Newsletter
MINIMUM CHARGES FOR PROFESSIONAL SERVICES VIOLATE FTL
The Fair Trade Commission (FTC) has held that the setting of standard fees, in particular minimum charges, by professionals such as architects, accountants and lawyers constitutes a concerted action which restricts competition. The FTC will require all professional associations to refrain from setting minimum charges.
The Public Construction Commission (PCC) recently asked the FTC for a ruling as to whether the setting of minimum charges by engineers' and architects' associations violates the Fair Trade Law (FTL). Article 32 of the Engineers Law requires the charter of engineers' associations to set standard rates of remuneration, with maximum and minimum rates, and Article 37 Paragraph 1 of the Architects Law requires architects' associations to draw up codes of practice stating such matters as the content of architects' services, standard rates of remuneration, and responsibilities and duties to be fulfilled.
With reference to the power to set charges given to professional associations by such laws, the FTC states that the amended Article 46 of the FTL, which came into force on 3 February 1999, sets forth the priority of the FTL in cases of conflict with other statutes. Other laws governing enterprises' competition-related activities can only prevail where they do not conflict with the spirit of the FTL.
Because this case impinges upon the powers of other ministries, the FTC plans to meet with the PCC, the Ministry of Justice and the Ministry of Finance for consultation on this issue in the near future. The FTC hopes to prohibit professional associations from setting minimum charges. If this is not possible under present legislation, it will ask the relevant agencies to amend the Architects Law and other statutes so that methods of charging do not affect market competition.