Chamber of Veterinarians restricted competition among its members

By its first instance decision from 4 June 2014 the Office for the Protection of Competition (hereinafter referred to as “the Office”) imposed a fine of CZK 399,600 on the Chamber of Veterinarians of the Czech Republic (hereinafter referred to as “the Chamber”) for breaching the Act on the Protection of Competition. The decision has not come into force yet.

The Chamber committed a prohibited decision of association of undertakings by incorporating four provisions into its Professional Code. Mentioned provisions significantly restricted competition among its members in the relevant market of veterinary medical and preventive activities

In particular one of the provisions did not allow veterinarians to offer surgeries without previous request of a breeder and veterinarians were therefore restricted in offering services in the market freely according to their preferences. The restriction prevented veterinarians against conducting active marketing when constituting a barrier to competition among veterinarians on the territory where other veterinarians were already active. Therefore it had similar impact as a cartel agreement on territorial market sharing.

Another provision of the Professional Code identified by the Office as anti-competitive did not permit the participation of veterinarians in award procedures, competitions that were not launched pursuant to the Act on Public Contracts. Chamber members therefore were not able to submit an offer to parties potentially interested in their services. In particular, this led to a decrease of price competition among veterinarians.

Other two anti-competitive provisions were focused on prevention of mutual competition for customers. The Chamber sought to prevent the situation when a veterinarian gains a customer of another veterinarian without a consent or request of the previous veterinarian. Also veterinarians were prohibited from accepting an order from breeder who was a regular customer of other veterinarian before the breeder has terminated all rights and obligations towards the first veterinarian. Also in this case the Chamber tried to influence the competition conduct of its members when preventing veterinarians to actively compete for customers or accept a demand for veterinary services of the breeder. 

Three of the mentioned provisions were enforced from the year 1998 till the beginning of the year 2013. The fourth provision related to the prohibition of taking over the clients was applied from the year 2005. Moreover the Chamber was already fined for the same infringement in the past.

Anti-competitive provisions were capable of influencing the business decision-making process of veterinarians that were obliged to comply with the set provisions under the threat of a sanction. Therefore they were restricted in their business conduct. Mentioned provisions might have led to similar effects as prohibited agreement on market sharing or price agreements. It was focused on limiting the interaction of supply and demand in the relevant market and supported the preservation of a status quo of the veterinarians conduct towards breeders and prevented the development of competition among its members. Last but not least the market entry of new Chamber members was also restricted.

Anti-competitive provisions of the Chamber´s Professional Code were assessed as forbidden and invalid and their implementation was prohibited by the Office. The Office imposed a fine of CZK 499,500 for the competition infringement. However, as the Chamber confessed its conduct the Office used the settlement procedure and the fine was decreased by 20 % on the final amount of CZK 399,600.

International and External Relations
14/049/HS019 – S566/2012