The Competition and Markets Authority (‘CMA’) has recently fined Consultant Eye Surgeons Partnership Limited (‘CESP’), an organisation formed by a number of partnerships providing private medical and surgical eye procedures, for breaches of UK competition law. You can find some media coverage of the announcement here, here and here.
The CMA issued a statement of objections to CESP in July following a year-long investigation, which identified a number of competition law violations dating from September 2008 to May 2015. These included:-
- recommending that its members do not accept lower fees offered by an insurer, and that they charge insured patients higher self-pay rates;
- circulating amongst its members detailed price lists for ophthalmic procedures such as cataract surgery to be used with insurers – these collectively set prices did not pass on lower local costs, such as cheaper hospital fees, and also made it harder for insurers and patients to obtain lower prices; and
- facilitating the sharing of consultants’ future pricing and business intentions such as whether to sign up to a private hospital group’s package price, which enabled members to align their responses.
CESP admitted the violations and reached a settlement with the CMA in respect of their fine. They co-operated with the CMA throughout the process and have also since committed to a ‘comprehensive competition law compliance programme’, a move which has been welcomed by the CMA. In light of their efforts and in accordance with CMA fining guidelines, the initial fine of £500,000 has been reduced to £382,000.
As stated by Ann Pope, the CMA’s Senior Director of Antitrust Enforcement, this decision demonstrates “the CMA’s willingness to pursue anti-competitive activity across a wide range of markets, including regulated and special sectors”. Niche sectors, or smaller organisations within them, must be aware of competition law requirements and should not assume that they’ll never end up in the CMA’s sights.
Following the CMA’s recent fining of an estate agency trade association (which we also blogged about in June of this year) this case is another example of businesses using trade associations to facilitate anti-competitive practices, including discussions around commercially sensitive issues. Both the trade associations and their members can be held responsible for competition law breaches, and evidently the CMA is willing to go after the associations themselves.
The case also serves as a reminder that good behaviour after an investigation is opened cannot re-write the past. A compliance strategy employed ‘after the fact’ is simply too little too late, with CESP still subject to a substantial fine despite the reductions. Had CESP put in place a compliance strategy beforehand, the infringements likely would have been avoided entirely.
While the CMA’s proceedings have now finished, this may not be the end for CESP. Affected insurers, or even individual patients, may yet choose to pursue civil action against CESP to recover over-payments made as a result of the unlawful arrangements – so watch this space.
If you think you may have been affected by CESP’s infringements, or you’d like to discuss competition law and its impact on your organisation, please get in touch with a member of the Public Law & Regulatory team or your usual Brodies contact. Also, as ever, you’re welcome to leave us your thoughts on this case in the comments section below.
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