005 In 2008, there was a decline to € 2.3 billion, down € 1 billion on 2007.

COMPETITION LAW But… On 13 May 2009 Intel were fined for exploiting its dominant position to exclude AMD from the market. The fine was……

COMPETITION LAW 1.06 Billion Euros That would take the shine off anyone’s day

COMPETITION LAW British Airways fined £270m in 2007 by OFT/DoJ – on both sides of Atlantic! Cartel activity with Virgin and Korean Air re fuel surcharges – agreed amount Virgin were not fined at all – 100% leniency! Damages claims/class actions in USA Virgin got sued too

COMPETITION LAW What are we doing to do to protect ourselves? (i.e. What can I do now I’ve been roped into going to these bloody trade association meetings?)

COMPETITION LAW At TA meetings, don’t talk about commercial stuff ( like prices, moron )! Insist on Agendas and beware “AOB” Keep the Agendas and Minutes for at least 5 years Keep your wits about you (or at least remain conscious) at TA meetings Avoid “side meetings” - assume the worst If things start to “go off the rails” object and leave if necessary – and have it minuted

COMPETITION LAW If you have concerns about what has happened at a TA meeting, or any meeting with competitors, seek legal advice. You might be advised to grass up your mate to save yourself (as will he)! Have you got a competition law policy that your people are aware of?