A stern reminder by the European Commission that professional associations too have to toe the line where competition rules are concerned! Any restriction of competition committed by such professional bodies will be penalised by hefty fines just as any other anti-competitive conduct of an undertaking.
The European Commission recently fined a professional body, entrusted by the French government with the remit of ensuring that pharmacists in France comply with their professional duties, €5 million for a breach of the EU’s competition rules. French law grants the ONP control powers over pharmacists, in particular the power to keep a list of all pharmacists licensed to practice besides the obligation to supervise clinical laboratories.
The Commission’s decision came about as a result of a complaint filed with the European Commission by a group of undertakings alleging anti-competitive conduct on the part of the pharmaceutical professional body ONP. EU law condemns not only anti-competitive conduct on the part of undertakings but also decisions by associations of undertakings when such decisions have the object or the effect of restricting competition in a particular market and where they effect inter-state trade.
In this particular case, the Commission had no qualms in concluding that the ONP was to be considered as an association since its members engaged in economic activity and the ONP itself was autonomous in arriving at its decisions.
The Commission maintained that for a number of years, ONP took decisions in which undertakings associated with groups of laboratories were systematically targeted with the aim of impeding their development on the French market. Furthermore, the ONP imposed minimum prices on its members by prohibiting discounts of over 10 per cent on the public prices granted by private undertakings under contracts with State hospitals and state health insurance bodies amongst others.
Indeed, the Commission found that during the period under investigation, the prices of clinical laboratory testing services were often up to two or three times higher in France than in other member states. The French professional association was also found by the Commission to have systematically used or threatened to use its disciplinary powers if its instructions were not followed. All of this, the Commission concluded, was done to the detriment of the consumer and the State itself since both had to pay more for clinical tests than would have been the case had not the ONP behaved anti-competitively.
Indeed, though the conduct of professional associations such as those of lawyers or architects has often fallen under the scrutiny of the Commission, this was the first case where the Commission actually proceeded to impose a fine on an association of undertakings. Such a warning by the Commission must be taken seriously by professional associations which must ensure at all times that any decisions or orders issued to their members are in full compliance of competition rules.
The repercussions that ensue from anti-competitive behavior may indeed be financially crippling not only in terms of the amount of the fine imposed by the authorities but more so due to the fact that any person or firm affected by anti-competitive practices may file a claim for damages and interest before the national courts. The amount of damages and interest awarded by the courts is without any consideration of the amount imposed as a fine by the competition authorities. Bearing this in mind, both undertakings and associations surely cannot afford to take competition matters lightly!
mariosa@vellacardona.com
Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is also a member of the National Commission for the Promotion of Equality.