ACCC proposes to deny architects' arrangements in their current form

The Australian Competition and Consumer Commission has issued a draft decision proposing to deny a request for authorisation* made by the Royal Australian Institute of Architects.

In proposing to deny authorisation, the ACCC has highlighted a number of areas of concern.  However it considers that these concerns could be easily remedied by the Institute.

The Institute has sought immunity for a range of arrangements and activities, including a code of professional conduct and fee guides.  Aspects of these arrangements were previously authorised by the Trade Practices Commission (now the ACCC) in 1984.

The ACCC has closely assessed the arrangements proposed by the Institute and while it considers that they may produce some public benefits, it is concerned that certain aspects of the arrangements are likely to be highly anti-competitive.

Of particular concern to the ACCC are a number of provisions in the Institute's proposed code of conduct and fee guidance material.

The ACCC considers that the proposed code of conduct has the potential to unduly restrict competition and be to the detriment of the public. The ACCC considers that this detriment is likely to outweigh any benefits to the public which may otherwise have resulted from the code.

Having considered the fee graphs used by the Institute, the ACCC believes they do not offer any benefits to the public and are likely to significantly harm competition.

In the event that these concerns were addressed, the ACCC would be more likely to grant authorisation to the Institute.

Background

*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act 1974. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers a net public benefit. Interim authorisation allows the parties to engage in the conduct prior to the ACCC considering the substantive merits of the application. The ACCC's decision in relation to interim authorisation should not be taken to be indicative of whether or not final authorisation will be granted by the ACCC.