The Luxembourg Competition Authority closes with a non-infringement decision a compliance and antitrust investigation in the market for professional services

In the Ordre des architects et des ingénieurs-conseils et Monsieur Carlo Frank case the Luxembourg Competition Authority (LCA) considered whether the Luxembourgish Association of Architects and Engineers (OAI) and a member of it put in place an anti-competitive price-fixing agreement.

In June 2018 a customer of a Luxembourg-architect and member of the OAI, CF, filed a complaint with the LCA, reporting that CF invoiced him fees for professional services determined on the basis of the fee scale recommended by the OAI (the Fee Scale). That, in the view of the complainant, gave raise to two competition breaches:

i) Non-compliance with the LCA’s commitment decision of 5 February 2014 by which the OAI committed to refrain from issuing recommended Fee Scale to be incorporated by its members into the service contracts concluded with their clients as basis to determine the fees to be paid by the clients.

ii) A concerted practice by which the OAI and its members jointly determined the professional fees to be charged on customers on the basis of the Fee Scale.

The non-compliance allegation

The LCA noted that the only undertaking imposed by the commitment decision of 5 February 2014 that the complainant alleged the be infringed was the OAI obligation to communicate to its members which measures to adopt to comply with the above LCA decision.

However, the LCA found that the OAI adopted effective measures to prevent its associates from employing the Fee Scale. More specifically, a notice published in the OAI website clearly indicated that the professional fees have to be freely negotiated by architects and customers according to the nature of the services provided. Whether some professionals, such as CF, still relied on the Fee Scale to quantify their professional fees, could not be taken as evidence that the OAI infringed the commitment decision of 5 February 2014.

The price-fixing allegation

The LCA reminded that, as taught by the EU case law, a concerted practice can be inferred from coincidences and indicia which, taken together and in absence of another plausible explanation, constitute evidence of a competition breach. In essence, a concerted practice consists of concertation between the acting undertakings, an ensuing conduct in the market and a causality link between the concertation and the conduct. A concerted practice can be also established on circumstantial evidence and indicia provided that they are objective and concurring.

That said, the LCA was unpersuaded by the facts submitted by the complainant. First, the Fee Scale was removed from the standard contracts following the 2014 LCA commitment decision. Second, the OAI clearly told its associates that they were free to determine their professional fees without relying on the Fee Scale. Third, no evidence of recommendation or encouragement from the OAI to its member to apply the Fee Scale, which might be seen as evidence of concerted practice, was found. Fourth, neither the fact that a single professional, such as CF, continued applying the Fee Scale constitute evidence of a concerted practice. Indeed, such evidence could not be found in the conduct of some firms that unilaterally apply the Fee Scale to fix their professional fees.

For these reasons the LCA rejected all the arguments submitted by the complainants and found that the OAI and CF did not violate Article 101 TFEU and the corresponding Article 3 of the Luxembourg Competition Law.  

Conclusion

The non-infringement decision made by the LCA in Ordre des architects et des ingénieurs-conseils et Monsieur Carlo Frank is a reminder of the legal burden to establish a concerted practice. In this case the complainant was unable to submit facts and circumstances showing the existence of a concerted practice to the requisite standard. On the contrary, the complainant only alleged weak and unconvincing circumstances that, in the LCA view, were insufficient to establish a competition breach.