Companies may collude to prevent corruption


There are times when competitors can cooperate to further the greater good of the entire industry.

Lobbying is a good example of productive cooperation. In some industries, companies essentially agree to provide private market data to a central entity that collates and provides valuable statistics about the entire industry.

But Is there any way for the private sector to essentially collude in a way to help all stay out of trouble when it comes to the Foreign Corrupt Practices Act (FCPA)? An essay in Corporate Counsel makes the case.

"One of the best but also most controversial ways to achieve greater transparency is to make information available through collective-action efforts. Companies have long been wary of collaboration on any front, even when an issue—like compliance—lends itself to cooperation so neatly. Antitrust is one of the first issues invariably raised. But collective compliance action need not involve collusive price-fixing, price discrimination, or other anticompetitive practices. Collective action to increase transparency involves a pooling of resources for the purpose of inclusive, not exclusive, dissemination of information. Information analysis, risk assessment, and how to act upon information collectively obtained and disseminated remains an individual corporate decision."

This might not represent a huge leap in terms of current activities.

The essay also notes that, "Most companies work with third parties that also represent other companies. Companies invest a great deal in building these crucial networks, and they fear the loss of competitive, proprietary information. When approached rationally, however, collective action can help companies share a baseline of information without sacrificing their proprietary information. A well-designed system allows entities to distribute key information, building confidence and trust between business partners, while keeping strategic information safely within the four walls of the corporation."

The key will be to systematize exactly what information will be provided and how. It sounds like a terrific activity for a trade group -- one that would really underscore its value.

For more:
- here's the essay

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