Australia: Professional rules – how safe from competition law in the EU? Antitrust cases in Portugal, Italy and the Czech Republic show that professional rules can be challenged under EU competition law

The rules of professional bodies and associations are often designed to restrain their members in the way they conduct a business. In principle, that can be anti-competitive. But does that mean that there is an infringement of competition law, making such rules void and potentially giving rise to liability (for the association and its members) to fines and damages for competition law breaches?

Within the European Union – under the competition/antitrust laws of the EU, and of the individual Member States which mostly follow EU law – the answer is complex. In practice, this means that:

  • professional bodies do need to check that their rules are compliant
  • there are grounds for challenging certain professional rules
  • at the same time, rules that in other contexts might raise competition law concerns may be defensible if they are inherent in the pursuit of the professional body's objectives of protecting consumers by way of safeguarding professional integrity or quality standards.

Basic EU law principles on professional associations

Over the years, EU competition law has developed a number of principles in this area.

The first point to note is that, in "structural" terms, rules promulgated by an organisation whose members are businesses (whether professional or not) are certainly capable of being subject to the EU prohibition on anti-competitive agreements, Article 101. This is so even where the rules appear to be "unilateral" stipulations by the organisation concerned. Either the rules will be regarded as an agreement or arrangement between the "undertakings" (i.e. businesses) who make up the organisation or – even if not – the rules will be regarded as a "decision by an association of undertakings". Decisions by an association of undertakings are explicitly subject to the Article 101 prohibition, and to the equivalent national laws in the Member States of the EU.

However the mere fact that such rules are capable of being subject to the Article 101 prohibition on anti-competitive agreements, and the equivalent national law provisions, does not mean that any professional rule that restricts competition is necessarily prohibited. Specifically, there are three potential "defences":

  • Where, and to the extent that, national legislation required the rule in question, or otherwise prevented competition in the matter covered by the rule, that is a complete defence under the Article 101 prohibition (and under national equivalents in EU Member States). This is the so-called "state compulsion" defence. However, where the rule was only encouraged or approved by national authorities, that is not a sufficient defence. (See, in this connection, Competition World, July 2013, "More fines: Italy: Complying with national law gives immunity from fines".)
  • Linked to this, where the professional body is adopting rules on the basis of powers laid down by the state, with the state (i) having defined the public interest criteria and essential principles with which the rules must comply and (ii) retaining the power to adopt decisions in the last resort, the rules of the body will not be regarded as subject to Article 101 but, rather, as state measures. (They might, however, be challengeable under EU law on state rules that impede the free movement of services.)
  • Even where these defences of "state compulsion" and "state measures" do not apply, a judgment from 2002 by the EU Court of Justice, in the Wouters case, held that even rules with that have effects restrictive of competition may nonetheless fall outside the Article 101 prohibition if those anti-competitive effects are "inherent" in the pursuit of the professional body's
  • "objectives... connected with the need to make rules relating to organisation, qualifications, professional ethics, supervision and liability, in order to ensure that the ultimate consumers of [in that case] legal services and the sound administration of justice are provided with the necessary guarantees in relation to integrity and experience"11.

In the Wouters case, the EU Court was setting out the principles that the Netherlands national court had to apply when assessing a challenge that had been made to a rule of the Netherlands Bar Council which prohibited lawyers in the Netherlands from entering into partnership with non-lawyers such as accountants. It is clear from the EU Court's judgment that certain rules with anti-competitive effects can be permitted, in so far as they are inherent to the organisation's professional objectives of protecting consumers in terms of integrity, experience and so on.

But it would be a mistake to conclude from this that professional rules are always safe from the Article 101 prohibition (or the national equivalents).

  • There have been a number of cases where the European Commission has found that rules having the effect of operating as minimum fee scales have been considered as not intrinsic or necessary to the proper objectives of the professional association, and therefore as subject to the Article 101 prohibition – in the case of Belgian architects in 2004 and French pharmacists in 201012.
  • The European Commission has expressed concerns that certain other aspects of professional rules could be restrictive of competition – including (i) restrictions on advertising, (ii) restrictions on entry into the profession concerned and (iii) exclusive allocation to the profession of certain tasks – and has asked professional associations to review their rules and, where these are not objectively justified, to replace them with less restrictive provision13.

It is clear, therefore, that in these areas there is no "free pass" for professional rules, but they need to be examined case-by-case in terms of the Wouters test of whether they are intrinsic or necessary to the proper objectives of the professional association.

Developments this year in Europe

The past few months have seen three cases of professional rules coming under scrutiny under Article 101 or the equivalent national prohibitions, on the basis that the Wouters test is not met.

Portuguese chartered accountants: In February 2013, the EU Court of Justice issued a judgment on a series of questions about the rules of the OTOC, Portugal's professional body for chartered accountants. The case concerned OTOC's rule relating to compulsory professional training, which required that a certain number of hours of training be provided either by the OTOC itself or by bodies approved by the OTOC, other training bodies having failed to obtain approval. Upholding decisions of the Portuguese competition authority, and applying the Wouters criteria, the EU Court held that the relevant OTOC rule was not protected from the Article 101 prohibition because:

  • it did not "ensure equality of opportunity between the various economic operators", i.e. the businesses capable of offering the relevant provisional training
  • since the objective of guaranteeing the quality of accountants' services "could be achieved by putting into place a monitoring system organised on the basis of clearly defined, transparent, non-discriminatory, reviewable criteria likely to ensure training bodies equal access to the market in question", it followed that the OTOC rule went "beyond what is necessary to guarantee the quality of the services offered by chartered accountants"14.

Italian lawyers: In July 2013, the Italian Competition Authority opened an investigation under Article 101 against Italy's Bar Council, the national professional association representing all practising lawyers. The concerns relate to:

  • the publication on the Bar Council's website of minimum tariffs, together with a circular from 2006 saying that lawyers charging fees below the minimum level could face sanctions from the Bar Council – the Competition Authority considers that this could be an unlawful fixing of minimum prices
  • an opinion issued by the Bar Council in 2012 prohibiting lawyers from using online platforms offering discounted rates for legal services (in particular, the platform, which the Competition Authority considers could lead to foreclosure of a distribution channel for legal services, with the effect of discouraging lawyers from charging lower fees.15

Czech Republic – various professional bodies (architects, executors of wills, etc): Also in July 2013, the Czech Republic's competition authority published the results of its completed preliminary investigation into the degree of competition in professional associations. It raised concerns about certain professional bodies – specifically the Chamber of Architects, and the Chamber of Executors – and is now seeking to achieve, through informal negotiation, changes in the practices and policies of those rules. The Czech authority said that, if the negotiations were not successful, it will initiate formal competition law proceedings and, where appropriate, impose sanctions.

Related Articles


11Court of Justice of the EU judgment, Case C-309/99 Wouters v Algemene Raad van de Nederlandse Orde Van Advocaten [2002] ECR I-1577, paragraph 97.
12European Commission decisions, Case COMP/38549 Belgian Architects' Association, decision of 24 June 2004; and Case COMP/39510 Ordre National des Pharmaciens en France, decision of 8 December 2010 (currently under appeal to the EU General Court).
13European Commission XXXIInd report on Competition Policy (2002), points 42 to 64, and 90.
14Court of Justice of the EU, Case C-1/12 OTOC, judgment of February 28, 2013.
15Italian Competition Authority, CMF, investigation decision of 16 July 2013.

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