4 February 2015 by Cliffe Dekker Hofmeyr Competition Alert

Tribunal dismisses private action to challenge professional optometry rules

The question of whether Rule 8 (Rule 8) of the Ethical Rules of Conduct for Practitioners Registered under the Health Professions Act of 1974, read together with the Policy Document on Undesirable Business Practice (Policy), facilitated a prohibited practice under s4(1)(1) of the Competition Act, No 89 of 1998 (Act) was referred to the Competition Commission by Ian Walter Buchanan. In essence, Rule 8 and the Policy prohibit private businesses from acquiring ownership in the professional practice of optometrists and also do not allow for optometrists to practice professionally in the employ of or be in partnership with anyone not registered as an optometrist. The Commission issued a notice of non-referral, thereby dismissing the complaint and, consequently, Mr Buchanan privately referred the matter to the Competition Tribunal.

In concurrence with the Commission, the Tribunal dismissed the matter on the grounds that no prevention or lessening of competition arose from the prohibition.

The Tribunal, however, confirmed that Rule 8 and the Policy fell within the definition of a decision by an association of firms (one of the elements required to establish a restrictive horizontal practice) on the basis that, they were formulated through the Health Professionals Council of South Africa's rule making process which involves inputs by competitors who, among other parties, serve on the Professional Board of Optometry and Dispensing Opticians. Nevertheless, the prohibition could not be shown to lead to a substantial lessening or prevention of competition and, hence, did not constitute a transgression of s4 of the Act.

In its dismissal of the matter, the Tribunal stressed that compelling, empirical evidence is required to show the substantial effect of lessened competition in a market. Without adequately discharging the onus of proving the competitive benefit of allowing private corporate institutions to independently own optometry practices, the complainant's argument had to fail.

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