Professional associations must also abide by the competition rules, the Court of Justice of the European Union recently concluded. Any system of compulsory training which they impose on their members must not be anti-competitive or discriminatory.
Even non-profit organisations can be found to fall foul of rules once they undertake economic activity
All chartered accountants in Portugal must be members of the Portuguese Order of Chartered Accountants, which oversees all aspects of the practice of the accountancy profession in Portugal. This association adopted a regulation whereby chartered accountants are required to have obtained, over the course of the previous two years, an annual average of 35 credits for training provided or approved by the association.
Another regulation makes provision for two types of training, namely, institutional training which can be provided only by the association and professional training which may be provided by the association or by bodies registered with the association. Any decision to accept or reject the registration of training bodies as well as to approve or reject training sessions proposed by these same bodies is taken by the association following the payment of a fee.
The Portuguese Competition Authority maintained that these regulations distorted competition on the market in compulsory training for chartered accountants in Portugal. It found the market to have been artificially segmented, since the bulk of the training had to be provided by the association.
Furthermore, discriminatory conditions were being imposed to the detriment of competitors of the association insofar as the other portion of training is concerned. The association sought to annul this decision before the national courts. The latter courts in turn made a preliminary reference to the CJEU requesting guidance as to whether EU competition law applies to professional associations.
The Court of Justice confirmed that a regulation adopted by a professional association can be found to be in breach of competition law just like any other decision of the same association. The fact that a professional association is required by law to put into place a system of compulsory training for its members does not mean that the rules adopted in order to regulate training cannot be anti-competitive and illegal. Any rules regulating a system of compulsory training will be found to be in breach of competition law, if such rules eliminate competition for the benefit of the professional association and discriminate against its competitors.
The Court noted that to analyse the effects which the regulations have on competition, the Portuguese court would first have to analyse the structure of the market. This is necessary to decide whether there is justification for the distinction drawn between the two types of training on the basis of their objectives, duration and the bodies authorised to provide them.
The Court observed that there could be factors which show that the two types of training being provided are partially interchangeable. It also noted that the regulations adopted by the association reserved a significant portion of the market in compulsory training to the association.
In so far as their duration is concerned, the CJEU ascertained that the national court would have to determine whether other training bodies wishing to offer short training programmes are being prevented from doing so. Furthermore, the national court would also have to take into consideration whether the fact that chartered accountants are required compulsorily to earn a minimum of 12 institutional training credits per year while there is no similar requirement for professional training, is liable to confer a competitive advantage on the training sessions provided by the association itself.
The CJEU observed that the next step would be for the national court to examine the conditions governing access to the market for bodies other than the association. This is necessary to establish whether equality of opportunity is guaranteed between the various economic operators.
The CJEU noted that the professional training provided by the association is not subject to an approval procedure, unlike that of the other training bodies.
The conditions for approval to be given to the latter bodies were drafted in vague terms in the regulations adopted by the association. The association, the CJEU therefore ascertained, had conferred on itself the power to rule unilaterally on applications for registration or approval without that power being made subject to any limits, obligations or review procedure. Such a situation obviously could lead the association to distort competition by favouring the training sessions which it itself organises.
Similarly, the fact that applications for approval of training sessions had to be submitted at least three months before the start of the training, was liable to restrict the offer of training proposed by other training bodies since they were being deprived from offering, in the immediate future, training on current issues.
The CJEU concluded that all such restrictions seem to go beyond what is necessary in order to guarantee the quality of the services offered by chartered accountants and furthermore are not exempted in terms of EU law.
The CJEU has once more confirmed the far-reaching effects of EU competition law and that even non-profit-making organisations can be found to fall foul of such rules once they undertake an economic activity.
mariosa@vellacardona.com
Mariosa Vella Cardona is deputy chairwoman of the Malta Competition and Consumer Affairs Authority and a member of the National Commission for the Promotion of Equality.