Opinion:  No good turn goes unpunished. According to media reports, a British Airways executive tipped off a counterpart in Virgin Atlantic that BA was going to introduce a fuel surcharge. Virgin took the precautionary step of informing the competition authorities and in doing so bought itself immunity from fines.

The huge drop in the BA share price in just a few hours and the talk of prison sentences for executives are stark reminders of the potency and significance of competition law. It is a wake-up call for executives everywhere, whatever their line of business.

This is especially so for Irish-based executives since Irish competition law carries tougher penalties than the UK. The Irish Competition Authority conducted 42 dawn raids in 2005 and the Irish courts have already imposed sentences for cartel behaviour - for example, in the recent oil distributors case in the west of Ireland.

It is a worrying time for BA and the other airlines being investigated, with executives on leave of absence, investigations on both sides of the Atlantic, the need to assuage investors' concern over the falling share price, and possible multimillion-euro fines. And all this on top of trying to reassure passengers that they are paying a fair price.

What are the competition law issues facing the airline or any company in such circumstances? What type of steps should executives of Irish companies now take if faced with getting a tip-off from a counterpart?

Clearly, senior executives must remind staff of the dangers of contact with competitors. Even being seen with competitors can spark complaints to the competition regulators. Sample fines imposed by the EU Commission for cartels recently have been in the hundreds of millions and, after Wednesday's announcement of new guidelines on fines, could potentially reach billions.

The odd scrap of market intelligence or the temporary quiet life brought about by reaching an "understanding" with a competitor is simply not worth those penalties.

Executives and staff need to remind themselves that fines can be enormous and prison sentences imposed for cartel behaviour are a reality and can be long.

Most executives caught for cartel behaviour do not feel that they have committed a crime. In fact, they might mistakenly believe they were acting in the interests of their employer. Needless to say, that is no defence in a court of law. Anyone operating internationally faces potential sanctions from the laws of the 110 countries with competition laws.

In the airlines case, the US and British jurisdictions are probably the most troubling, particularly the US because of the long jail sentences imposed and the willingness of British courts to extradite suspects to the US. This has resonance for Irish-based executives of companies that are either US-owned or trade with the US.

As well as providing clear and appropriate competition guidelines for staff, companies should also have a dawn raid procedure in place irrespective of whether or not they could be in breach. The unannounced arrival of a dozen or so dawn-raiders at a company's offices or even an executive's home no doubt causes extreme anxiety, even among the innocent. Sometimes, the competition authority executives may only be looking for evidence about others, but every organisation should have a procedure and drill in place.

What level of exposure would the airlines be facing if they were engaged in anti-competitive behaviour?

BA passengers may be able to sue the airline for damages (and cases have already been filed in the US) if it is proven that they have paid too much for their tickets and the increased price was due to anti-competitive behaviour. These so-called "follow-on" or "piggy back" actions are positively encouraged by the EU and are heard regularly by the US courts. If it transpires that a cartel was operating, the maximum fine for BA could, in theory, be €1.27 billion, representing 10 per cent of turnover. In practice, the maximum is not usually imposed, but even half that would be a significant blow to BA.

These issues are not just confined to the airline industry - the law applies to every sector.

Executives cannot ignore the rules or regard them as being relevant only to others. They must instead prepare for possible dawn raids and investigations.

Or better still, advise their staff to be ultra-cautious about contacts with competitors, particularly through trade associations, because such contact (however innocent) may be sufficient to start a process that could last several years, exposing the company and the executives to invasive investigations and harsh penalties.

Dr Vincent Power is head of EU & Competition Law at A&L Goodbody and advises businesses internationally on competition, cartel and EU issues. vpower@algoodbody.ie