Correspondence from the Office of Fair Trading to NASGP

Dated 18/06/2001
Received 25/06/2001

FEE GUIDANCE FOR GP LOCUMS, ASSISTANTS AND RETAINEES

Thank you for your letter of 7 June 2001, sent to my colleague Phil Hand. You asked for the Office's views on two questions. First, whether the National Association of Non-Principals ('NASGP') could continue to display the BMA's old fees on its web site. Second, whether the OFT would object to the NASGP publishing on its web site the procedure fees typically charged by a range of members around the country.

It may be helpful if I begin by outlining the Director General's competition powers. Under the competition legislation that he administers, now principally the Competition Act 1998 ('the Act'), the Director General of Fair Trading ('the Director General') applies and enforces the provisions of the Act against anti-competitive practices. The Act contains two major provisions. Firstly, it prohibits agreements and other co-operative behaviour between undertakings that have the object or effect of preventing, restricting or distorting competition in the United Kingdom to an appreciable extent ("the Chapter I prohibition"). Secondly, it prohibits an undertaking that is dominant in a particular market in the United Kingdom from abusing its position of dominance ("the Chapter 11 prohibition"). The Director General also has a duty under the Fair Trading Act 1 973 ('the FTA') to keep under review commercial activities in the United Kingdom with a view to identifying anti-competitive practices.

As you are aware, the Office has been investigating the BMA's fee guidance. We are nearing the end of our investigation and we expect to give the BMA our views in the near future. In advance of that time, we do not think that it is appropriate to comment in detail on questions that raise similar issues in very similar circumstances.

However, we are able to make some general, without prejudice, comments. Broadly speaking, we take the view that there should in any market be competition on price and quality grounds. In the context of price, individuals should set or negotiate their fees with potential employers individually.

Anything that prevents, restricts or distorts the ability to act in this way is potentially anticompetitive. In particular, guidance through the mechanism of a trade association may distort competition on price. The detailed information you are considering publishing would, we think, significantly distort the setting of fees by, at the least, those non-principals who belonged to NASGP. In those circumstances, we are likely to be very concerned about any proposals to conduct a survey and publish the individual results on your web site.

Publication of the BMA's old fee guidance may cause some degree of distortion. However, many GP principals and non-principals perceive a hiatus in the BMA's guidance and may to a large extent set their fees as they see fit rather than on the basis of the historic fee guidance. In those circumstances publication of the old fee guidance may cause less distortion. If you nevertheless wish to publish this historic information, it should be accompanied by a statement to the effect that this is historical information and not a current price recommendation.

In conclusion, we are likely to be very concerned about any plans to publish survey fee data of the type you contemplate although we are likely to be less concerned about continued publication of historic BMA guidance. I hope that I have been of some assistance in clarifying our position at this time for you.

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