What is the ethical issue?

Operating in a free and open market means that organisational success will be driven by efficiency, innovation and customer service. Relationships with competitors, though regulated by law (such as competition or anti-trust laws) still have elements of ethical controversy.

Competition law is designed to uphold fair play in business. For instance, it stops companies with a strong position in a market, such as those with a monopoly, from abusing their position or making anti-competitive agreements, like cartels.

However, there are some regulatory grey areas, such as the gathering of competitive intelligence. The boundary as to what is considered an ethical approach can differ depending on sector or regional regulations.

IBE Guidance

A summary of good practice

An ethical organisation will commit to behaving openly and fairly when competing for customers' business and when placing business with suppliers or offset partners. They will not make false claims or remarks that unfairly disparage competitors, or improperly interfere with a competitor's business relationships.

However, there may be ethical challenges when it comes to competitive intelligence gathering, for example, accidental exposure to intelligence through employees, or other stakeholders, or from research or surveillance.

Good practice would suggest:

• Clear guidelines for relationships with competitors is included in the code of ethics
• Establishment of a competitive intelligence policy 
• Extend these guidelines to business partners
• Ensure training and assistance with decision-making to support all workers on this issue, and what to do
• Facilitate regular cross-functional reviews of Competitive Intelligence (CI) practice across management

Further resources