Competing fairly in professional services
Like all businesses, professionals and their associations must compete fairly and avoid engaging in anti-competitive behaviour such as cartels, exclusive dealing, unfair dealing or unconscionable conduct. By enforcing the Competition and Consumer Act 2010 , the ACCC provides for the protection of professionals and consumers of professional services.
Professional service providers - such as doctors, dentists, vets, engineers, architects and lawyers - operate in a competitive marketplace and must adhere to:
- laws under the Act for competing and dealing fairly with other businesses and protecting consumers
- any professional association codes or rules aimed at maintaining high standards and ethical behaviour – these must also comply with the Act
- any other restrictions imposed by legislation that falls outside of the Act – these are overseen by the National Competition Council.
The ACCC has identified four broad issues of concern across all professions that may lead to breaches of the law.
- Reservation of work or monopoly by one profession when another has the credentials to also do the work.
- Restrictions on entry into the market using means such as the imposition of educational competency standards, licensing, certification requirements and restrictions on foreign professionals and para-professionals.
- Restricting and controlling markets through:
- imposing prices, in particular via recommended price schedules
- certain prescribed advertising or promotions
- separating the market into discrete professional activities, including those performed by accredited professionals
- certain ownership and business structures
- anti-competitive agreements, such as price fixing or boycotts
- national and local presence requirements, restrictions on foreign investment and ownership, lack of recognition of foreign credentials and other restrictions on professional activities by overseas professionals.
- Failing to deliver consumer protections, particularly through false and misleading conduct or failing to obtain informed consent before a transaction.
Businesses can apply to the ACCC for an authorisation or notification that provides protection from legal action under the Act for certain potentially anti-competitive conduct that is in the public interest.
Compliance with your professional association codes of conduct or rules does not always guarantee compliance with the Act. It is vital for you to understand your legal rights and obligations to compete fairly and offer consumer protections.
Take the following steps to ensure you are operating within the law:
- determine your own prices. Never agree with competitors to fix prices, rig bids, restrict supply, allocate markets or negotiate with suppliers
- don’t agree with a supplier, competitor or professional association to boycott certain markets and restrict access for other professionals
- never act unconscionably by using a superior commercial position to subject another party to harsh or oppressive behaviour
- never use unfair tactics or attempts to unreasonably extract benefits from another business or professional by using your size or bargaining power
- do not mislead other businesses or consumers by misrepresenting:
- the quality, sponsorship, approval, performance characteristics, accessories, uses or benefits of goods or services offered
- that a business has a sponsorship when it doesn’t
- costs or fees
- credentials and areas of expertise.
- always be transparent in your advertising and dealings with clients so they understand fully the services you are offering and prices you are charging before they sign a contract, make a payment or give financial consent.
- understand consumer rights to a cancellation, refund and compensation if you fail to deliver consumer guarantees for relevant services provided.
Professionals have an ethical obligation to act in the best interest of their clients and patients. Ethical duties prohibit professionals from acting to promote their own self interest.
The law also recognises certain relationships as ‘fiduciary relationships’ where one person places confidence in another, for example, between trustee and beneficiary, agent and principal, or solicitor and client.
Not every relationship between a professional and client is fiduciary and fiduciary obligations do not extend over an entire relationship.
There is nothing inherent about ethical or fiduciary duties that conflict with provisions of the Act applying to professionals.