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IP/04/800

Brussels, 24 June 2004

Commission condemns Belgian architects’ fee system

The European Commission has concluded that the scale of recommended minimum fees of the Belgian Architects Association is in breach of European Union competition rules. Like fixed prices, recommended prices reduce competition because they can facilitate price coordination.

“Recommended prices can mislead consumers as to what is a reasonable price for the service they are receiving and as to whether this recommended price is negotiable. I hope this decision will encourage all professional bodies to abolish unjustified restrictions,” Competition Commissioner Mario Monti said.

The recommended minimum fee scale operated by the Belgian Architects’ Association lays down an architect’s fees as a percentage of the value of the works realised by the entrepreneur and applies to all architectural services provided in Belgium by independent service providers.

The Commission believes the recommended fee scale constitutes an infringement of the European competition rules because it seeks to coordinate the pricing behaviour of architects in Belgium, something which is not necessary for the proper practice of the profession.

In the Commission’s view, the fees should reflect an architect’s skills, efficiency and costs – and perhaps reputation – and should not be dependent solely on the value of the works or the price of the entrepreneur. In any event, the architect should determine the fee independently of competitors and in agreement with the client only.

The Commission has decided to fine the Belgian Architects Association € 100 000. This amount reflects a gradual approach[1] by the Commission in fining anti-competitive practices in the professions and also the fact that the fee scale was abolished in 2003.

Background

In February 2004 the Commission issued a Communication on Competition in Professional Services[2] advocating the introduction of competition and increased transparency to the benefit of consumers.

Whilst recommended prices do not automatically and always restrict competition, there are more pro-competitive mechanisms to provide consumers with a trustworthy guide for the average costs of services, for instance through the collection and publication of survey-based historical price information by independent parties such as consumer organisations.

The Communication also encourages the national legislators and professional bodies to revise and amend their restrictive rules and practices to enable the professions to better contribute to growth and economic welfare in the EU. Although there are no exact figures, it is estimated that professional services amount to about a third of employment and, as part of the services sector, they are also the main motor for growth in Europe. Belgian architectural and engineering services and related technical consultancy amounted to €4.4 billion, in 2000, which corresponds to 15% of the turnover achieved in the Belgian construction sector.

It should be noted that the French Conseil de la Concurrence has prohibited[3] the French Architects’ Association from further elaborating and distributing fee scales. The UK’s Office of Fair Trading also came to the conclusion that the Royal Institute of British Architects’ (RIBA) indicative fee guidance could facilitate collusion. It accepted new fee guidance based on historical information and the collation of price trends that do not provide a lead on the current year’s prices.


[1] In its first decision concerning tariffs of professional bodies, in 1993, the Commission condemned the fixed tariffs of the association of Italian customs agents without imposing a fine. In 1996, the Commission took a decision concerning the recommended tariffs of the association of Dutch forwarding agents, imposing a symbolic fine of €1000.

[2] COM(2004) 83 final

[3] Decision no. 97D45 of 10 June 1997


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