Professional associations

Price negotiation

Representative organisations cannot, on behalf of their members, negotiate contracts, arrangements or understandings regarding prices unless the conduct has been authorised. Neither can they negotiate contracts, arrangements or understandings that restrict their members' dealings or affect competition. Such conduct would be at serious risk of breaching the price fixing (ss. 44ZZRF, 44ZZRG, 44ZZRJ and 44ZZRK) and/or anti-competitive agreement (s. 45) provisions of the Competition and Consumer Act 2010.

However, such industry associations can make policy statements and advise their members on matters relating to contracting, pricing and other business arrangements. Industry associations may also provide guidance to their members on the negotiation process to ensure members are aware of all the relevant issues pertaining to contracts.

Recommended fee schedules

Because professional associations comprise members who compete with each other, any time an association deals with pricing issues—including recommended fee schedules—they are at risk of engaging in price fixing. The ACCC has consistently taken a strong stance against recommended fee schedules, usually implemented by the circulation of a list of recommended fees under the auspices of a professional association.

The ACCC considers that one of the inevitable purposes of the issuing of recommended fee scales by an association is that the association expects many of its members, if not all, to follow the recommendation. In the ACCC’s experience recommended fee schedules:

• generally cover a substantial number of members who are competitors for the purposes of the Competition and Consumer Act
• if operating in local geographic areas, significantly affect prices in such areas.

The ACCC considers that recommended fee schedules are likely to result in a substantial lessening of competition, notwithstanding that:

• the fee agreement consists of ‘recommended’ or guideline fees only
• there is no obligation or undertaking to comply with the recommendations made
• there is no attempt to police or follow up the recommendations made
• the fees are recommended by an association, and some individual members have no direct hand in the calculation of the recommended fees
• the prices are recommended by an association on the basis of costing or other calculations by an outside party.

The ACCC appreciates that association members may need help on how to set their own fees. It recommends:

• if an association does provide recommended prices, ensure these are strictly for ‘information only’
• associations ensure that members understand they must independently determine the prices to charge for their services
• associations do not impose disciplinary action for breaches of association ‘pricing policies’ or fee schedules
• associations consider providing advice and assistance to members on how they can calculate and set their own prices, taking into account the needs of their own business.

Associations can also help the public to better understand the nature and value of the services their members provide. This would include providing information on what factors members of the public should consider when selecting an appropriate professional to provide services.