Summary of Bristol-Myers Squibb Corporate Policy on
Fair Competition (BMS-CP-011)
Purpose
The purpose of this Policy is to set forth Bristol-Myers Squibb Company’s (BMS) highest level
principles and expectations regarding matters that may give rise to fair competition concerns
and to affirm our commitment to compliant behavior. For specific questions regarding fair
competition matters, employees should seek legal advice from the Legal Division.
Policy Statement
Laws governing fair competition are designed to maintain a competitive marketplace. It is the
policy of BMS to comply fully with all fair competition laws, sometimes called antitrust,
monopoly, fair trade or cartel laws. Every employee, no matter what position he or she holds in
BMS, is responsible for compliance with applicable fair competition laws and must abstain
from actions that might violate these laws.
Agreements and Discussions among Competitors
Under the fair competition laws, competitors cannot agree on conduct that will limit
rivalry among them in important areas of competition such as marketing, pricing,
output, introduction of new methods of business or innovation.
It is usually illegal and often considered criminal conduct under these laws for
competitors to agree, directly or indirectly, on the following subjects:
prices to charge for or margins on products;
prices to pay for products or services;
terms and conditions of sale or purchase of products or services;
discounts for products;
royalties, fees or other terms and conditions of licenses;
salaries, wages, benefits or other terms of employment;
customers to whom products are sold;
territories in which to sell products;
product types, product lines or amounts that companies can produce or sell or
the use of particular technologies;
• advertising or promotion of products; or
• matters related to competitive bids.
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Because these practices are illegal in the U.S. and many other countries, and can and do
lead to jail sentences, fines, large damage awards and severe collateral consequences,
employees should not discuss such matters with competitors or participate in, or
attend, any meeting where such matters are discussed by competitors. Employees
should be aware that improper communications with competitors can occur in many
forums, whether inside or outside the office, whether written, oral or electronic, and
whether in a business or social setting.
Other Conduct
Other business practices, under certain circumstances, may also violate fair competition
laws. Any practices that could be characterized as falling within any of the following
categories should not be engaged in without first discussing the implications with Legal
Division Counsel:
Predatory practices and monopolization;
Tying arrangements, bundling, and reciprocity;
Restrictions on company distributors;
Discrimination in pricing or promotions;
Boycotts;
Restrictions on dealing in goods of a competitor;
Trade association activities; or
• Certain other areas of concern set forth in Section 3.2.8 below.
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Predatory Practices and Monopolization
It is illegal for a company to monopolize a market or to attempt or conspire to
monopolize a market through means other than development of superior products or
operations that are more efficient.
BMS employees should avoid conduct that could be deemed predatory or exclusionary.
Predatory or exclusionary conduct generally means taking action that the company
probably would not have otherwise taken specifically to harm an individual competitor
or exclude it from an important segment of a market. Examples include pricing below
cost to drive out less well-financed competitors or obtaining exclusionary rights such as
patents or governmental licenses by fraudulent means. BMS business decisions and
marketing practices should be designed to increase its sales and profits and with the
intent not to harm others’ sales or profits.
Tying Arrangements, Bundling and Reciprocity
Tying arrangements exist when sales of one product are conditioned on purchases of
other products. Bundling involves selling a group of products at a price below the
combined prices of each individual product. Bundling is usually allowed when each of
the products is available for purchase separately if the cost differential is reasonable.
Requiring reciprocity from customers or suppliers is analogous to tying and may raise
fair competition questions. Purchases and sales should be evaluated independently and
made or not made on their own merits.
The law in this area is complex to apply. Legal Division Counsel must be consulted in
advance regarding any particular arrangement which could be viewed as involving tying,
bundling or reciprocity.
Restrictions on Company Distributors
Under the laws of the U.S. and other jurisdictions, BMS may not establish the minimum
price that a distributor must charge for BMS products. BMS may place some restrictions
on the territory in which the distributor does business or the customers to whom a
distributor may sell BMS products, provided such restrictions are reasonable in light of
competition from other products.
Restrictions on distributors are treated somewhat differently in different parts of the
world. Before imposing any such restrictions on a distributor, Legal Division Counsel
must be consulted.
Discrimination in Pricing and Promotion
Fair competition laws may prohibit the company from selling the same product at
different prices to different competitors when the price differential might adversely
affect competition. In general, all similarly situated customers should be treated equally.
Similarly, laws of the U.S. and other jurisdictions require that advertising and
promotional allowances generally be offered on a proportionately equal basis to all
customers. These allowances and services are subject to detailed regulations.
There are exceptions to these rules. The company’s standard pricing and promotional
practices, and any deviations from them, must be cleared in advance with Legal Division
Counsel.
Boycotts
BMS has the right to decide unilaterally to whom it will sell its products and from whom
it will purchase supplies or other goods or services. Fair competition concerns, however,
may arise when two or more companies agree to avoid business with a third company.
Employees should not discuss with others with whom the company will or will not do
business and should not attempt to persuade another company to deny its business to
others.
Restrictions on Dealing in Goods of a Competitor
Requiring a customer not to deal in the products of one of BMS competitors can be a
violation of fair competition. Therefore, employees should not condition sales of BMS
products on a customer's refusal to deal with other suppliers. Similarly, requiring a
supplier not to sell to a competitor of BMS can also violate these laws. Certain
exceptions to these rules exist, and each separate set of circumstances must first be
reviewed with Legal Division Counsel.
Trade Association Activities
Activities undertaken through a trade association or in connection with a trade
association meeting are not exempt from any of the fair competition laws. In fact,
activities at trade association meetings often are cited in allegations of a conspiracy in
criminal or civil U.S. antitrust proceedings. Consequently, employees should join a trade
association only with the prior approval of Legal Division Counsel. Trade association
meetings should be attended only when BMS business will benefit and only when the
trade association has counsel in attendance, unless prior clearance with Legal Division
Counsel has been obtained. Employees must be aware of the legal pitfalls involved in
trade association programs and must conduct themselves accordingly, including being
prepared to announce that one will not engage in certain conduct, leaving a meeting,
ceasing a telephone call, refusing to respond to a fax or e-mail or resigning from a trade
association. Legal Division Counsel must be informed immediately of any questionable
activities, discussions or proposals.
Certain Other Areas of Concern
The following activities can also raise fair competition questions and must be reviewed
with Legal Division Counsel before being undertaken: ending a longstanding business
relationship, for example, with long-term BMS distributors; acquiring or divesting
patents or licenses; joint or team bidding, or any joint venture or co-marketing
arrangement; acquiring any company, product or group of assets; beginning or settling
legal action such as a patent infringement suit against other companies or individuals; or
comparison of proprietary information with competitors, benchmarking against
competitors, or competitive intelligence.
Fair Competition Laws of Other Countries
It is the policy of BMS to comply fully with fair competition laws wherever BMS does
business. Over 100 countries now have laws concerning fair competition. Nearly all of
the practices prohibited under U.S. antitrust laws are also prohibited under the fair
competition laws of Japan, the European Union and other countries. Any questions in
this area should be addressed to Legal Division Counsel.
Definitions
Employee: Includes all employees and executive officers of BMS, its divisions and subsidiaries
Publication Date: January 2007