Competition law issues for the professions



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2. Architecture

  • Australian Construction Law Newsletter, “TPC Study of the Professions – architects” (1993) 28 Australian Construction Law Newsletter 54.

  • Fels A, Regulation, Competition and the Professions (Industry Economics Conference, Melbourne, 13 July 2001) at 15, available from www.accc.gov.au

  • Nguyen-Hong D, Restrictions in Trade on Professional Services (staff research paper, Productivity Commission, Melbourne, 2000) available from http://www.pc.gov.au/__data/assets/pdf_file/0016/8080/rotips.pdf

  • Peck M, “Competition Policy and the Regulation of the Professions” (1999) 68 Australian Construction Law Newsletter 30

  • Productivity Commission, Review of Legislation Regulating the Architectural Profession (Productivity Commission Inquiry Report, Melbourne, 4 August 2000) available from http://www.pc.gov.au/inquiry/architects/docs/finalreport

  • Ragel K, National Approach Towards Uniform Regulation of Architects (Allens Arthur Robinson, 2004) available from http://www.aar.com.au/pubs/pdf/const/foconmar04.pdf

  • Regulation Review Unit, Review of Architects Regulation (Department of Industry, Technology and Resources (Victoria), Melbourne, 1989)

  • Spence M, Entry, Conduct and Regulation in Professional Markets: a working paper (Professional Organisations Committee, Toronto, 1978)

  • Trade Practices Commission, Architects: a study of the professions (TPC draft report, Canberra, 1992)

3. Others

  • Cseres K et al, Criminalisation of Competition Law Enforcement: Economic and Legal Implications for the EU member states (Edward Elgar Publishing, 2006)

  • Levenstein M and Salant S (eds) Cartels: Vols I and II (Edward Elgar Publishing, 2007)

  • Vazquez Albert D, “Competition Law and Professional Practice” (2005) 11 ILSA J Int'l & Comp L 555



1 Ogden Nash, “I Yield to My Learned Brother” (1935)

2 The New Shorter Oxford English Dictionary (Clarendon Press, Oxford, 1993, p 2368)

3 Albert, Competition Law and Professional Practice (2004-2005) 11 ILSA J. Int’l & Comp. L. 555 at 556

4 Friedson “Theory and the Professions” (1998) 64 Ind L J 423 (Friedson)

5 Friedson at 426

6 Hatfield, Legal Barristers to Innovation: The Growing Economic Cost of Professional Control over Corporate Legal Markets (2008), The Berkeley Electronic Press

7 Savage DA, “The Professions in Theory and History: The Case of Pharmacy” (1994) 23(2) Business and Economic History 129 (“Savage”).

8 Savage at 129. Interestingly see Savage’s alternative definition at 131, stating that “a profession is a network of strategic alliances across ownership boundaries among practitioners who share a core competence”.

9 Fels at 530. For details of these restrictions identified by the ACCC, see Part 2.2 of this research.

10 Savage at 129.

11 Savage at 129. For criticisms on neo-classical economic models generally and a suggestion that behavioural economics is a better alternative, see Gittins R, Dinner Address (Behavioural Economics and Public Policy: Roundtable Proceedings, Melbourne, 8-9 August 2007) available from http://www.pc.gov.au/__data/assets/pdf_file/0005/79250/behavioural-economics.pdf .

12 Savage at 132-136.

13 Savage at 136-137.

14 Savage at 130.

15 Constitution of Australian Council of Professions Inc., cl 1

16 Dr John Southwick, Can the professions survive under a national competition policy? (proceedings of a joint conference on competition law and the professions, Perth, April 1997), as cited at www.accc.gov.au .

17 Janes H, “Competition Policy: “Consequence of Restrictive Trade Practices and Price-Fixing Provisions for Medical Practitioners in Australia and New Zealand” (2006) 13(4) JLM 439 at 440-442 (“Janes”).

18 Janes at 443-444.

19 Pharmaceutical Society of Great Britain v Dickson [1967] 2 All ER 558 at 567, as cited in Janes at 441.

20 Fels A, “The Australian Experience Concerning Law and the Professions” in Atanasiu I and Ehlermann CD (eds), European Competition Law Annual 2004: the Relationship Between Competition Law and the (Liberal) Professions (Oxford, 2006) at 530 (“Fels”).

21 See Fels A, Regulation, Competition and the Professions (Industry Economics Conference, Melbourne, 13 July 2001). Available from www.accc.gov.au .

22 Brunt M, Economic Essays on Australian and New Zealand Competition Law (Kluwer Law International, Netherlands, 2003) at 24.

23 In essence this has the same idea behind it as, for example, Part XIB of the TPA which regulates the telecommunications industry. It is not directly relevant here. See Rebstock at 90.

24 Commerce Commission, The Commerce Act: Anti-Competitive Practices under Part II of the Commerce Act (Commerce Commission, New Zealand, 2002) at 5 (“Commerce Commission Publication”); Australian Competition and Consumer Commission, Summary of the Trade Practices Act 1974 (ACCC, Canberra, 2007) at 2-3.

25 Trade Practices Commission “Regulation of professional markets in Australia: issues for review”, December 1990, p 6

26 Trade Practices Commission “Study of the Professions – Final Report – July 1992: Accountancy”

27 Trade Practices Commission, “Study of the Professions – Final Report – September 1992: Architects”

28 Trade Practices Commission, “Study of the Professions – Final Report – March 1994: Legal

29 National Competition Policy – Report by the Independent Committee of Inquiry, August 1993, AGPS

30 Ibid, at p 135

31 Ibid, at p 135

32 Incidentally, the Hillmer report also urged the rapid progress towards mutual recognition of qualifications gained in any part of Australia, or in New Zealand, by all other parts of Australia and New Zealand

33 Commerce Commission “The Commerce Act and the Health Sector”, January 1998

34 See Dalziel.

35 Cf Commerce Act 1986 (NZ) s 3(1A) with Trade Practices Act 1974 (Cth) s 4E. See also Productivity Commission Report at 33.

36 See ss 44-45 of the Commerce Act and s 51 of the TPA. See also the exception, for joint ventures, to the deeming provisions for price-fixing in both Acts (s 31 of Commerce Act and s 45A of TPA). Both also have other price-fixing exceptions for joint buying and advertising (s 45A TPA and s 33 Commerce Act) and recommended prices s 46A of TPA and s 32 of Commerce Act). Note that the Commerce Act also has an exception for partnership arrangements (s 44). See Productivity Commission Report at 125

37 Productivity Commission Report at 29.

38 Productivity Commission Report at 29.

39 See eg Commerce Commission v Ophthalmological Society of NZ (2004) 10 TCLR 994.

40 Productivity Commission Report at 37.

41 Productivity Commission Report at 37-38.

42 Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au .

43 Nothing to this effect appears on the Commerce Commission’s website, at www.comcom.govt.nz . There also appears to be no equivalent body to the Australian Competition Council. See useful summaries at http://www.globalcompetitionforum.org/oceania.htm .

44 Pengilley at 2.

45 Note that other concerns include consumer protection issues; certain advertising and promotions, to name but a few. For the full list see Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au .

46 Martin J, Trade Practices and The Professions: the ACCC’s view on the future (Address to the Western Australian Branch of Professions Australia, Perth, 25 October 2005) at 6 (“Martin”).

47 Martin at 6.

48 Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au . See also publications such as Australian Competition and Consumer Commission, Info Kit for the Medical Profession (ACCC, Canberra, 2004) and Australian Competition and Consumer Commission, Fair treatment? Summary of the guide to the Trade Practices Act 1974 for the Advertising or Promotion of Medical and Health Services (ACCC, Canberra, 2000).

49 See eg Australian Competition and Consumer Commission, Review of Australian Specialist Medical Colleges (ACCC, Canberra, 2005) and Australian Competition and Consumer Commission, Report to Australian Senate on anti-competitive and other practices by health funds and providers in relation to private health funds (ACCC, Canberra, 2004-2005). All available at www.accc.gov.au .

50 See Commerce Commission, Briefing for Incoming Ministers (Commerce Commission, New Zealand, 2005) at 18-19 (“Commerce Commission Briefing”).

51 See eg Commerce Commission, Ophthalmological Society of New Zealand to pay $100,000 for breaching Commerce Act (media release, Commerce Commission, New Zealand, 30 June 2004).

52 US Federal Trade Commission and the US Department of Justice, Improving Health Care: a dose of competition (joint report, Washington, 2004) available from http://www.usdoj.gov/atr/public/health_care/204694.htm (“Health Sector Competition Study”).

53 Legal Services Consultative Panel, The Legal Profession: entry, retention and competition

(advice to the secretary of state, London, 2005) available at http://www.dca.gov.uk/atoj/lscp/lscp_advice18.htm#2 ; Centre of European Law and Politics, Conveyancing Services Market (CELP, University of Bremen, December 2007) available from http://ec.europa.eu/comm/competition/sectors/professional_services/studies/studies.html .



54 See eg Commission of the European Communities, Report on Competition in Professional Services (Commission of the European Communities, Brussels, 2004) available from http://ec.europa.eu/comm/competition/sectors/professional_services/reports/reports.html .

55 Competition Bureau, Self-regulated professions - Balancing competition and regulation (Competition Bureau, Canada, 2007) available from http://www.competitionbureau.gc.ca/epic/site/cbbc.nsf/en/02523e.html .

56 Nguyen-Hong D, Restrictions in Trade on Professional Services (staff research paper, Productivity Commission, Melbourne, 2000) (“Nguyen”) available from www.pc.gov.au .

57 Samuel G, Competition Law and Australia’s Construction and Infrastructure Industries (Speech to Engineers Australia Fellows Luncheon, Melbourne, 12 March 2004) at 3 (“Samuel”).

58 Janes, generally

59 Van Roy Y, Avoiding Liability under the Commerce Act – what can be learned from the Ophthalmologists’ case? (New Zealand Medical Association - New Zealand Medical Journal (Online), Christchurch, 2005) available at www.nzma.org.nz/journal/118-1211/1353 (“Van Roy”).

60 See Van Roy at 2. The contract of service exception appears in s 44(1)(f) of the Commerce Act.

61 See the definition of person in s 2 of the Commerce Act which includes an association; and s 90 which details liability of associations themselves. See Van Roy at 3.

62 See s 4 of the TPA, which defines “services” in almost identical terms to the Commerce Act and which also defines a “corporation” so as to include incorporated associations. See also s 84 of the TPA which states that a corporation (including an association as defined by s 2) can be liable for the actions of its directors, servants or agents. Individuals are also covered by the Competition Codes of the states and territories.

63 Janes at 440.

64 Commerce Commission Briefing at 18-19.

65 Australian Competition and Consumer Commission, Application of the Trade Practices Act to the Professions (ACCC, Canberra, 2008) at www.accc.gov.au .

66 These areas include disempowerment of consumers due to a lack of information; over-consumption of medical services by consumers leading to market distortion, regulatory measures and barriers to entry. For more see Janes at 442-443.

67 Janes at 440-441.

68 65 [2008] FCAFC 72

69 [2008] FCAFC 72 at [159]

70 [2008] FCAFC 72 at [26]-[29]

71 ]2008] FCAFC 72 at [165]

72 (1990) 169 CLR 594

73 Rebstock P, “Competition and the Role of the Commerce Commission” (Speech to the Aon Lunch, Chamber of Commerce, Wellington, 9 October 207) at [36]. Available at www.comcom.govt.nz, Australian Competition and Consumer Commission, Competition Issues in the Professions (ACCC, Canberra, 2008) at www.accc.gov.au

74 See Martin at 3-5; Janes at 454-461; Pengilley at 14-35.

75 For the background facts see [2007] FCA 1011 at [16]-[20]. For Mansfield J’s explanation of the relevant conduct see [2007] FCA 1011 at [37]-[64].

76 For full discussion of orders imposed see [2007] FCA 1011 at [65]-[89].

77 Griggs L, “Negotiated Penalties and applying the TPA to the Professions: ACCC v Knight” (2007) 23(5) TPLB 73 at 75.

78 The conduct relating to Dr Versace is still mentioned in judgment, see (2004) 10 TCLR 994 at [41]-[52] and [167]. For background and all relevant facts see (2004) 10 TCLR 994 at [33]-[100].

79 [2004] 3 NZLR 689 at [46].

80 For full discussion of penalties imposed see [2004] 3 NZLR 689 at [41]-[52].

81 [2004] 3 NZLR 689 at [2] and [19].

82 Pengilley at 12-13.

83 [2004] 3 NZLR 689 at [6].

84 The Commerce Commission, Ophthalmologists Withdraw Appeals Against High Court Ruling of Anti-Competitive Behaviour (media release, Commerce Commission, New Zealand, 15 December 2004).

85 See Janes at 449.

86 See Janes at 449.

87 See Janes at 451.

88 See The Commerce Commission, Commission Warns GP’s About Price-Fixing (media release, Commerce Commission, New Zealand, 18 May 2005).

89 Pengilley at 19.

90 Sherman Act 15 U.S.C. § 1. See Blumenthal W, “Background Materials: A Primer on the Application of Antitrust Law to the Professions in the United States” (Canadian Bar Association Annual Conference on Competition Law, Ottawa, 29 October 2006) at 2 (“Blumenthal”). Available from www.ftc.gov .

91 Goldfarb v Virginia State Bar 421 U.S. 773 (1975); National Society of Professional Engineers v United States 435 U.S. 679 (1978). See Blumenthal at 3-4.

92 Thurman Industries Inc v Pay N Pak Stores Inc 875 F.2d 1369, 1373 (9th Circuit, 1989), as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 10.

93 McGlinchy v Shell Chemical Co, 845 F.2d 802, 811 (9th Circuit 1988) as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 11.

94 McGlinchy v Shell Chemical Co, 845 F.2d 802, 811 (9th Circuit 1988) as cited in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 11.

95 A useful discussion appears in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 10-14.

96 A useful discussion appears in Hilton v. Children's Hospital San Diego, 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 17-20.

97 Federal Trade Commission, Submission of the United States ( OECD Roundtable on Competition in the Health Professions, October 2004) at 7, available from www.ftc.gov.au (“OECD Submission”); Blumenthal at 10.

98 Blumenthal at 10.

99 OECD Submission at 7.

100 For full discussion of facts see 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 1-8.

101 See 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 5.

102 See 2007 U.S. Dist. LEXIS 16517 (S.D. Cal., Mar. 7, 2007) at 16-19.

103 For a similar case see Nilavar v Mercy Health System-Western Ohio 244 Fed. Appx 690.

104 See Abraham v Intermountain Health Care Inc 461 F.3d 1249 which considered price-fixing and monopoly cases (namely Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) and Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984)) as equally useful in group boycott cases under s 1 of the Sherman Act. Abraham was a case concerning group boycotts in relation to ophthalmologists and optometrists. As cited in Richmond C and Anderson J, Richman and Anderson on the Tenth Circuit Affirming Summary Judgment for Managed-

Care Company Accused of Conspiring with Ophthalmologists to Boycott Optometrists in

Intermountain Health Care (LexisNexis Expert Commentaries, November 2007).

105 These statutes include the Anti-Kickback Statute and the Stark Law, as referred to in Patel A and Miller A, “Physician-Vendor Arrangements: Legal Compliance Challenges” Metropolitan Corporate Counsel (2007) 15(12) Metropolitan Corporate Counsel 48. The kick-backs in this case have been acknowledged as anti-competitive, see Washington Business Information Inc, “Class Action Suit Accuses Zimmer of Kickbacks” Devices and Diagnostics Letter (19 May 2008). For a general report on the case see Feder B, “Focus Shifts to Doctors in Medical Device Case” International Herald Tribune (25 March 2008) p 10.

106 See Health Sector Competition Study.

107 See Competition Act, ( R.S, 1985, C-34 ) s 45 (1)(a)-(c).

108 See eg Janelle Pharmacy Ltd v Blue Cross of Atlantic Canada [2003] N.S.J. No.307; 203 NSSC 179 at [118]-[121] citing R. v Abitibi Power and Paper Co (1960) 131 C.C.C. 201 at 249-252

109 See eg Australian Competition and Consumer Commission, Emerging Professions (ACCC, Canberra, 2008) at www.accc.gov.au

110 Carlton AL and Bensoussan A, “Regulation of Complementary Medicine Practitioners in Australia: Chinese Medicine as a case example” (2002) 10(1) Complementary Therapies in Medicine 20 at 21 (“Carlton and Bensoussan”).

111 Expert Committee on Complementary Medicines in the Health System, Complementary Medicines in the Australian Health System (Department of Health and Aging, Canberra, September 2003) available at http://www.tga.gov.au/docs/html/cmreport1.htm (“Expert Committee Report”).

112 Expert Committee on Complementary Medicines in the Health System, Complementary Medicines in the Australian Health System (Department of Health and Aging, Canberra, September 2003) available at http://www.tga.gov.au/docs/html/cmreport1.htm (“Expert Committee Report”).

113 Carlton and Bensoussan at 23-25.

114 See eg Johnston M, “Government looks at funding alternative health therapies” The New Zealand Herald (3 August 2004) available from www.nzherald.co.nz .

115 New Zealand Association of Medical Herbalists, Proposal that Herbal Medicine become a regulated profession under the Health Practitioners Competence Assurance Act 2003: Invitation to submit comment on proposal (Ministry of Health, Wellington, New Zealand, 2006) available at http://www.moh.govt.nz at 1, 4 (“Herbalists Proposal”).

116 See New Zealand Association of Medical Herbalists,


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