High Court settlement with IMO following price fixing investigation
Outcome of the Case
In 2005, the Competition Authority (the Authority) began an investigation into allegations of price-fixing by the Irish Medical Organisation (IMO) in relation to the provision of Private Medical Attendant Reports (PMARs) to life assurance companies. It was further alleged that the IMO threatened to withdraw these services if life assurance companies did not pay a proposed increase in fees.
In 2007, on foot of legal proceedings initiated by the Authority, the IMO agreed settlement terms with the Authority to address its concerns regarding these allegations.
Outline of case
The IMO is a national representative body for general medical practitioners (GPs) and non-consultant hospital doctors, in addition to 800 consultant members (at the time). In 2005, the Authority began an investigation into allegations of price-fixing by the IMO in relation to the provision of PMARs to life assurance companies. It was further alleged that the IMO threatened to withdraw these services if the life assurance companies did not pay a proposed increase in fees.
The Authority carried out an investigation into whether or not the IMO had breached competition law. Arising from that investigation, the Authority initiated proceedings in the High Court against the IMO. The Authority claimed that the IMO’s conduct had as its object the prevention, restriction or distortion of competition in the market for medical information provided to life insurance companies and/or had as its effect the prevention, restriction or distortion of competition in the market for medical information provided to life insurance companies and the downstream market for life insurance.
The Authority agreed settlement terms with the IMO to address these allegations in 2007. Under the settlement terms the IMO agreed:
- To refrain from recommending or expressing an opinion on fees to be provided to life insurance companies by GPs, or otherwise facilitating co-ordinated behaviour with regard to fees for these services.
- Not to directly or indirectly instruct or recommend to GPs to withhold services from life insurance companies in breach of competition law, or otherwise facilitate co-ordinated behaviour in breach of competition law regarding the response of GPs to particular proposals on fees to be charged for services provided to life insurance companies by GPs.
- Not to issue any communications to its members that directly or indirectly instruct or recommend to GPs to withhold services from life insurance companies in breach of competition law, or otherwise facilitate co-ordinated behaviour in breach of competition law regarding the response of GPs to particular proposals on fees to be charged for services provided to life insurance companies by GPs, including but not limited to PMARs and medical examinations.
- Not to directly or indirectly discourage its members from individually negotiating with life insurance companies.
- Not to indicate to life insurance companies that its members will refuse to supply services to the life insurance companies if they do not accede to the fee levels and/or increases sought by the IMO.
- Not to encourage, suggest, advise or otherwise induce or attempt to induce any third party to engage in any action that would be prohibited if carried out by the IMO by the terms of this agreement.
As part of the settlement terms, the IMO agreed to payment of the Authority’s costs in the proceedings. The settlement agreement is in full and final settlement of all claims arising out of the alleged facts and matters pleaded in these proceedings, but does not constitute any admission of a breach of Irish Competition law or of any of the alleged facts.
