Competition Commission v. South African Medical Association

The Competition Commission (Commission) initiated an investigation into the conduct of the South African Medical Association (SAMA) in relation to the setting of tariffs for health care services provided by its members. SAMA is a non-profit association that is the representative association of medical practitioners in South Africa. SAMA dealt with both professional and business aspects of its members, including offering its members products and services aimed at enabling practitioners to work more effectively, such as billing systems and advice on law, ethics, human rights and labor relations. The organization also determined, recommended and published tariffs contained in its annual publication, Benchmark Guide to Fees for Medical Services (Benchmark).

The Commission conducted an investigation into whether the Benchmark contravened section 4(1)(b)(i) of the Competition Act, 1998 which provides:

“(1) An agreement between, or concerted practice by, firms, or a decision by an association of firms, is prohibited if it is between parties in a horizontal relationship and if -

(b) it involves any of the following horizontal practices -

(i) directly or indirectly fixing a purchase or selling price or any other trading condition.”

The Commission decided that SAMA contravened section 4(1)(b)(i) of the Competition Act in that it determined, recommended and published tariffs to its members, which had the effect of fixing the selling price of medical services, thus constituting anti-competitive conduct.

In the course of the investigation, SAMA admitted that it had contravened the Competition Act by determining and recommending prices of medical services to its members. The Competition Tribunal took note of the fact that the pricing list was not enforceable but merely served as a guideline to the medical profession. The contravention was further limited by the fact that only about half of its members were involved in private practice and would have been implicated in the contravention.

It was agreed between the parties that SAMA would cease to:

• Determine, recommend and/or publish tariffs to the members of SAMA; and
• Engage in any conduct that directly or indirectly facilitated an agreement between it and its members.

An administrative penalty of R900 000 was imposed on SAMA for its contravention of the Competition Act.

“[T]he Respondents wish to record that, in their view the contravention was of a technical nature, rather than a substantive one; the Guide to Fees published by the First Respondent was never a list of enforceable prices and merely served as a guideline for the medical profession, the Health Professions Council of South Africa (HPCSA) and the courts, as to the reasonableness of a charge for a particular service.. In this regard, the HPCSA, as well as the courts, have used this recommended list of tariffs to discharge of duties in terms of the Health Professions Act 56 of 1974 (Act 56 of 1974) and in matters before the courts.” Paras. 6.4, 6.4.1 and 6.4.2.