Competition issues in the professions

Like any other sector of the economy, the professional sector overall, and each individual profession, has its own distinctive characteristics. The professions operate in markets, with market forces determining outcomes. However, these professional markets usually have a high degree of regulation or restriction which affect competition.

The ACCC has identified the following five broad issues of concern across all professions:

• reservation of work/monopoly—reserving a field of activity to particular professionals—for example, only lawyers being allowed to do conveyancing work in some states
• entry restrictions—regulating entry into the market, including the imposition of educational and competency standards, licensing and certification requirements, and restricting entry by foreign professionals and para-professionals
• other restrictions
• regulation of prices, in particular via recommended fee schedules
• prohibition of certain kinds of advertising or promotion
• functional separation—separating the market into discrete professional activities, including those performed by accredited specialists
• restrictions on ownership and business structure for professional practice
• anti-competitive agreements—in particular price fixing and boycotts
• international dimension—in particular, recognition of qualifications, but also nationality and local presence requirements, restrictions on investments and ownership, restrictions on the exercise of professional activities
• consumer protection—in particular, applying misleading and deceptive conduct provisions to professional services and issues of informed financial consent
• anti-competitive behaviour—such as price fixing and boycotts.

As with all restrictions on competition, it is important to distinguish between:

• government-imposed restrictions, which are provided for in Commonwealth, state, territory legislation or regulations
• privately imposed restrictions, which may be provided for via self regulatory arrangements imposed by bodies such as professional associations, societies or colleges.

Restrictions imposed by legislation generally fall outside of the reach of the Competition and Consumer Act 2010 and competition issues in relation to those restrictions are overseen by the National Competition Council.

Privately imposed restrictions with no legislative protection are very much within the reach of the Competition and Consumer Act.