Professional services
Overview
Professional services include areas such as law, accountancy and real estate. Often referred to as liberal professions, they can generally be defined as occupations requiring special training in the arts or sciences. They form an integral part of the EU economy and provide an essential service both for business and consumers, therefore having knock-on effects on the competitiveness of other sectors.
The Commission has taken the initiative to examine whether the current regulation of the sector, often set by national governments, is the most efficient and least restrictive of competition, or whether better regulation, more adapted to the modern world could help spur economic growth, and deliver better services and value for consumers, in line with the objectives set by the Lisbon Strategy. The Commission’s work focuses on six professions: lawyers, notaries, accountants, architects, engineers and pharmacists.
The Commission has undertaken extensive research into these sectors, including an independent study carried out by the Institute for Advanced Studies in Vienna (IHS). This study found that the sector is characterised by high levels of restrictive regulation and in a large number of Member States regulations exist which affect pricing (e.g. fee scales), advertising (e.g. ban comparative or price advertising), limit inter-professional co-operation and restrict business structure. Many are highly restrictive rules which distort competition and would be considered unacceptable in most spheres of economic activity.
The Commission has adopted two reports on the subject: the first report of 9 February 2004 'Report on Competition in Professional Services' was followed on 5 September 2005 by the report 'Professional Services - Scope for more reform'.
Both reports set out the Commission’s opinion on the scope to reform or modernise specific professional rules. The reports explain that the Commission is not opposed to all regulation as it is recognised that there are legitimate arguments in favour of certain regulations in the professions. But restrictive regulations should only exist where they provide an effective and proportionate means of protecting consumers. The reports urge all interest groups to make a joint effort to reform or eliminate those rules which are unjustified. Regulatory authorities in the Member States and professional bodies are invited to voluntarily review existing rules taking into consideration whether those rules are necessary for the public interest, whether they are proportionate and justified, and necessary for the good practice of the profession.
The 2005 follow-up report gives an overview of progress made during 2004/05 by Member States in the review and removal of unjustified regulatory restrictions in the professions.
In addition to making the case for more pro-competitive legislation, the Commission also continues with relevant casework using EC competition rules to promote reform, such as the Belgian architect's case.
The Commission co-ordinates work in this sector with national competition authorities and many are pursuing a general programme of action to bring about reform, including the use of EC competition rules and Article 81 in particular. See also the overview of National Competition Authorities' Advocacy and Enforcement Activities in the area of Professional Services. More information about the European Competition Network (ECN) in general may be obtained from its own website. The EFTA Surveillance Authority has undertaken work in this area and produced its own report in 2005.
Within the European Commission, its competition department works closely with the departments for the internal market, enterprise and consumer affairs also have an interest in the sector. The Commission has sought to reach out to the professional bodies and other interest groups, in particular consumer organisations, to discuss reform and retains an open door policy.
The European Parliament resolution of 12 October 2006 supports the Commission in its efforts to rid the sector of overly restrictive regulation which inhibits competition and, it argues, would be beneficial to the EU economy and consumers.
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