COMMISSION STAFF WORKING DOCUMENT Progress by Member States in reviewing and eliminating restrictions to Competition in the area of Professional Services {COM(2005) 405 final}
Date: 2005-09-05
Institutions: European Commission
Subjects: competition, competition law, liberal profession, professional association, provision of services, services of general interest













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52005SC1064R(01)

COMMISSION STAFF WORKING DOCUMENT Progress by Member States in reviewing and eliminating restrictions to Competition in the area of Professional Services {COM(2005) 405 final}  /* SEC/2005/1064 final/2 */  









EN
(...PICT...)|COMMISSION OF THE EUROPEAN COMMUNITIES|
Brussels,  5.9.2005
SEC(2005) 1064
 
COMMISSION STAFF WORKING DOCUMENT
Progress by Member States in reviewing and eliminating restrictions to Competition in the area of Professional Services {COM(2005) 405 final}
Table of Contents
1. Introduction 3(...)2. E conomic analysis: better defining the public interest 3(...)2.1 The characteristics and needs of business users 4(...)2.2 The characteristics and needs of households 4(...)2.3 The characteristics and needs of the public sector 5(...)2.4 Evidence from available data 6(...)2.5 Key finding of analysis 7(...)3. Activities in 2004/05 by the Commission and national competition authorities 7(...)3.1 Commission activities 7(...)3.2 National competition authorities activities 8(...)4. P rogress by national regulators and professional bodies to reform 10(...)4.1 Entry restrictions and reserved tasks 10(...)4.2 Business structure regulation 16(...)4.3 Fixed prices 18(...)4.4 Recommended prices 20(...)4.5 Advertising restrictions 21(...)5. E nforcement by the  C ommission, national competition authorities and national courts 22(...)6. Conclusions 24(...)1. Introduction
1. The Commission Report on Competition in the Professions published in February 2004 The Report is available at:  http:// www. europa.eu.int/comm/competition/liberal_professions/final_communication_en.pdf  (hereafter referred to as the ‘2004 Report’) targeted six professions -  lawyers, notaries, engineers, architects, pharmacists  and accountancy   (including the neighbouring profession of tax advisers ) .  This Report  provides a detailed  outline  of  progress made  during 2004/05  by Member States  in the review and removal  of  “ unjustified restricti ons ” In the 2004 Report, the Commission suggested that a  proportionality test  should be used to assess to what extent  anti-competitive professional regulations  and rules  truly serve the public interest  and can be objectively justified .  The 2004 Report suggested that for this purpose it would be useful that  each rule  had  an explicitly stated objective and an explanation  of  how the chosen regulatory measure  was  the least restrictive mechanism to effectively attain th e stated  objective . The Commission invited all to work in partnership – r egulatory authorities in the  M ember   States and professional bodies  -  to review existing rules taking into consideration whether those rules are necessary for the public interest, whether they are proportionate and  whether they are  justified.  For the purpose of this Report, those restrictions that do not meet the proportionality test, as suggested in the 2004 Report, are called ‘unjustified’ or ‘disproportionate’.  on competition  in  the se   six prof essions .   Section 2 deepens the economic analysis of the Commission’s  2004  Report .  Section 3 explains the activities carried out by the Commission and national competition authorities. Section 4 examines the progress made in eliminating, or re view ing  unjustified As defined in footnote 2 above.   rules and regulations, in the five main categories of restriction featured in the  Commission’s  2004 Report  (i) fixed prices, (ii) recommended prices, (iii) advertising regulations, (iv) entry requirements and reserved rights, and (v) regulations governing business structure and multi-disciplinary practices.  Section 5 relates recent cases carried out by the Commission and within the European Competition Network.[1][2][3]
The Report is available at:  http:// www. europa.eu.int/comm/competition/liberal_professions/final_communication_en.pdf
In the 2004 Report, the Commission suggested that a  proportionality test  should be used to assess to what extent  anti-competitive professional regulations  and rules  truly serve the public interest  and can be objectively justified .  The 2004 Report suggested that for this purpose it would be useful that  each rule  had  an explicitly stated objective and an explanation  of  how the chosen regulatory measure  was  the least restrictive mechanism to effectively attain th e stated  objective . The Commission invited all to work in partnership – r egulatory authorities in the  M ember   States and professional bodies  -  to review existing rules taking into consideration whether those rules are necessary for the public interest, whether they are proportionate and  whether they are  justified.  For the purpose of this Report, those restrictions that do not meet the proportionality test, as suggested in the 2004 Report, are called ‘unjustified’ or ‘disproportionate’.
As defined in footnote 2 above.
2. economic analysis:  better defining the public interest
2. T he Commission concentrated on a limited number of professions  in the 2004 Report and its analysis considered the  markets for each of these professions as a whole with no attempt to differentiate the different types of markets and actors involved.   F ollowing fu rther reflection and discussion with professionals, users and Member States (competiti on and regulator y authorities ),  the Commission  has come to  the  conclusion  that it would be useful to refine and deepen this analysis and, in particular, give further consideration to what is meant by the public interest in different markets. This would facilitate a better understanding of the interplay between supply and demand for each professional service under consideration. Th is  section  does this by  identify ing  in general terms  the different groups  who  are  buying or using  professional  services, and then  consider ing   more precisely how existing regulatory practice impacts on these  groups .
3. In general, the  users of professional services  can be categorised into three broad  groups or  headings: ( i)  business, ( ii ) the public sector ,  and ( iii ) households. Of these, some professional services will be required only by business and the public sector (e.g. most engineering services), and others only by private households (e.g. services supplied by pharmacists). In many other cases the same service is required by all users, but with differing levels of complexity (e.g. real estate and tax consultancy services).
2.1. The characteristics and needs of business users
4. Big business  normally require s  a service that is tailored to their needs. This requires flexibility and personalised attention by service providers.  Usually contracts are large and  complex  and negotiation covers not only price, but also quality and service level.  Fixed prices or fee scales are therefore often less important.
5. It is less clear how  small business  fits into this picture and whether  it is  more comparable  to  big business or private household  user s. On the one hand, while  small businesses  might not have enough internal  expertise  to be considered  ‘ expert ’ users , they are nonetheless repeat users of professional services and should be able to  reduce  the information asymmetry. On the other hand, they do not have the negotiating power  of  big business.   Further economic analysis is needed to consider in more detail the  needs of  small business.
6. This leads to the broad conclusion that  the issues to be considered in analysing the public interest  in terms of business users may  not   so much  be  linked to the typical argument of asymmetry of information, but rather to ‘flexibility’  or ‘innovation’  argument s .  Business users want flexibility .  This may include  outsourc ing,  or  undertaking  in-house ,  certain  categories of  activities ,  and also being able to choose and mix service p roviders .  There is also a demand for more tailored services, and given the possibility, professionals would  also likely  find innovative ways of meeting their needs.  To make this possible certain regulatory restrictions may need to be removed. It may also call for controls to maintain  independence and avoid  conflicts of interest; such conflicts  could occur when the same professional  is p rovid ing  services which  sh ould be independent of  each  other  ( e.g. accountancy and audit ) .
2.2. The characteristics and needs of households
7. As a generalisation, households are considered as not requiring services in a continuous manner and  can be characterised as  one-off customers. One-off customers are primarily hindered by  a  lack of information. The y   may  indeed have difficulty in finding a good pr actitioner  and  assessing their  quality.  Consequently, to  some extent it is reasonable to assume that asymmetry of information will always remain a problem for this kind of customer.
8. In trying to understand the view and needs of consumers, the Commission has started to talk to consumer associations specifically about the profession al service s sector.  It has  also  had access to s urveys carried out by consumer organisations across Europe These covered the legal profession in Scotland; lawyers in Italy and Belgium; notaries in Italy, Belgium and Spain; pharmacies in Spain, Scotland and Germany; estate agents in Scotland and Belgium.   on the professions.[4]
These covered the legal profession in Scotland; lawyers in Italy and Belgium; notaries in Italy, Belgium and Spain; pharmacies in Spain, Scotland and Germany; estate agents in Scotland and Belgium.
9. From these contacts, it  is clear  that there is an asymmetry of information which makes it difficult for the consumer to choose  a  professional . This is often due to their not having the expertise, or access to information, to be able to gauge  ex ante the competenc y , experience and  level of  professionalism of a pr actitioner .  This  difficulty is  exacerbated  by prohibitions or  undue  restrictions  on a dvertising   by professionals.
10. Consumers  are also particularly eager to get  information on the costs of  a  professional service ex ante  -  at the moment of giving the mandate  -  and lament the lack of its availability. In some cases customers would like to know  the exact cost of a service  in advance. Th is is often the rationale given for using  fixed price s ,   which  it is argued allow  ‘consumer s   to  know  in advance  how much  they  will have to pay’.
11. A problem which particularly worries consumers is the  accountability  of the professional and  the procedure  in case of conflict. This problem is  complicated  by the fact that a professional has an obligation  as to the  means  employed , not  an obligation as to the result achieved . In this area consumer organisations believe that compulsory professional insurance should be  viewed  positively  fro m the perspective of helping to protect both the prof essional and the consumer.  They also  regard  qualitative entry controls  as a way of  safeguarding  quality  and professionalism.
12. In all of these scenarios, the key challenge seems to be finding ways to address   the existing or perceived information gap between the professional and the consumer ,   irrespective of the current regulatory framework .  Consumers want  more information in order  to be able to make informed choices. This means finding new and better ways to give them more information about services on offer and looking afresh at regulatory frameworks to see how this can be achieved.  
13. Other considerations  raised in the consumer surveys relate  to  the need to ensure greater acc essibility to professional services by the whole population. This argument is brought up particular ly  concerning access to  legal advice and representation.
2.3. The characteristics and needs of the public sector
14. Finally,  there is  the public sector. For the technical professions  (e.g. architectural and engineering services)  the public sector is  often  the main  user . In general, the public sector buys services via public tenders . A p rovider  is usually chosen under strictly  defined procedures and is then paid by the public purse. To ensure proper accountability to the tax payer, the procedures are consequently more cumbersome than th ose used in the private sector.
15. The public sector in many countries favours the existence of fixed or recommended tariffs whether by law or as internal reference points.  For example in  some Member States , recommended architectural tariffs still exist only for public works. It  is also true that the move towards market oriented mechanisms for provider selection in the public  sector  is relatively recent in some countries. It seems that a change of approach to public administration in general would be necessary to bring about the   removal of  much of the  existing restrictive regulation.
16. That said  i t is  doubtful  whether the public sector as a buyer needs  a different method of  assess ing the  public interest than th at carried out for  other users . In a context of competitive bidding for a public tender, the public sector could be considered as a repeat, informed customer, much the same as a business customer.
2.4. Evidence from available data
2.4.1. By type of client: Business, public sector and private households
17. The following pul ls  together disparate data from European and  n ational sources  to show the level of use  of business  services by business, the public sector and private households. Table 1 gives an overview of these statistics for  (i)  the accountancy/audit, business and management consultancy  sector ,  and  (ii)  technical service sector. It shows clearly that the largest users in economic terms of business services  in both sectors  are business users.
Table  1
|Accountants and  related activities|Architects and related activities|
Business|86%|72%|
Public sector|6%|15%|
Private households|8%|13%|
Source: Eurostat, architectural and engineering activities and related technical consultancy, Pekka Alajääskö and Owen Blackburn, Statistics in Focus 11/2004, and accounting, book-keeping, auditing activities, tax consultancy and business and management consultancy, Pekka Alajääskö, Statistics in Focus 24/2004.
18. In the legal sector too the  majority  of turnover  of  law firms is shown as coming from  business . For example,  a study  by  the Law  S ociety Law Society, Findings from the Law Society’s 2001 Business Survey, (2002).   of  England  and  Wales reports that in a sample of 585 solicitors firms ,  37% of gross fee income in 2001 was from private individuals ,  and 42% from  the  private sector and public sector organisation s .  A  study carried out by INDECON INDECON (2003) INDECON’s Assessment of Restrictions on the Supply of Professional Services, prepared for the Competition Authority, Dublin, March 2003.  for the  c ompetition  a uthority in Ireland  in 2003  report s   similar findings. It finds  that the  average  percentage of fee income from business clients for solicitors is 33%. In the case of barristers just under half of the fee income  comes  from business clients,  while  for professional engineers the figure is 79% and for architects it is 66.7% .[5][6]
Law Society, Findings from the Law Society’s 2001 Business Survey, (2002).
INDECON (2003) INDECON’s Assessment of Restrictions on the Supply of Professional Services, prepared for the Competition Authority, Dublin, March 2003.
19. P rofessional associations  also estimate that  their members work mainly for  business or the public sector  rather than one-off users The Architects Council of Europe estimates that their members work 40% for businesses, 40% for the public sector and 20% for private households. Engineers estimate that they work equally for the public and the private sector (but not for private households). German tax advisors estimated their clients to be 75% business and 25% household. .[7]
The Architects Council of Europe estimates that their members work 40% for businesses, 40% for the public sector and 20% for private households. Engineers estimate that they work equally for the public and the private sector (but not for private households). German tax advisors estimated their clients to be 75% business and 25% household.
2.4.2. By frequency of demand: Repeat vs. one-off consumers
20. The INDECON report also has  useful  information on  the  frequency of use of professional services  by customers. In the report business c ustomers  are represented through a survey of insurance companies and private households by a random sample of members of the public. It too shows that business customers are by far the most frequent users.  In the case of solicitors, 51% of private households had not used one in the previous five years This contrasts with a Law Society survey of the public in England & Wales published in 1989 which reported that only 32% of the adult population had consulted a solicitor in the previous 3 years.  and a further 33% not more than  five   times over that period, whereas for insurance companies the corresponding figures were 7.7% and zero. 69.2% of insurance companies had used solicitors more than twenty times in the previous year. In the case of barristers 98% of the private households sample d  had used a barrister less than five times in the previous five years, whilst 54% of the insurance companies had used a barrister more than  twenty  times per year.  A study used by the  Italian Antitrust Authority  confirms these findings in the case of legal services LA REGOLAMENTAZIONE DEI SERVIZI PROFESSIONALI ASPETTI SETTOR I ALI , Autorità Garante della concorrenza e dei mercati. : w hen individual citizens consult a lawyer, in the vast majority of cases (75%) it is  a   one - off consulta tion , while  business customers tend to consult lawyers on a  continuous  basis  (68%  of cases).[8][9]
This contrasts with a Law Society survey of the public in England & Wales published in 1989 which reported that only 32% of the adult population had consulted a solicitor in the previous 3 years.
LA REGOLAMENTAZIONE DEI SERVIZI PROFESSIONALI ASPETTI SETTOR I ALI , Autorità Garante della concorrenza e dei mercati.
2.5. Key finding of analysis
21. A  further differentiation of the markets of professiona l services   would  allow  a  better identif ication of   the public interest involved and of the degree of regulation indispensable to protect this. This can be arrived at by assessing what is needed for  the different  type s  of customer  or user . The above analysis shows that one - off users – generally individual customers and households - may have a greater need of some carefully targeted protection  (e.g.  price regulation may be needed for the lower paid to ensure proper access to  legal advice and representation  in certain areas of law ) . On the other hand, the main users of business services –   business and the public sector – may have no ,  or little ,  need given that they are better equipped to choose providers that best suit  t heir needs.  The position of small business users is however not entirely clear and further economic analysis is needed to arrive at a conclusion on this.
3. Activities in 2004/ 0 5 by the Commission and national competition authorities
3.1. Commission  activities
22. During 2004 /05  the Commission invited the European professional bodies of lawyers, notaries, accountants, tax  advisers , architects , engineers  and pharmacists to bilateral meetings to discuss the justification of existing professional rules and explore what can be done to make them  less restrictive  of competition . The level of receptiveness to reform varied between the professional bodies depending on how open and de - regulated the profession already was; some could see the benefits while others saw reform as a threat rather than an opportunity.  Professional bodies representing the  legal , notarial and  pharmacy  professions particularly ha d little appetite for change.
23. The Commission  started to  establish a structured dialogue  with national regulator y authorities ,  especially in countries where the professions are heavily regulated. A start was made on the occasion of the European Competition Network Sub-Group meeting on 14 October 2004, which brought together representatives of  national  competition and regulator y authorities .
24. The Commission also held bilateral meetings with the regulator y authorities  in some Member States (Austria, Germany, Hungary, Italy,  Poland,  Portugal  and  Spain). These meetings have provided an excellent opportunity to discuss specific national circumstances and explore possible ways to bring about change, as well as share best practice.
3.2. National competition authorities activities
25. National competition authorities have been active and a step change has been seen in their activity with the majority reporting being engaged in work in this field during 2004/05 Information on advocacy and enforcement activity by national competition authorities was collected via questionnaires. Responses have not yet been received from all national competition authorities and this may mean that the information presented is incomplete in some cases and does not reflect all relevant activity. . Competition authorities in Denmark, Ireland, Netherlands and the UK have  well established work programmes in this sector  -  Denmark as part of a wider governmental regulatory reform programme. Authorities in  Belgium,  Estonia, Hungary, Poland and Slovenia have also initiated structured work to bring reform to th e professions .  [10]
Information on advocacy and enforcement activity by national competition authorities was collected via questionnaires. Responses have not yet been received from all national competition authorities and this may mean that the information presented is incomplete in some cases and does not reflect all relevant activity.
26. A range of work has been  undertaken ,   including b ilateral discussions with national regulator y authorities  and prof essional bodies ,  and  the issuing of opinions on draft legislation, which contain provisions likely to be restrictive of competition . Competition a uthorities  have  also carried out  stocktaking exercises and sector studi es . The latter include  studies carried out by the  Danish,  Irish and UK competition authorities  covering  a range of  different professions, including the  legal profession, engineers, pharmacists and architects Other professions such as dentists and real estate agents have also been targeted. . The Polish competition authority produced a report a imed at highlighting factors that impede the development of competition in a number of professions .  The Portuguese authority has undertaken a detailed study of the  notary’s  profession  since its privatisation in 2004 to  identify  any factors restricting  competition  and is currently in the process of producing  a report to the government with proposals to remove or amend the restrictions identified.  The Netherlands has concluded a detailed stocktaking exercise on rules adopted by  the  professional bodies  of  lawyers, notaries, accountants and architects ,  and is now consulting on its findings.  The Belgium  authority is also undertaking a stocktaking/investigation into rules existing in a range of professions, including lawyers and notaries , and the Czech Republic reports having undertaken a stocktaking exercise of rules  in  six professions and consulting a range of national regulatory authorities . [11]
Other professions such as dentists and real estate agents have also been targeted.
27. Cyprus reports having informal bilateral discussions with regulatory authorities ,  and Greece  have  been in contact bilaterally with the professional bodies ,  and  the   national regulator y authority ,  with responsibility for the legal  and notarial  profession s . Germany ,  Italy  and Hungary  ha ve  met with various regulator y authorities  and professional bodies to draw their attention to restrictive rules and laws  and promote change . Following discussions, Italy has been successful in getting the professional bodies for architects and notaries to review their rules on advertising. Finland wrote to a range of actors to flag the findings of the Commission’s 2004 Report and seek views. Belgium has reviewed  certain  ethical rules issued by the accountancy and tax advisers’ professional body for compliance with competition law.
Ex ample s of analytical studies in the sector  of professional servicesPolish  s tudy The Polish study can be found at:  http:// www.uokik.gov.pl/pl/ochrona_konkurencji/analizyrynku /The Polish study can be found at:  http:// www.uokik.gov.pl/pl/ochrona_konkurencji/analizyrynku /In the wake of the Commission’s  2004 Report , the  Polish competition authority  undertook a detailed study into restrictions existing in  five  professions  - b arristers ( a dvocates) , l egal  a dvisers , n otaries , pharmacists and t ax  a dvisers .  The study gives a useful insight into the structure and regulation of the professions in Poland. Its objective was to highlight the factors that hinder the development of competition in the sector.  The  overall conclusion was that the regulation of the professions in Poland was  excessively restrictive , especially in the field of legal services. Practices   found included barriers to entry, price fixing or recommended pricing, advertising prohibitions   and business  structure  restrictions. The  study  concluded that many of these were often disproportionate, unjustified and unnecessary to protect the public interest. The study was published in   May 2004. Consideration is currently being given to extending the study to include other professions covering the real estate sector, dentists and others yet to be decided .Irish study on the legal profession The Irish study can be found at:   http://www.tca.ie/professions/legal_report_executive_summary.pdfThe Irish study can be found at:   http://www.tca.ie/professions/legal_report_executive_summary.pdfThe  Irish  competition authority published its preliminary report on competition issues associated with legal services in Ireland on 24 February 2005. The report finds that the legal profession is permeated  with  “ unjustified and disproportionate restrictions on competition ” . It analyses these restrictions and examines whether they are necessary, consistent and proportionate with the public interest objectives   claimed. The transparency and accountability of the regulato ry  system that   applies to the legal profession is also examined.  The study p roposes significant reform  to  the regulation of legal services and makes over  forty   proposals to remove or amend   the  r estrictions  identified .  |
28. National competition authorities have also pre-empted the adoption of new anti-competitive legislation in this sector. Lithuania intervened on an amendment to the pharmaceutical law to flag concerns about anti-competitive provisions on ownership, advertising and entry. It has also made a proposal to the government  to  abolish fixed minimum prices  for notaries . Hungary has  likewise  submitted a proposal  to amend   the  Notaries Act,  proposing that  the scope of reserved tasks and the use of fixed tariffs  be reviewed . Latvia reports intervening on amendments to the Notary Law to object to the use of fixed fees.
29. This work has resulted both in change to remove  anti-competitive  restrictions and  been a key factor in  the setting up of government sponsored committees - for example in  Denmark and  the UK on the legal professions - to consider in detail recommendations made and bring forward proposals for more radical change.  
30. Also ,  of  note was the Luxembourg Presidency  European Competition Day on 3 May 2005.  This was  dedicated to the topic of the professions and  organised by the  Luxembourg competition authority together with the responsible ministry .   It  brought together  a range of  representatives from the  national competition authorities,  national administrations and professions f or a day in Luxembourg  to discuss work in this area.
Denmark’s de-regulation project Further information on the Danish de-regulation project can be found at:  http://www.ks.dk/english/publications/2004/KBR-notat/Further information on the Danish de-regulation project can be found at:  http://www.ks.dk/english/publications/2004/KBR-notat/In 2003 the Danish government launched a de - regulation project aimed at reducing the number of rules restricting competition in Danish law. The project’s objective was to analyse a number of selected areas and identify possible changes to regulation that restricted competition unnecessar il y i.e. without deviating from other public interest considerations such as  protecting  consumers, health etc. The analyses were carried out by the Danish Ministry of Economics and Business Affairs, the Danish  C ompetition Authority and the Danish Ministry of Finance in co - operation with other relevant ministries.  Twelve  areas were analysed including dentists, legal counselling, land registration and registered surveyors. This has resulted in pro-competitive changes to existing regulation.|
31. The  EFTA  Surveillance Authority has also undertaken an analysis of the regulatory situation in the profession al service s in the EFTA countries (Iceland, Liechtenstein and Norway). The EFTA report can be found at:  http://www.eftasurv.int/information/pressreleases/2005pr/dbaFile7456.html  The professions investigated were lawyers ,  accountants, pharmacists, architects and engineers.  This was prompted by the Commission’s review of professional service s  in the EU.[15]
The EFTA report can be found at:  http://www.eftasurv.int/information/pressreleases/2005pr/dbaFile7456.html
4. p rogress by national regulators and professional bodies to reform  
32. The information in this section and the  a nnexes was gathered from national regulator y authorities  in Member States via a questionnaire . Responses were not received from all Member States and those that were varied in completeness. As a  result this may mean that the information presented is incomplete in some cases and does not reflect all  relevant activity  undertaken or underway .  This asked for a brief description of restrictions  to competition  existing in February 2004 for each of the six professions and five categories of restrictions under study, along with details of legislative or other reforms (including  to  self-regulation  by  professional bodies), undertaken or planned to remove or modify these since that date. Where restrictions remained in place  reasons  were requested.[16]
Responses were not received from all Member States and those that were varied in completeness. As a  result this may mean that the information presented is incomplete in some cases and does not reflect all  relevant activity  undertaken or underway .
4.1. En try restrictions and reserved tasks
33. Entry restrictions fall broadly into two categories – qualitative and quantitative. The former are designed to ensure that only those with appropriate qualifications and expertise can practise ,  and hence act to safeguard quality of service. They are also often closely tied to reserved rights to provide certain services. Quantitative restrictions are largely designed to safeguard access to important services.
34. P rogress in reviewing and removing overly restrictive controls on entry and the range of reserved rights  is set out in  detail in  Annex 1.
4.1.1. Quantitative restrictions
35. Strict entry controls in the form of quantitative limits (based both on demographic and geographical criteria) continue to exist in most Member States for the notary and pharmacy professions.  Only  Slovenia  and  the UK report any substantive reforms to quantitative entry controls .  Slovenia reports that the competence to make nominations, and make the final decision on notary appointments, has passed to the national regulatory authority (Ministry of Justice) from the professional body thereby introducing more State control into the process.   The UK slightly eased restrictions on the establishment of pharmacies. However, the relaxation falls short of the recommendations of the  national competition authority . 
36. Some planned activities in the pharmacy sector are reported by  France,  Latvia  and  Lithuania .  France  is planning to ask the  national competition authority for  an opinion o n  the  existing rules  contained in the professional ethical code regulating the right to establish a pharmacy, and  work is underway in  Latvia with the aim of increasing the responsibility on local administrators to ensure the availability of adequate health care in their area, including access to pharmaci es .  A draft amendment to the law on pharmacists has been prepared in Lithuania, which contains quantitative restrictions on e stablishment . These have been queried by the national com petition authority.   Belgium reports work on modifying legislation dealing with the location of pharmacies.
37. F ollowing a proposal from the national competition authority,  Hungary reports that it has plans to review the Law on Notaries ,  which amongst other things  will  consider  existing  quant it ative restrictions on notar ies .  In cluded in  Italy ’s profession’s reform project are proposals to review entry requirements to all the professions. In Italy it is recognised by all parties that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. However, the current proposals retain fixed minimum tariffs for all professions.[17]
In Italy it is recognised by all parties that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. However, the current proposals retain fixed minimum tariffs for all professions.
38. Reasons  given for retaining  quant it ative  restrictions  in both  the pharmacy and notarial  professions  focus on  the need to ensure  the  adequate provision of these services to all citizens ,   especially in remote areas ,   and  to  safeguard quality by  ensuring  practitioners  are rewarded a ppropriately  for their services .
Pharmacists in GreeceIn Greece ,  a decision to  eliminate restrictions on  the establishment of pharmacies was recently reversed in January 2005  after five years and a quota system was reintroduced .  The effects   of th e quota system  had been to provoke an  increase  of supply  of pharmacies  in Athens and a decrease of supply in the islands, thus leaving  some  islands without adequate pharmacy provision.  There is no evidence that any alternative models to encourage the continuation of a more competitive environment were considered. One  solution  to  ensur e adequate   provision to the islands   could have been  the payment of  public subsidies , in accordance with the State Aid rules,  to encourage the opening of island pharmacies  whilst maintaining the increase in supply in Athens .|
4.1.2. Qualitative restrictions
39. Qualitative entry requirements are widespread across most professions. These are often set by the State or by self-regulatory bodies  and vary between countries . As far as professional qualifications are concerned, qualitative requirements imposed by Member States are in principle acceptable under Community law (see for example Case C-55/94  Gebhard ) . In order to facilitate the recognition of professional qualifications between Member States, Community law harmonised minimum training requirements for certain professions such as architects and pharmacists (see Directives 85/384/EEC and 85/432/EEC). When qualifications have not been harmonised, mechanisms have been put in place in order to facilitate the free movement of professionals while ensuring that these measures would not undermine quality: Community law allows host Member States to ensure a priori that the qualifications of migrants willing to work on their territory match national requirements for the same activity (see Directives 89/48/ EEC, 92/51/EEC and 1999/42/EC).   There has been progress on developing the current framework for mutual recognition of qualifications with respect to the professions with the adoption of a new Directive on recognition of professional qualifications on 6 June 2005. Details on  the  new Directive on recognition of professional qualifications can be found at:   http:// www. europa.eu.int/c o mm/internal_market/qualifications/future_en.htm  The Directive, proposed by the Commission in the framework of the Lisbon agenda, consolidates and improves the current regime of mutual recognition of professional qualifications. It simplifies cross-border provision of services. The Directive grants effective free movement of fully qualified professionals throughout the EU while guaranteeing the protection of consumers.[18][19]
As far as professional qualifications are concerned, qualitative requirements imposed by Member States are in principle acceptable under Community law (see for example Case C-55/94  Gebhard ) . In order to facilitate the recognition of professional qualifications between Member States, Community law harmonised minimum training requirements for certain professions such as architects and pharmacists (see Directives 85/384/EEC and 85/432/EEC). When qualifications have not been harmonised, mechanisms have been put in place in order to facilitate the free movement of professionals while ensuring that these measures would not undermine quality: Community law allows host Member States to ensure a priori that the qualifications of migrants willing to work on their territory match national requirements for the same activity (see Directives 89/48/ EEC, 92/51/EEC and 1999/42/EC).
Details on  the  new Directive on recognition of professional qualifications can be found at:   http:// www. europa.eu.int/c o mm/internal_market/qualifications/future_en.htm
40. F our   countries  report substantive change  ( Italy,  Latvia ,  Lithuania   and Slovakia )  to qualitative restrictions  to facilitate entry to the legal ,  notarial  and  technical  profession s ,  but  these  seem to be of relatively low impact . However, w ork planned or currently underway  by one or two countries  promises  to have a higher impact  in a number of professions .  
41. Italy  has  relaxed qualitative entry requirements to allow architectural and engineering graduates ,  who have completed a  three y ear university course ,  to perform some reserved tasks previously only open to those having completed the  five  year course.  Slovakia  likewise  reports having eased entry requirements for architects by reducing the level of professional  experience  required. 
42. Latvia reports  relax ing   entry  controls to the notary  and legal  profession s  by reducing the level of professional experience  required,  and those with doctorates are no longer required to take the professional entry examination to enter   the legal profession . Lithuania  likewise   report s  easing entry criteria for lawyers   so that those with significant relevant professional experience  do not  have to take the professional entry examination. 
43. Poland  reports  ongoing discussions on draft legislation to remove sole control of the entry examinations for  the legal profession  from the professional bodies ,  thus providing greater transparency and independent management of the  entry  process.  The draft legislation also contains proposals to lower mobility barriers between the legal professions and create more avenues for entry.  In the   UK entry requirements to the  Scottish  legal profession are under review as part of the wider review of Scottish legal services . A government commission in the Netherlands has been set up  to consider the Law on Notaries ,  which will review the way notaries are appointed.  Work is also underway  to allow candidate notaries to work as employees for existing notaries th ereby  increasing accessibility to the profession  in the Netherlands .  
44. As noted above,  Italy ’s profession’s reform project  covers access requirements to  all the professions .  The UK reports that a   general review of regulation in the construction sector is underway.  Portugal is reviewing the law which regulates qualitative entry requirements for technicians (including architect ural and  engineer ing tech n icians )  involved in construction projects ,  and is also  reviewing  some of the other legislation in the construction  field .  Slovakia is planning to review the law in the field of civil engineering to simplify procedures and r e duce professional discrimination.  France has started a project to modernise the architectural profession . I reland reports that it is considering reserving the title of ‘architects’ in such a way as to include practically trained as well as academically trained architects.  Luxembourg  has  passed legislation to free up entry requirements with respect to the professions of landscape and interior designers.  
45. Finland  reports that  new legislation on auditing  is  being prepared . Estonia ,  Lithuania  and Slovenia  are  planning new auditing legislation to c omply with the  new EU  A uditing Directive See Commission p roposal  for a Directive on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC. This can be found at:  http:// www. europa.eu.int/comm/internal_market/auditing/officialdocs_en.htm   when adopted , which  could change some of the current restrictions .   It is reasonable to assume that other Member States too  may  review existing  legislation  in the auditing field  as a result of the adoption of th is   new Auditing Directive.  In Italy work is underway to merge into one the two existing professional bodies  in the  accountancy  sector .  Spain plans to reform entry requirements for auditors.  The  UK  reports having drawn up  new draft ethical guidelines for auditors taking into account competition concerns to ensure that they do not affect the ability of smaller companies to compete for the business of larger clients.  [20]
See Commission p roposal  for a Directive on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC. This can be found at:  http:// www. europa.eu.int/comm/internal_market/auditing/officialdocs_en.htm
46. Conversely, Luxembourg reports tightening of the entry requirements for accountants so that in future entrants will have to pass a professional test.   Lithuania reports that educational entry requirements have increased for auditors.  In  Cyprus consideration is being given to increasing the level of professional experience required to qualify as a lawyer .  Spain is planning to reform entry controls for lawyers by introducing a professional entry examination . Estonia reports a new law ,  which  introduced  a registration system for those wishing to pract i se as pharmacists ,  with the aim of ensuring that entrants have the necessary competence .   Germany has also increased entry requirements for pharmacists   and  those  wishing to practise in public or hospital pharmacies  must  now  prove  that  they have a sufficient knowledge of the German language and law.  Hungary has increased entry requirements for architects  and engineers ,   and entrants  must  now  pass a registration examination to become licensed and gain entry to the professional bod ies .  
47. Reasons given for the need to retain qualitative entry controls centre on the need to safeguard quality of services for the end user who is often not in a position to assess such quality ,  and protect the reputation  and integrity  of the profession.  
4.1.3. Reserved tasks
48. The scope of reserved tasks varies considerably between Member States and professions.  No  Member State reports  substantive progress in changing the scope of reserved  rights , although w ork  is planned or underway in a number of countries in respect of  the legal profession  which could lead to  change in  some key reserved  areas . 
49. These include a committee established in Denmark to  consider the  current regulation of lawyers , including  lawyers ’   exclusive right  to represent parties before courts, and a German project with the aim of reviewing existing legislation to broaden its scope  to allow others rather than just lawyers to provide legal advi c e /counselling  in certain areas. 
50. In the Netherlands there are plans to establish a  government  commission for lawyers to consider a range of issues ,  including the lawyer’s monopoly to represent parties in court , and the  government commission on notaries will  also  consider the scope of the legal monopoly/reserved  tasks  of  the notarial profession.  The  proposals under discussion in Poland p rovide for the creation of a ‘routine’ legal service s  sector  by removing the exclusive right of legal advisers and advocates to provide legal advice and services (representation in court would however remain a reserved area).  In the UK the review of Scottish legal services is considering the extension of the rights of audience and rights to conduct litigation in the higher courts.  Hungary plans to review the Law on Notaries, including the scope of reserved tasks.  Conversely, Portugal has introduced a law which reinforces lawyers’ exclusive right  to represent parties in court.
51. In other fields,  the planned  changes to  legislation  in the  auditing  field as a result of the  proposed  new Auditing Directive  could change some of the current res erved areas ,  as could the ongoing work by  some Member States  in the construction  sector . T he Netherlands is reviewing the exclusive rights of pharmacists ,  and  Sweden reports an ongoing review of the State retail monopoly on pharmaceutical products following the ruling by the European Court of Justice Case C-438/02  Hanner . This monopoly prevents individual pharmacists from competing in the retail market for pharmaceutical products .   Portugal  is  plan ning  to free up the distribution and sale of over the counter medicines hitherto only supplied by pharmacists .  France is considering modifying the law to remove certain products from the monopoly list  so they can be sold outside pharmacies .  Belgium also reports work to  modify  the scope of pharmacist’s reserved tasks. [21]
Case C-438/02  Hanner
4.1.4. The case for the review of entry controls and reserved tasks
52. D isproportionate As defined in footnote 2 above. q uantitative  and  qualitative entry  controls ,  and the giving of reserved rights  can constitute  severe restrictions on competition. Overly  restrictive  regulation on what services can be provided and by whom  may  inhibit competition and the evolution of new types of services and products.  This  could  lead to consumers not getting the choice in prices and services that would otherwise be available, or even  their  opting out and choosing not to avail themselves of services on offer.[22]
As defined in footnote 2 above.
53. While the Commission accepts that each Member State should be allowed to determine the level of qualification needed for entry to a profession in that country, such  entrance requirements should be  proportionate a nd reflect what is actually required to be able to perform the relevant service to an acceptable standard.  
54. Poland  provides an  example  of where  excessive  qualitative  entry  requirements  in the legal profession have had a negative impact on consumers. See the  Polish  competition authority’s s tudy at:  http://www.uokik.gov.pl/download/Raport%20wolne%20zawody.doc  Figures show that increases in the  number of advocates has  been well outpaced by the growth in the  number of court cases . I t is  estimated that  the  number of  court  cases  in Poland  more than tripled  during the  1990s while the number of  advocates  increased only slightly   from 69 00  to 74 00.   It is widely contended that this has resulted in consumers choosing to go without professional l egal advice and representation . This is  likely due to higher prices  being charged for legal services  than would  have been  the case  with  greater numbers of advocates in the market place,  and  difficulties of access to  services .  [23][24]
See the  Polish  competition authority’s s tudy at:  http://www.uokik.gov.pl/download/Raport%20wolne%20zawody.doc
I t is  estimated that  the  number of  court  cases  in Poland  more than tripled  during the  1990s while the number of  advocates  increased only slightly   from 69 00  to 74 00.
55. The unjustified giving of reserved tasks can  have similar impacts on consumers by depriving them of new services and providers, and importantly,  greater choice and  lower prices.   Some countries have seen the clear benefits to be derived from  reducing the  range of reserved  tasks   and in so doing  have  creat ed  new professions and innovative ways of providing services. For an interesting critique on the need to modernise the two professions of pharmacists and notaries to meet modern demands - especially in relation to the most standard services - see paper by  Prof. Benito Arruñada,  ‘Managing Competition in Professional Services and the Burden of Inertia’, 2004 EU Competition Law and Policy Workshop Proceedings. The paper can be found at:    http://www.iue.it/RSCAS/Research/Competition/2004/200409-compet-Arrunada.pdf .[25]
For an interesting critique on the need to modernise the two professions of pharmacists and notaries to meet modern demands - especially in relation to the most standard services - see paper by  Prof. Benito Arruñada,  ‘Managing Competition in Professional Services and the Burden of Inertia’, 2004 EU Competition Law and Policy Workshop Proceedings. The paper can be found at:    http://www.iue.it/RSCAS/Research/Competition/2004/200409-compet-Arrunada.pdf .
(...PICT...)
56. One example  of where this approach has proved beneficial  is  in the area of  conveyancing services (i.e. transfer of property).  Countries such as the Netherlands, UK and Australia have removed the monopoly rights for lawyers in this area. This has  delivered benefits to consumers  resulting in  price falls and a wider range of services providers.  I n many  other  Member States this field remains a reserved area of activity for the legal  and notarial  profession s .
57. The Commission  Services  invites  Member States to review the continuing maintenance of  disproportionate As defined in footnote 2 above.   quantitative  and  qualitative  entry requirements ,  and  to  review the  range of reserved tasks with a view to  reducing them wherever  feasible .   In particular, when restrictions are deemed necessary to protect end consumers, increase their confidence, ensure accessibility and reduce transaction costs, Member States are encouraged to consider possible alternatives which safeguard the interest of consumers without depriving them of the benefits of a more competitive environment. The introduction of specific regulatory requirements for consumer transactions, where appropriate, may also deserve further consideration.[26]
As defined in footnote 2 above.
Conveyancing services: An illustrative example of how  removing  monopoly rights has benefited consumersIn the UK  this monopoly right for lawyers was revoked in 1985   and by 1987 the first licensed conveyancers who were not lawyers had emerged  and were operating in the market.   This lead to  prices falls in the 1990s. In addition, providers are also now ready to give fixed quotes to consumers who may shop around. See UK government c onclusions on the matters raised in  its  consultation paper,  " In the public interest? "  July 2002. These can be found at:  http://www.dca.gov.uk/consult/general/oftreptconc.htm#part6  In the Netherlands, research The study by Fred Bruinsma can be found at:  http://www.uu.nl/content/dutchlawinaction2003.pdf  found in 2002 that conveyancing fees  ha d  fallen  as a result of introducing more competition . While, for Australia, research The study by J.Baker of the Justice Research Centre can be found  a t:  http://www.lawfoundation.net.au/publications/research/cfcm/cfcm_rep.pdfker.J.  in 1996 found that the introduction of competition in conveyancing resulted in a reduction of fees of 17% in real terms.See UK government c onclusions on the matters raised in  its  consultation paper,  " In the public interest? "  July 2002. These can be found at:  http://www.dca.gov.uk/consult/general/oftreptconc.htm#part6The study by Fred Bruinsma can be found at:  http://www.uu.nl/content/dutchlawinaction2003.pdfThe study by J.Baker of the Justice Research Centre can be found  a t:  http://www.lawfoundation.net.au/publications/research/cfcm/cfcm_rep.pdfker.J.|
4.2. Business  structure  regulation
58. Significant restrictions on the  way professionals can practise continue to exist across  most  Member States .   Professionals are often required to practise as individuals or in partnership with others in the same profession, and incorporation is widely forbidden. Even where incorporation is permitted, the 50% rule is common whereby  persons  in  the same profession ,   or  those professionals  actually  practising  in  a  firm,  must  have  the majority of share capital or voting rights.  R estrictions are most widespread in the legal , notarial  and pharmacy sector s . The usual  reason  given for these is to protect the independence of the profession and quality of service. In Case C-309/99  Wouters  the ECJ recognised that a rule in the ethical code, which prohibited  partnership  between lawyers and accountants in the Netherlands,  could reasonably be considered  necessary for the proper practice of the profession as organised by the Member State concerned, despite the effects restrictive of competition that were inherent in it, and did not infringe the EC competition rules. It arrived at this conclusion having considered several factors, including the specific national set-up and whether the rule was proportionate in these circumstances.[30]
In Case C-309/99  Wouters  the ECJ recognised that a rule in the ethical code, which prohibited  partnership  between lawyers and accountants in the Netherlands,  could reasonably be considered  necessary for the proper practice of the profession as organised by the Member State concerned, despite the effects restrictive of competition that were inherent in it, and did not infringe the EC competition rules. It arrived at this conclusion having considered several factors, including the specific national set-up and whether the rule was proportionate in these circumstances.
59. Two countries ( France  and Slovakia)  report  positive substantive reform  (see Annex  1 ) .  France  reports some relaxation of  the  ownership  rules  in the legal   and notarial   profession s .   Slovakia reports that rules on the establishment of pharmacies were relaxed opening the way for pharmacies to be established by non-pharmacists (although health care professionals entitled to issue prescriptions are still barred from opening or owning shares). There are also plans by Slovakia to allow the entry of chain pharmacies.  Conversely, Estonia reports that a new law introduced  prohibits  the ownership of pharmacists by drug manufacturers and health care professionals  entitled to issue prescriptions.
60. Work is  however  reported as being underway by a number of countries .   Austria  is  propos ing  to  open the way to  allow  architectural and engineering firms to  have a financial holding/shares  in other  firms in their  respective  sector s , and Belgium reports that work is underway to allow  architects  to form incorporated firms .  Belgium also reports that  a  study is underway to examine the options for closer/joint working between the accountancy profession and other professions e.g. lawyers.   Lithuania too reports plans to ease restrictions in the accountancy/audit sector. 
61. Germany has started review s   to consider  eas ing  restrictions in the accountancy,  engineering and  legal sectors. Italy reports that  its  reform project  includes proposals to revise business structure regulation in all professions See footnote  17 . .  B usiness structure  restrictions in the accountancy/audit field in Member States may  also  change as a result of the new Auditing Directive when adopted, and the ongoing work in the construction field by  some Member  States could  result in change in this sector.[31]
See footnote  17 .
62. The committee in Denmark on lawyers will also consider regulation on the ownership of law firms.   T he Clementi review (see box below)  in the UK  has considered the structure of the legal profession with a view to opening the way  for new and more innovative business structures in the profession.  A similar review is now also underway of Scottish legal services ,  and the Irish competition authority’s report on legal services has called on the government to radically change the structure of the profession.   The  Netherlands ’   planned  government commission  on lawyers will  consider  business structure  restrictions .  
63. The Netherlands  also  reports that  the  gradual development of a more competitive market is being encouraged in the pharmacy sector, including the entry of pharmacy chains.  
64. T his is  an area where  many  Member States shy away from reform given concerns about safeguarding the independence  of the professions .   But this should not mean that reform  cannot and should not be made, rather that it may need to be addressed in a more holistic way.   As noted above ,  t here are already  examples  of  such  a holistic approach  from  Ireland  and  the UK ,  and experience shows that  significant consumer benefits can flow from  relaxing business structure restrictions . In the US,  for example ,   relaxing controls has seen the emergence of legal  ‘ clinics ’  making access to legal advice available to consumers who would otherwise have considered lawyers too expensive.  The Commission  Services call on  Member States to pursue reform in this area  imaginatively and proactively.
The Clementi Review of legal services in the UK The Clementi Report can be found at:  www.legal-services-review.org.uk .The Clementi Report can be found at:  www.legal-services-review.org.uk .Sir David Clementi was commissioned by the UK  g overnment to undertake a wide ranging review of the regulatory framework within which the UK legal profession operates. This is particularly notable because the scope of the review in the UK is total and the potential consequences of its findings could bring about the most  significant wave of change to the UK legal profession in its history. Terms of Reference for the Review were:To consider what regulatory framework would best promote competition, innovation and the public and consumer interest in an efficient, effective and independent legal sector.To recommend a framework which will be independent in representing the public and consumer interest, comprehensive, accountable, consistent, flexible, transparent, and no more restrictive or burdensome than is  needed .Three key concerns lay behind the review:a concern about regulatory framework which was considered “outdated, inflexible, over complex and insufficiently accountable or transparent”.a concern about the complaints systems and how consumer complaints were dealt with.a concern about the restrictive nature of business structures which had changed little over a significant period of time despite changing business practices.The final Report was published in December 2004 and recommended  extensive changes to existing practices to make legal services more consumer friendly, while at the same time enabling providers to develop better, more competitive, customer-focussed businesses. P rincipal recommendations are the creation of a new oversight regulator with significant powers, the separation of the representative and regulatory functions of the professional bodies, the creation of a single new complaints body and steps to enable the creation of Legal Disciplinary Practices (LDPs) which could see for the first time non-lawyers not only as managers of legal practices, but also as owners of and investors in LDPs. The UK  g overnment will now publish a White Paper on the proposals later in 2005, to be followed by legislation as soon as  p arliamentary time allows.|
4.3. Fixed  p rices
4.3.1. Reforms undertaken or planned
65. Of the Member States with fixed prices still in operation,  Germany  is  the only  one  to report substantive  progress  (see  Annex  2)  in removing them .  It reports that fixed tariffs will be removed for lawyers for outside court work from 2006 ,  and that  the professional rules for tax consultants have been changed to allow flexible tariff setting .
66. Germany  further  reports that work is underway in respect of architects and engineers with the intention of  abolishing  fixed minimum and maximum tariffs. Consideration is also being given to re form ing  the  fixed tariff  system  in the notarial profession. Lithuania reports that it intends to launch a discussion on the replacement of fixed tariffs with maximum prices for notaries , and in Hungary, following on from the proposal of the national competition authority, the government intends to replace fixed tariffs with maximum prices.
67. Some  Member States also report a number of other changes of relevance. Slovenia  reports  that the professional body for notaries has lost competence to propose fixed tariffs and that this has passed to the national regulator y authority .  France is examining ways of reinforcing the requirement on lawyers to inform clients as fully as possible  about how fees for legal services will be calculated. Conversely,  Italy reports that new minimum and maximum tariffs were adopted for lawyers in April 2004  and that work is underway to revise tariffs for engineers and architects .  Slovakia also reports that revised tariffs were introduced for notaries  in 2005 for  some reserved tasks.
68. Factoring in the actual changes, and assuming that the planned changes are brought into effect, means that there will be no fixed prices existing in any Member State for tax  consultants/ advisers , that only  four  Member States ( Cyprus ,   Greece,  Italy  and  Luxembourg) will continue to have fixed or minimum prices for architects and engineers, and t hree  for the accountancy /audit  profession (Greece ,  Italy  and Portugal ). That means that the legal  and notarial  profession s  will be the  two  areas  where a significant number of countries continue to operate the practice of setting fixed, minimum or maximum tariffs.
4.3.2. The legal  and notarial  profession s  and fixed price s – special case s ?
69. Arguments for the maintenance of fixed prices for notaries and  the legal profession  centre on the need to protect consumers from excessive charges and protect the prestige and independence of the profession to ensure the delivery of a quality service.
70. The key concern underlying the latter  reason  is the notion that competent individuals would either leave or fail to enter the legal profession if they are not rewarded  financially, or otherwise, as befitting  their  high   level of expertise and skill s ,  and hence quality would suffer. This argument ,  however, seems unsustainable when it is considered that fixed fee scales have been largely wiped away in the other professions with no marked decline in the quality of entrants or mass exodus of existing professionals.
71. In the case of the Latin notary profession The so-called `Latin' notary  profession  (sometimes referred to as  ‘civil law notaries’)  are independent professionals who advise private parties and draft contracts on their instruction, as well as partake in the issuing of public documents, and fulfil quasi-judicial duties.  They are  appointed by the state, entrusted with public functions and hold a public office . They are not however  civil servants  and  remain independent from the state  and economically self-reliant. This profession exists in AT, BE, CZ, DE, EE, EL, ES, FR, HU, IT, LT, LU, LV, MT,  NL,  PL, PT,  S K and  SI. , it is argued that fixed prices are in fact akin to a public tax given that many notarial activities are an exercise of public authority. It is true that the notary profession is currently characterised by a general lack of effective competition stemming from significant regulation of many key aspects e.g. quantitative entry controls and advertising prohibitions. In such a highly regulated market, price regulation may be needed to protect consumers, but that does not mean  that its removal is impossible . Rather, that price  de - regulation  may need to be accompanied by other broader reforms (e.g. relaxation of entry restrictions  or removal of  certain m onopoly rights ). An example of where de-regulation in the notarial profession has taken place is the Netherlands. This has lead to the removal of many fixed fees and the easing of entry restrictions to facilitate the introduction of price competition.[33]
The so-called `Latin' notary  profession  (sometimes referred to as  ‘civil law notaries’)  are independent professionals who advise private parties and draft contracts on their instruction, as well as partake in the issuing of public documents, and fulfil quasi-judicial duties.  They are  appointed by the state, entrusted with public functions and hold a public office . They are not however  civil servants  and  remain independent from the state  and economically self-reliant. This profession exists in AT, BE, CZ, DE, EE, EL, ES, FR, HU, IT, LT, LU, LV, MT,  NL,  PL, PT,  S K and  SI.
72. Finally, it is worth reiterating that notaries are not exempt from the scope of the EC competition rules. Although the exercise of public authority is not an economic activity Case C-364/92,  Eurocontrol ,   [1994]   ECR I -0043  para 30, and C-343/95,  Calì e Figli  1997 ECR I -1547.paras 22-23. , the concept of undertaking is relative. A given entity may be engaged partially in an economic activity and partially exercise public authority . This was the case for the public employment office in Case C-41/90  Höfn er  [1991] ECR I-1979,   para. 21,  the airport authority in Case C-82/01 P  Aéroports de Paris  [2002] ECR II -3929 and the city of Trier in Case C-475/99  Ambulanz Glöckner  [2001]  ECR I-08089.  In so far as it is engaged in an economic activity, it is subject to the competition rules. Though certain activities of notaries are generally regarded as the exercise of public authority, it is clear that notaries also engage in commercial (economic) activities for which they compete with other professionals. Examples of this are the provision of legal advice and negotiation in the real estate  area .[34][35]
Case C-364/92,  Eurocontrol ,   [1994]   ECR I -0043  para 30, and C-343/95,  Calì e Figli  1997 ECR I -1547.paras 22-23.
This was the case for the public employment office in Case C-41/90  Höfn er  [1991] ECR I-1979,   para. 21,  the airport authority in Case C-82/01 P  Aéroports de Paris  [2002] ECR II -3929 and the city of Trier in Case C-475/99  Ambulanz Glöckner  [2001]  ECR I-08089.
Notaries in the Netherlands Details on the de-regulation of the notarial profession in the Netherlands can be found at:  http://www.justitie.nl/pers/persberichten/archief/archief_2003/120203commissie_monitoring_notariaat_publiceert_eindrapport.aspDetails on the de-regulation of the notarial profession in the Netherlands can be found at:  http://www.justitie.nl/pers/persberichten/archief/archief_2003/120203commissie_monitoring_notariaat_publiceert_eindrapport.aspThe Netherlands is the only country where substantial  de-regulation  of the Latin notarial profession has taken place. Since the conditions for establishment were relaxed in 1999, there are 201 more candidate notaries and notaries, and 77 more notaries’ offices. New legislation, now in the drafting stage, will  also  allow notaries who do not wish to be independent, to become employees in a notary’s office.  This de-regulation has resulted in prices  increasing  in the family law area,  but decreasing for real estate transactions . To ensure access to notarial services in the family law area by the lower paid, the Netherlands regulates prices for this group and has established fixed  maximum tariffs  in this area.  These tariffs are adjusted on a yearly basis.|
73. The Commission  Services  invites  all Member States  to take action to  review  particularly  critically all  fixed and minimum prices  with a view to removing them   wherever  possible . Price fixing does not guarantee  quality, and  may  serve to  inhibit  healthy competition between providers, discourage efficiency, or the development and introduction of new services and ways of doing things. This  could be  bad for the professions who fail to adjust to new business practices or technologies ,  and  could lead to  consumers hav ing  to pay inflated prices for mediocre level s  of service.
4.4. Recommended  p rices
74. S ubstantive change has been reported by  six  Member States  ( Austria, Hungary,  Ireland,  Lithuania, Sl ovakia  and  UK)  (see Annex  3 ) .
75. Austria reports that it has relaxed its policy on recommended prices for architects and engineers and that these have become guide lines .  Hungary similarly reports that recommended minimum tariffs have become guidelines  for architects .  Ireland reports that the professional body for architects has ceased the practice of issuing recommended fee tables during the year . C hanges have been made to the architect’s professional code  in the UK  to allow architects to revise fee quotations to take into account quotations from other competing architects.  In  Slovakia recommended prices were abolished in 2005 for tax consultants, architects and engineers. 
76. In the legal sector, Lithuania has abolished recommended prices for lawyers via a legislative amendment.  In the UK t he professional body for  Scottish   solicitors  has agreed to withdraw its recommended prices for general business.  The UK  also  reports that  fee guidance has been withdrawn by the  UK public  notar ies’  professional body . UK public notaries are to be distinguished from the Latin notary profession as defined in footnote  33 . A UK Notary Public bridges the differences between the legal systems of one nation with that of another, so as to give lawful effect to arrangements made by parties from different countries. Within the UK, a Notary Public service will usually be available through a Solicitor who has been granted the authority to act in legal matters associated with foreign jurisdictions. The Notaries Society is the representative society for the 900 or so Notaries Public practising in England and Wales.[37]
UK public notaries are to be distinguished from the Latin notary profession as defined in footnote  33 . A UK Notary Public bridges the differences between the legal systems of one nation with that of another, so as to give lawful effect to arrangements made by parties from different countries. Within the UK, a Notary Public service will usually be available through a Solicitor who has been granted the authority to act in legal matters associated with foreign jurisdictions. The Notaries Society is the representative society for the 900 or so Notaries Public practising in England and Wales.(...)77. T hree   other changes reported  are  of relevance. Luxembourg reports plans to link fees to the results of work for lawyers ,  and Slovenia ,  that recommended fees  for architects  are currently  being prepared for introduction by the  professional body.  Revised recommended prices were introduced in Slovakia for lawyers during 2005.
78. This means that some progress has been made in reviewing and eliminating recommended prices for architects, engineers, lawyers and notaries. That said, there are still a significant number of Member States with recommended prices in operation, and as with fixed prices, it is the legal  and notarial  profession s  that ha ve  the largest number.  As noted above, one  Member State even reports plans by  the   professional body  t o introduce recommended fee scales  for architects .
79. The key justifications given for maintaining recommended fee scales  centre on the need to provide a guide to  consumers  on likely costs and  protect against  what is termed ‘ unfair ’  competition  between practitioners In some countries professionals are barred from engaging in certain business practices such as price competition and advertising under ethical codes. Such practices are considered to undermine the dignity and prestige of a profession and to engage in them is deemed as ‘unfair’ competition. .  Some Member States also point to the fact that the scales are non-binding and that client and provider are free to agree a fee wi thout reference to such scales.[38]
In some countries professionals are barred from engaging in certain business practices such as price competition and advertising under ethical codes. Such practices are considered to undermine the dignity and prestige of a profession and to engage in them is deemed as ‘unfair’ competition.
80. Recommended fees and reference scales can still act to facilitate price co-ordination. There are other less distorting ways to provide consumers with a ‘guide’ to prices. For  instance, active monitoring by consumer associations on pricing and the collection and publication of survey based historical price data by independent organisations. Ways can also be developed to provide customers with  costs of the professional service ex ante, at the moment of giving the mandate.  Certainly scales which do not help the consumer to know in advance how much they will have to pay (either because of their complexity or because they are not public) are  totally  unjustifiable.   The Commission  Services urge  all involved to eliminate the use of recommended fee scales as soon as possible.
4.5. Advertising  r estrictions
81. The level of permissible advertising continues to vary considerably across Member States and professions.  F ive Member States report substantive  change  to advertising restrictions  (France, Ireland, Italy,  Lithuania and  Portugal) (see Annex 4) . The majority of these changes relate to provisions being relaxed in ethical codes  and  reflect s  the fact that a significant number of advertising restrictions are contained in   such  codes In many countries a distinction is also made between ‘publicity’ or ‘informative advertising’, and ‘advertising’ or ‘promotional pu blicity’, the idea being that a wider dissemination of information on the part of professionals is accepted, or becoming accepted, while proactive promotional advertising is still prohibited. The latter may include in particular comparative advertising, cold-calling and soliciting. However, the line between what is considered ‘informative’ and what is considered ‘promotional’ varies between countries and professions. .[39]
In many countries a distinction is also made between ‘publicity’ or ‘informative advertising’, and ‘advertising’ or ‘promotional pu blicity’, the idea being that a wider dissemination of information on the part of professionals is accepted, or becoming accepted, while proactive promotional advertising is still prohibited. The latter may include in particular comparative advertising, cold-calling and soliciting. However, the line between what is considered ‘informative’ and what is considered ‘promotional’ varies between countries and professions.
82. In the accountancy profession, France has relaxed the law to allow  informative  personal  advertising  and  work has started to bring the code of professional ethics into line.   Germany  also  reports that a review is underway of the professional body’s rules on advertising in the accountancy sector with the aim of relaxing them.
83. In Ireland advertising restrictions   have  been removed  for architects and engineers and in Italy the architect’s  ethical  code was reviewed and the restrictions relaxed.  There are also plans in place in Italy to review the engineer’s code.
84. Lithuania  and  Portugal report substantive change in the legal profession and both have freed up the effective prohibition to allow some ‘publicity’ type activities (although proactive promotional advertising is still prohibited See footnote  39  above for explanation. ). F ive  other countries report that work has started or is planned to examine  or reform  advertising restrictions  i n  the legal profession  ( Denmark ,   Estonia,  France,  Germany,  and UK  in respect of S cot tish legal services ). Greece also reports  plans  to review the legislative rules on p ublicity (but not advertising ) .  Italy reports work to  create  new ethical rules for notaries  covering  the provision of information to the public. [40]
See footnote  39  above for explanation.(...)85. In the pharmaceutical sector, two countries report having plans to review the rules  on advertising  (Hungary and France). Luxembourg ,  however, reports plans to incorporate the effective prohibition on advertising into the  professional ethical  code thus making it binding.
86. While these changes and plans are welcome, there are still widespread restrictions on advertising covering both manner  ( e.g. only  print ed advertising is  permissible )   and content  ( e.g.  comparative advertising   is  prohibited ).  Of particular note is the effective blanket prohibition on advertising in place across the notarial profession in Europe.
87. Maintenance of such restrictions  is  defended on the basis of protecting consumers from misleading claims, preventing  ‘ unfair ’  competition ,  and preserving professional integrity and independence.
88. Advertising  can  play a key role in informing and educating consumers. It provides  a  means by which they can compare and contrast services, and seek out service s  that best suit their needs and means. The existence of severe advertising restrictions in the professions   can thus make it more difficult for the consumer to know where to find an expert ,  or determine the likely price of a given service , and hence contribute to consumer ignorance and confusion . It is especially difficult to see how advertising restrictions which cover both content and manner can be justifiable. As to  protecting consumers from  misleading advertising, there is general EU-wide legislation on deceptive and misleading advertising D irective   2005/29/EC of 11 May 2005  concerning unfair business-to-consumer commercial practices in the  i nternal  m arket .   .  that serves to protect  consumers  against such abuse, so it is questionable why there is a need for further sector specific restrictions. Member States are permitted by Article 7.5 of the Directive 84/450/EEC on misleading advertising, as amended by Directive 97/55/EC, to introduce bans or limitations on comparative advertising for professional services. This is intended to safeguard the interests of professionals and competitors. Any bans or limitations introduced must however  be compatible with the provisions of the E uropean  C ommunity  Treaty  (see judgement of the Court of First Instance in case T-144/99  Institute of Professional Representatives before the European Patent Office v Commission  [2001] ECR II-01087 concerning comparative advertising) .     All advertising restrictions  allegedly based on the need to protect consumers against unfair claims, other than those foreseen in the EU unfair commercial practices legislation, should be reviewed urgently .  Advertising restrictions  designed  to protect against unfair competition ,  and preserv e  the dignity and integrity of the profession ,  should also be reviewed to ensure they  are  justified and proportionate As defined in footnote 2 above. .[41][42][43]
D irective   2005/29/EC of 11 May 2005  concerning unfair business-to-consumer commercial practices in the  i nternal  m arket .   .
Member States are permitted by Article 7.5 of the Directive 84/450/EEC on misleading advertising, as amended by Directive 97/55/EC, to introduce bans or limitations on comparative advertising for professional services. This is intended to safeguard the interests of professionals and competitors. Any bans or limitations introduced must however  be compatible with the provisions of the E uropean  C ommunity  Treaty  (see judgement of the Court of First Instance in case T-144/99  Institute of Professional Representatives before the European Patent Office v Commission  [2001] ECR II-01087 concerning comparative advertising) .  
As defined in footnote 2 above.
5. e nforcement by the  c ommission ,  national competition authorities  and  n ational courts
89. In June 2004 the Commission issued a decision condemning the recommended minimum fee scale operated by the Belgian Architects’ Association Decision of 26.06.2004,  COMP/38.549 - PO / L'Ordre des Architectes belges,  http:// www. europa.eu.int/comm/competition/antitrust/cases/index/by_nr_77.html#i38_549 . This scale – described as a ‘guideline’ - laid down the minimum fees for architectural  services  performed by independent architects in Belgium. The Commission considered that the original decision of the Association in 1967 laying down the fee scale (which ha d  subsequently been amended several times since) ,   should  be considered as an independent act of prescriptive character for which the Association, acting as an association of undertakings, was wholly responsible. The Commission also came to the conclusion that the Association intended to coordinate its members’ behaviour in the market via this practice and  that the fee scale  had the restriction of competition as its object. This was even despite the fact that the Association described the scale as a ‘guideline’ and that not all architects had complied with the scale. The Commission imposed a fine of €100,000. The Association decided not to appeal this decision and withdrew the scale of fees, and took steps to publicise the fact.[44]
Decision of 26.06.2004,  COMP/38.549 - PO / L'Ordre des Architectes belges,  http:// www. europa.eu.int/comm/competition/antitrust/cases/index/by_nr_77.html#i38_549
90. National competition authorities have  also  been active.  Annex 5  provides an overview of cases opened since publication of the Commission’s 2004 Report under the EC competition rules in the six professions selected for study. Cases have also been opened covering other professions such as veterinaries and dentists.
91. Ten  cases were opened during 2004/05. These cover a variety of restriction type and professions. All are against professional associations. Two  were  closed  following  satisfactory voluntary resolution of the competition concern identified . In the  Austria n case  against the  Bundesinnung Bau (Austrian Builders Association) it  was  found that the so-called  ‘ non-binding ’  recommended price scales were in effect binding and contrary to Art icle  81 ,  and that these should be revoked Case summary can be found at:  http://www.bwb.gv.at/BWB/Aktuell/widerruf_der_hob_baumeister.htm .[45]
Case summary can be found at:  http://www.bwb.gv.at/BWB/Aktuell/widerruf_der_hob_baumeister.htm
92. Member States are also pursuing further regionally confined cases under their national competition rules. Again, these cover a range of professions and restriction s . One interesting example is a case undertaken by the Finnish C ompetition Authority against the Association of Finnish Architects.  This ended in the competition authority issuing a prohibition decision against the professional body which had banned its members from participating in architectural competitions that it had not approved.
93. Under Article 234, national courts can ask the European Court of Justice  (ECJ)  for a preliminary ruling on a question that is necessary to enable it to give a judgement on the application of Community law, including the EC competition rules. On 17 February 2005, the European Court of Justice made an order on a request for a preliminary ruling concerning the State examination for access to the Italian Bar ( Case C-250/03 ,  Mauri ). In Italy,  the examination committee ,   which oversees the access examination to the Bar ,   is composed of five members appointed by the Minister for Justice ,  namely ,  two judges, a professor of law and two advocates  -  the latter being nominated by the Consiglio  N azionale  F orense ( n ational  b ar  c ouncil) on a joint proposal by the bar councils of the district concerned.  The order assessed the facts on the basis of the criteria mentioned in  Case  C-35/99 ,   Arduino .  The ECJ concluded that  Articles 81 EC, 82 EC and 43 EC do not preclude a rule  which provides that  the examination committee is to be composed  as described.  Since it appears that the Ministry of Justice maintains substantial supervision of the procedures for the State examination,  the ECJ  concluded that the State had not given up the exercise of its powers in favour of private economic operators.  The reasoning was  identical  as  in  Arduino , i.e.  the State has not given up the exercise of its powers in favour of private economic operators nor can that State be criticised for requiring or encouraging the adoption of agreements, decisions or concerted practices contrary to Article 81 EC or reinforcing their effects or for requiring or encouraging abuses of a dominant position contrary to Article 82 EC or reinforcing the effects of such abuses .
94. Currently there is one preliminary ruling pending before the European Court of Justice on which the Commission has submitted observations asking the Court to refine its case-law in line with the  Commission’s  2004 Report ( Case C-202/ 0 4,  Capodarte and Macrino/Meloni .)
6. Conclusion s
95. There  has been  some   substantive progress   in  re fining and  eliminating  disproportionate  restrictions As defined in footnote 2 above.   to  competition  in legislation and  in  the rules and regulations of professional bodies  during 2004/05.  T wo Member States ( Slovenia and  UK) report  progress in  easing quantitative entry restrictions  and  f our   ( Italy,  Latvia ,  L ithuania  and Slovakia ) in freeing up qualitative restrictions;  two  (France  and Slovakia ) in relaxing business structure regulation;  one  (Germany)  in removing fixed or minimum prices;  six   ( Austria, Hungary,  Ireland,  Lithuania,  Slovakia  and  UK)  in ending the use of recommended prices ;  five   (France, Ireland, Italy,  Lithuania and  Portugal )   in easing advertising restrictions .  No substantive progress is reported on revising the scope of reserved tasks.[46]
As defined in footnote 2 above.
96. Some promising work is underway in a number of countries  (Denmark ,  Netherlands , Poland  and UK ) ,   which could lead to significant change  in  the  structure of the  legal professions ,  and  in  Germany in respect of a number of professions.
97. Most progress is being made in those countries where there is a  structured programme of pro-competitive or regulatory reform i n place - Denmark ,  Netherlands  and UK .  Moreover, it is notable that in these countries there is a close partnership between government and national competition authorities. In other countries the  reform  process has not yet got underway ,  or can best be described as  haphazard .
Annex  1 :  O verview of reforms made or planned during 2004/05 to entry restrictions , r eserved tasks or business structure  regulation
Profession|Reforms to entry restrictions|Reforms to reserved tasks|Reforms  to business structure|
Accountan cy /audit |Estonia:   plans to draw up  a  new  Auditing Act to comply  with the new Auditing Directive due for adoption in 2005. This could change some of the current restrictions.  Finland:  new law pending on auditing (currently in draft form).Italy:   i t is recognised that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation.  Work is also underway to merge into one the two existing professional bodies for the accountancy profession (‘dottori commercialisti’ and ‘ragionieri periti commerciali’). Lithuania:  new Law on Audit  introduced in  5/04 increased the entry requirements . I nstead of higher education it became higher ‘economic education’  and the  number of examinations required for  professional qualification increased from 4 to 5 . There are also plans to  draw up an amended Law on Audit to comply with the requirements of the new Audit Directive when adopted. Luxembourg:   t raining requirements have been amended.  In future entrants will be required to pass  a n aptitude/  professional test to  practise  as an accountant  (‘expert-comptable’) - s till to be implemented.Slovenia:  legislative reform is planned after adoption of the new Auditing Directive.Spain:  plans to reform entry requirements for auditors. UK:   new  draft ethical standards for auditors  have been  formulated by the Auditing Practices Board (APB).  Following intervention by the NCA these were revised to ensure that that they did not affect the ability of  small and medium sized audit firms to compete for the business of larger clients . The revised  draft introduced exemptions for SME’s and small audit firms to  provide for this. |Estonia:   plans to draw up  a  new  Auditing Act to comply  with the new Auditing Directive due for adoption in 2005. This could change some of the current restrictions.  Lithuania : plans to draw up an amended Law on Audit to comply with the requirements of the new Audit Directive when adopted.Slovenia:  legislative reform is planned after adoption of the new Auditing Directive.|Belgium:   study underway to examine the options for inter-professional co-operation/joint working between  the accountancy profession ( accountants/auditors/tax consultants )  and other professions e.g. lawyers.  Estonia:   plans to draw up  a  new  Auditing Act to comply  with the new Auditing Directive due for adoption in 2005. This could change some of the current restrictions.  Germany:  review underway to consider re laxing business structure  restrictions so that  accountants  can  co-operate/work jointly e.g. form partnerships with  those outside the  professions  too ( e.g.  Gewerbetreibenden).Italy:  reform project provides for establishment of professional corporations (currently incorporation is forbidden) .Lithuania :  plans to widen the law and allow legal  entities  as well as natural persons to carry out audits  (currently only  legal entities are allowed to carry out audits in Lithuania).  There are also plans to  draw up an amended Law on Audit to comply with the requirements of the new Audit Directive when adopted. Slovenia:  legislative reform is planned after adoption of the new Auditing Directive.|
Tax Consultants(where this profession exists separately)|None|None|Belgium:   study underway to examine the options for inter-professional co-operation/joint working between the accountancy profession (accountants/auditors/tax consultants) and other professions e.g. lawyers.  |
Architects|France:  project underway to reorganise and modernise the  architectural  profession .Hungary:  from   1/1/05 entry requirements were increased and entrants have to pass a new registration examination to become licensed and be able to join the professional body/chamber to practise as a licensed architect. This examination is regulated by the government.Ireland:  the  g overnment is proposing to reserve the title of  ‘a rchitect ’  in a way so as to include practically trained as well as academically trained architects .  Italy:  it is recognised that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. Access requirements have already been relaxed to allow graduates who have completed a 3 year university course to perform some reserved tasks previously only open to those having completed the 5 year course.Luxembourg:  law passed in 7/04 which freed up entry requirements with respect to landscape and interior designers. Only relevant study now required. No longer have to be admitted to a professional body, or take a professional examination, or do a period of  traineeship (internship) .Portugal:  review underway by the government of the law which regulates qualitative entry requirements for ‘technicians’ involved in construction work (this includes architectural and engineering technicians). Review will cover access requirements. The government is also reviewing some of the legislation in the construction area.Slovakia:  entry requirements relaxed. Professional training requirement now 3 instead of 5 years. UK:   general  ongoing review of regulation in the construction industry by the  g overnment .|Portugal:  government is reviewing some of the legislation in the construction area.UK:   general  ongoing review of regulation in the construction industry by the  g overnment . |Austria:   work underway  to  allow architectural companies to have a financial holding/buy  shares in other  architectural companies (currently only natural persons may own shares in an architectural company).  Belgium:   p roject  in progress  to allow architects to operate as incorporated  entities (currently this is not allowed).Italy:  reform project provides for establishment of professional corporations (currently incorporation is forbidden , with some exceptions ) .Portugal:  government is reviewing some of the legislation in the construction area.UK:   general  ongoing review of regulation in the construction industry by the Government .|
Engineers|Hungary:  from  1/1/05  entry requirements have been increased and  entrants have to pass a  new  registration examination to become licensed and  be able to  join the professional body /chamber to practise as a licensed engineer . This examination is regulated by the government .Italy:  it is recognised that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. Access requirements have already been relaxed to allow graduates who have completed a 3 year university course to perform some previously reserved tasks only open to those having completed the 5 year course.Portugal:  review underway by the government of the law which regulates qualitative entry requirements for ‘technicians’ involved in construction work (this includes architectural and engineering technicians). Review will cover access requirements. The government is also reviewing some of the legislation in the construction area.Slovakia:  plans to  review and  amend the Building Act with respect to the field of civil engineering   to simplify  procedures and reduce any kind of professional discrimination .UK:   general  ongoing review of regulation in the construction industry by the  g overnment .|Portugal:  government is reviewing some of the legislation in the construction area.Slovakia:  plans to  review and  amend the Building Act with respect to the field of civil engineering   to simplify  procedures and reduce any kind of professional discrimination. UK:   general  ongoing review of regulation in the construction industry by the  g overnment .|Austria:   work underway  to  allow engineering companies to have a financial holding/buy  shares in other  engineering companies (currently only natural persons may own shares in an engineering company).  Germany:  review  is underway  in some regions at  Länder  level   to  consider  re laxing business structure/ ownership restrictions  (currently the 50% rule operates in the case of certain types of engineering companies i.e. the majority of share capital must be owned by engineers).Italy:  reform project provides for establishment of professional corporations (currently incorporation is forbidden , with some exceptions ) .Portugal:  government is reviewing some of the legislation in the construction area.Slovakia:  plans to  review and  amend the Building Act with respect to the field of civil engineering   to simplify  procedures and reduce any kind of professional discrimination.UK:   general  ongoing review of regulation in the construction industry by the  g overnment .|
L egal profession|Cyprus:  consideration being given to increasing the practical experience requirement to 2 years from the current 1 year.Italy:  it is  recognised that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation.  Latvia:  requirements have been relaxed with regard to the level of professional experience required and the requirement to take the professional entry examination has been removed for those with PhDs. This is designed to facilitate entry. Lithuania:  entry criteria have been relaxed for those with significant professional legal experience (of at least 5 years) so that they do not have to take the professional entry examination. It is designed to facilitate access.Poland:  new law under discussion to promote greater access to the legal profession (it creates a new ministry commission to oversee the entry examinations thus providing more transparency and openness, and creates new routes of entry to the legal profession). Spain:  reforms planned to increase entry requirements for lawyers by introducing a professional entry examination.UK – Scot land:  entry requirements are under review by the Scottish Executive Working Group on Legal Services (this is due to report by Summer 2005).|Denmark:  a governmental committee was set up in 2004 to examine the rules on lawyers – among them the sole right to represent parties in court. G ermany:  project underway  by Ministry of Justice  to consider changes to the law governing the  provision of legal advice/counselling . The aim is to broaden the scope of the law to allow others rather than just lawyers the right to provide legal advice in certain areas. Denmark:  a governmental committee was set up in 2004 to examine the rules on lawyers – among them the sole right to represent parties in court. NL:  there are plans to set up a government commission to review the Law o n  Lawyers which will include considering whether  lawyers’  monopoly  for  in court work should continue. This  commission  will report within 6 months of being set up.Poland:  new law under discussion also proposes creating a ‘routine’ legal services sector. The proposal would remove the monopoly rights of legal advisers/advocates to provide legal advice/services. Representation in court would remain a reserved area.  Portugal:  law in 8/04 introduced notion of “actos próprios”, which are prohibited to other professions. This reinforces the sole right of lawyers to provide representation in court. UK – Scot land :   e xtending rights of audience and rights to conduct litigation in the higher courts to non-lawyers under review by Scottish Executive Working Group on the Legal Services .  |Denmark:  the governmental committee will also consider current business structure regulation.  France:  new  décret   in 2004 relaxed the ownership rules to allow  the constitution of legal firms where the capital/shares can be held by other legal firms or natural persons in the legal profession (also see under notaries below). Changes have also been made to the law to allow financial participation by  ‘sociétés ’ in foreign legal firms. Germany:  project underway by the Ministry  of Justice on  a new law  will also consider relaxing the current business structure/ownership restrictions on lawyers (lawyers can currently only co-operate/form partnerships etc. with patent lawyers, tax advisers and accountants).Italy:  reform project provides for establishment of professional corporations (currently incorporation is forbidden) .NL:  the planned government commission to review the Law o n  Lawyers will also consider regulatory structure, including handling complaints and disciplinary issues, and permissible business structures. UK- England  and Wales :  Clementi review has made proposals to relax current restrictions on business structure.UK – Scot land :  business structure restrictions under review by the Scottish Executive Working Group on Legal Services.|
Notaries|Hungary:  following on from the proposal of the  NCA ,  t he Ministry of Justice intends to review the Law on Notaries. This will  amongst other things  consider the quantitative restrictions on notar y  numbers. Italy:  it is  recognised that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. Latvia:  educational/qualitative entry requirements were relaxed from 11/04 to facilitate entry by a wider range of people.NL:  government established a commission in July 2004 to review the Law on Notaries. Amongst other things this will consider the current conditions of appointment to the notarial profession. It is due to report by July 2005. Also,  work underway  to open the way for candidate notar ies  to become employee s  of an existing notary – designed to increase accessibility to the profession.Slovenia:  the competence to make nominations and make the final decision on notarial appointments has passed to the national regulator (Ministry of Justice) from the professional body. The Ministry also now has a greater supervisory role.|Hungary:  the proposed   review  of  the Law on Notaries. will  also  consider  the scope of reserved tasks . NL:  government commission established in July 2004 will also consider scope of legal monopoly/reserved tasks of notaries. |France:  new  décret  in 2004 relaxed the rules to allow notaries to form incorporated firms. Notaries are also now permitted to hold a minority share/financial holding in a legal firm. Changes have also been made to the law to allow financial participation by  ‘sociétés ’ in foreign notarial firms. Italy:  reform  project provides for establishment of professional corporations (currently incorporation is forbidden) .|
Pharmacists|Belgium:  project to modify legislation on location of pharmacies. Also project to renew the ethical code. Estonia:  new law introduced registration system for pharmacists wishing to practise (took effect from 1/3/05). Aim being to ensure all entrants have the necessary competence. France:  plans to ask the NCA for an opinion on the rules and restrictions  governing the right to establish a pharmacy  contained in the  ethical  code. Germany:  entry requirements were increased from 15/7/05 as a result of a change to the law. This now requires pharmacists wanting to work in public or hospital pharmacies to prove that they have a ‘sufficient knowledge’ of the German language and law.Italy:  it is  recognised that reform of the general framework for the liberal professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation.  Latvia:  plans to amend the law to increase the responsibility on local administrators to ensure the availability of health care services in their area, including pharmacies. Lithuania:  draft amendment to the law has been prepared. NCA has queried the quantitative restrictions therein. UK:  NCA study suggested relaxing entry controls on number and location of pharmacists. Some initial reforms were announced by the government in 8/04. |Belgium:  project  will also  modify legislation on some reserved tasks. Also project to renew the ethical code. France:  discussions underway about modifying the law to remove certain products from the monopoly list so they can be sold outside pharmacies.NL:  evaluation of reserved tasks in process.  Portugal:  plans to open up market for the sale of some medicines.Sweden:  government review of the structure and operation of the State owned monopoly on retail pharmacies following ECJ ruling.|Belgium:  project to renew the ethical code. Estonia:  new law introduced restrictions on ownership of pharmacists (took effect from 1/3/05). A drug manufacturer, or health care professional  entitled to issue prescriptions ,  cannot be a shareholder  of  a pharmacy. This aims to ensure the independence of the practising   pharmacist. Italy:  reform  project provides for establishment of professional corporations (currently incorporation is forbidden) . NL:  gradual development of a more competitive market is being encouraged, including entry by pharmacy chains.Slovakia:  rules on establishment were relaxed from 1/12/04 so that pharmacies can be established by non-pharmacists (previously only pharmacists were allowed to establish pharmacies), but with the exception of health care professionals entitled to issue prescriptions who are still barred from establishing or being shareholders in a pharmacy. Also, plans to allow the creation of chain pharmacies (current rules allow ownership of one pharmacy and one branch only).|
Source: National regulators responses to Commission questionnaire dated December 2004. 
Annex  2: Overview  of countries and professions with fixed prices and reforms made during 2004/05 or planned 
Profession|Fixed  p rices as @ February 2004|Minimum  p rices as @ February 2004|Maximum  p rices   as @ February 2004|Reforms made or planned since February 2004|
Accountancy  / audit |Greece|Italy (for public accountants only) Portugal (for statutory audit only)|Italy (for public accountants  only )||
Tax Consultants(where this profession exists separately)||Germany  (list of criteria that must be taken into account when setting prices)|Germany  (list of criteria that must be taken into account when setting prices)|Germany:  professional rule has been changed so that  the  criteria are now  ‘ guidelines ’  and are not binding. |
Architects|Luxembourg |Cyprus (for public projects and works only) Germany  Italy (for specific services defined in law)|GermanyItaly  (for specific services defined in law)|Germany:  work underway  by the government  to abolish fixed minimum and maximum tariffs. (First draft law  from the Ministry proposing abolition of tariffs  did not get a political majority.)Italy:  work group set up  in Ministry  to revi se  tariff scales  for both private and public works|
Engineers|Luxembourg |Cyprus (for public projects and works only) Germany GreeceItaly (for specific services defined in law)|GermanyGreeceItaly  (for specific services defined in law)|Germany:   work underway  by the government  to abolish fixed minimum and maximum tariffs. (First draft law  from the Ministry proposing abolition of tariffs  did not get a political majority.)Italy:  work group set up  in Ministry  to revi se  tariff scales  for both private and public works.|
L egal profession|Czech  R epublic Estonia (for legal aid cases only) France (for technical and procedural aspects of court work only) Ireland (for legal aid cases only) Luxembourg (for legal aid cases only)Poland (for court work only) SloveniaSpain (for the profession of ‘procuradores’ only)|Cyprus Germany  Greece Italy|Italy|France:   work  underway to  legally  reinforc e  the requirement on lawyers to inform clients  fully as to  how services will be priced. Germany:  tariffs  for out of court work  to be removed from 1/7/06. Italy:  on 8/4/04  revised  tariffs were adopted.|
Notaries|Belgium (for certain services defined in law) Estonia France Germany Greece Hungary Italy Latvia LithuaniaSlovakia  (for areas of work reserved to notaries and probate work only) SloveniaSpain (for certain services it is possible to negotiate a reduction of up to 10% on fees) |Czech Republic Portugal  |Austria (for notarial acts only) Czech Republic Luxembourg (for notarial acts only) Malta Netherlands  (for those on a low income and only in respect of family law) Poland Portugal  |Germany:   work has begun to reform the fixed tariff system. Hungary:   following on from the proposal of the  NCA ,  t he Ministry of Justice intends to re place fixed tariffs with maximum prices. Lithuania:   the g overnment intends to launch a discussion on the replacement of fixed tariffs with maximum prices.Slovakia:  revised fixed tariffs were introduced in 2005 for some reserved areas of work by the Ministry of Justice. Slovenia:  professional body has lost competence to propose tariffs and this has passed to the Ministry of Justice who also has final say on level of tariff. |
Source: National regulators responses to Commission questionnaire dated December 2004. Where responses were incomplete or not received information has been taken from the 2004 Report or the Stocktaking Report on the new EU Member States and the country name is shown in  italics.  Pharmacists are not included.
Annex  3:  Overview of countries and professions with recommended prices and reforms made during 2004/05 or planned 
Profession|Recommended  pri ces as @ February 2004|Reforms made or planned since February 2004|
Accountancy/audit |Austria Greece Italy Portugal  Slovakia Slovenia (for audit only)||
Tax Consultants(where this profession exists separately)|SlovakiaSpain|Slovakia:  recommended prices  were  abolished  from  1 / 1 / 05.|
Architects|Austria Czech Republic Denmark Hungary Ireland LuxembourgPortugal (for public works only and  are  non-binding)   Slovakia Spain |Austria:  from 12/04 recommended prices have become  ‘ guidelines ’.Hungary:  recommended minimum tariffs set by the professional body/chamber were modified to become ‘guidelines’ in 12/04. Ireland:  the practice by the professional body of providing recommended fee tables ceased during the year following intervention by the  NCA . Slovakia:  recommended tariffs were abolished from 14/5/05. Slovenia:   new  recommended tariffs are currently under preparation by the professional body.  UK:  the professional body’s code was changed in 9/04 to allow architects to revise fee quotations to take into account fees quoted by other competing architects (this was formally forbidden) following intervention by the  NCA .|
Engineers|Austria Czech Republic Hungary Italy (for those services not covered by fixed prices) Luxembourg Portugal (for public works only and  are  non-binding)   Slovakia Slovenia Spain (for some types of engineering services only)|Austria:  from 12/04 recommended prices have become guidelines .Slovakia:  recommended tariffs were abolished from 1/1//05.|
L egal profession|Austria Denmark (for legal aid cases only) Greece (for legal consultancy services only) Latvia Lithuania Luxembourg (list of criteria that must be taken into account to calculate price) Portugal (list of criteria that must be taken into account to calculate price) Slovakia  (for use when agreement cannot be reached independently on price) Spain   UK – Scotland (for general business by solicitors)|Lithuania:  recommended prices were abolished  from 6/4/04  via an amendment to the Law on the Bar. Luxembourg:  plan s  to link fees to results of work.Slovakia:  revised recommended tariffs were introduced in 2005 by the Ministry of Justice.  UK-Scot land :  under review by the Scottish Executive Working Party on the Legal Services Market in Scotland.  As a result of the review, the Law Society of Scotland has agreed to withdraw price recommendations and to consult the NCA on a proposed alternative.|
Notaries|Austria (for a small number of other services which are comparable in nature to those undertaken by lawyers) Belgium (for services where the price is not fixed)PortugalSlovakia (for other non-reserved areas) UK - England  and Wales (for Notaries Public)|UK:  fee guidance was withdrawn by the  Notaries Society   – the  professional body  for UK Notaries Public,  in March 2004 following intervention by the  NCA .|
Source: National regulators responses to Commission questionnaire dated December 2004. Where responses were either incomplete or not received information has been taken from the 2004 Report, or the Stocktaking Report on the new EU Member States, and the country name is shown in  italics.  Pharmacists are not included.
Annex  4: Overview  of countries and professions with advertising restrictions and reforms made during 2004/05 or planned 
Profession|Effective  p rohibition on  a dvertising as @ February 2004|Some ad vertising  r estrictions @ February 2004|Reforms made or planned since February 2004|
Accountancy   /audit |FranceLuxembourg  (for audit) Portugal (for audit) Spain (for audit)|Belgium Cyprus Czech Republic (for audit) Germany Greece   Hungary (for audit) Italy Lithuania (for audit) LuxembourgNetherlands (for audit) Poland  (for audit) Portugal  (for non-audit) Slovenia (for audit)|France:  from 25/3/04 the law now allows personal informative advertising (cold calling and comparative advertising are still not permitted). Project also underway to modify the  ethical  code to relax advertising restrictions contained therein to allow  ‘sollicitation ’. Germany:  review underway of rules of professional body on advertising with the aim of relaxing  the  restrictions.|
Tax Consultants(where this profession exists separately)|Poland|Germany Spain||
Architects|Cyprus   Italy|Belgium Greece Ireland Luxembourg   Portugal |Ireland:  professional body withdrew restrictions in 2004 following intervention by the  NCA . Italy:   ethical  code was reviewed in 2004 to relax advertising restrictions contained therein  in agreement with NCA. |
Engineers|Cyprus  |Greece Ireland Italy Luxembourg|Ireland:  restrictions have been removed following publication of the  NCA ’s report on engineers in 2004. Italy:  there are plans to review the  ethical  code with the aim of relaxing the advertising restrictions contained therein|
L egal profession|Estonia Greece Hungary Ireland (for barristers only) Lithuania Poland Portugal|Austria Belgium Cyprus Czech Republic Denmark France Germany  Ireland (for solicitors) Italy Luxembourg Slovakia Slovenia Spain Sweden UK – Scot land  (for solicitors only)|Denmark:  work is underway on legislation to remove the advertising restrictions. Estonia:  consideration being given to amending the law to permit price lists to be published. France:  project ‘décret’ underway to reform the  ethical  code so that lawyers will not have to get ex-ante authorisation from the professional body for the way they propose to advertise. The décret will also allow lawyers to publicise (provide information) on their services to prospective clients via for example a mail shot, but cold calling or canvassing  will  still not  be  allowed.  Germany:   in ternal review underway of professional  ethical  rules by Federal Chamber of Lawyers , including advertising . Greece:  new draft Lawyers Law has been proposed and the intention is to review rules on ‘publicity’ (but not advertising) contained therein. Lithuania:  new Law on the Bar relaxed the effective prohibition on advertising to allow some limited ‘publicity’ by lawyers e.g. via business cards. Promotional activities by an individual lawyer of their practi c e are still prohibited. Portugal:  new law  enacted in 2005 modifying the Statute of the Portuguese Bar relaxed the advertising rules to  allow  ‘ publicity ’   type activities  if objective and lawful. UK – Scot land :  restrictions are under review by the Scottish Executive Working Group on the Legal Services Market in Scotland.  The Law Society of Scotland has agreed to review the advertising restrictions identified in the review and to consult the NCA on proposed alternatives.|
Notaries|Czech Republic Estonia France Greece Italy Latvia Lithuania Luxembourg Malta Poland Portugal Slovakia Slovenia Spain|Austria Germany Hungary UK  – England and Wales   (for Notaries Public)|Italy:   project to elaborate new  ethical  rules on  the provision of  information to the public . |
Pharmacists|Cyprus France ( for  prescription only products) Greece Hungary (for prescription only products) Ireland Lithuania (for prescription only products) Luxembourg PortugalSpain|Austria Czech Republic Finland  France (for non-prescription products  only ) Germany  (advertising has to comply with professional rules) Malta Netherlands Poland   Slovenia Sweden UK|France:  plan s  to ask the  NCA  for an opinion on the rules  on advertising  included in the professional body’s deontological code.  Hungary:  plan s  to review the law on advertising in the pharmaceutical area to bring them into line with the revised ethical code which  has been reformed and the provisions on advertising revised to the satisfaction of the  NCA .  Luxembourg:  plan s  to incorporate the professional guidelines on advertising into the  ethical  code and make them binding (i.e. the rules are about to become more restrictive).|
Source: National regulators responses to Commission questionnaire dated December 2004. Where responses were either incomplete or not received information has been taken from the 2004 Report, or the Stocktaking Report on the new EU Member States, and the country name is shown in  italics.  
Annex 5: Cases opened by national competition authorities under the EC competition rules since February 2004 covering the six professions under study
|Country|Profession|Restriction|Case status|
Fixed and recommended prices|Austria|Architects and engineers (Austrian Builders Association)|Recommended prices|It was found that the ‘non-binding ’  recommended price scales were in fact binding in effect and contrary to Art.81. Decision by the Cartel Court that  the Bundesinnung  Bau (Austrian Builders Association) has to revoke the recommended price scale and change it into a guideline .  |
|Netherlands|Lawyers (Dutch Bar Association)|Restrictions on fee agreements|Open |
|Netherlands|Pharmacies (Dutch Association of Pharmacy)|Recommended prices, market sharing and joint selling/buying agreements|Open |
Advertising restrictions|Hungary|Accountants  (Hungarian Chamber of Accountants)|Advertising restrictions |Open|
|Hungary|Lawyers   (Hungarian Bar Association)|Advertising restrictions|Open|
|Slovakia|Lawyers  (Slovak Chamber of Advocates)|Advertising restrictions |Open|
|UK|Solicitors (The Law Society of Northern Ireland)|Advertising restrictions|Closed due to satisfactory voluntary resolution of the competition concerns by the Law Society.|
Business structure restrictions|Germany|Tax consultants ( Federal Association of Tax Consultants)|Collaborative restrictions|Closed  in  Feb 05 due to satisfactory voluntary resolution of the competition concerns by the Association .|
Other|UK|Barristers (General Council of the Bar of England and Wales Mutual Indemnity Fund)|Bar obligation on members to contribute to the Mutual Indemnity Fund for professional insurance|Closed in March 05 -  insufficient evidence |
|UK|Solicitors (Law Society of Scotland)|Law Society requires members to purchase professional insurance from the Law Society’s Master Policy|Closed in Feb 05 – insufficient evidence|
N.B. A further case has just been reported as being opened by the Czech Republic. This relates to advertising restrictions by the  Czech Chamber of Pharmacists.
[1] The Report is available at:  http:// www. europa.eu.int/comm/competition/liberal_professions/final_communication_en.pdf
[2] In the 2004 Report, the Commission suggested that a  proportionality test  should be used to assess to what extent  anti-competitive professional regulations  and rules  truly serve the public interest  and can be objectively justified .  The 2004 Report suggested that for this purpose it would be useful that  each rule  had  an explicitly stated objective and an explanation  of  how the chosen regulatory measure  was  the least restrictive mechanism to effectively attain th e stated  objective . The Commission invited all to work in partnership – r egulatory authorities in the  M ember   States and professional bodies  -  to review existing rules taking into consideration whether those rules are necessary for the public interest, whether they are proportionate and  whether they are  justified.  For the purpose of this Report, those restrictions that do not meet the proportionality test, as suggested in the 2004 Report, are called ‘unjustified’ or ‘disproportionate’.
[3] As defined in footnote 2 above.
[4] These covered the legal profession in Scotland; lawyers in Italy and Belgium; notaries in Italy, Belgium and Spain; pharmacies in Spain, Scotland and Germany; estate agents in Scotland and Belgium.
[5] Law Society, Findings from the Law Society’s 2001 Business Survey, (2002).
[6] INDECON (2003) INDECON’s Assessment of Restrictions on the Supply of Professional Services, prepared for the Competition Authority, Dublin, March 2003.
[7] The Architects Council of Europe estimates that their members work 40% for businesses, 40% for the public sector and 20% for private households. Engineers estimate that they work equally for the public and the private sector (but not for private households). German tax advisors estimated their clients to be 75% business and 25% household.
[8] This contrasts with a Law Society survey of the public in England & Wales published in 1989 which reported that only 32% of the adult population had consulted a solicitor in the previous 3 years.
[9] LA REGOLAMENTAZIONE DEI SERVIZI PROFESSIONALI ASPETTI SETTOR I ALI , Autorità Garante della concorrenza e dei mercati.
[10] Information on advocacy and enforcement activity by national competition authorities was collected via questionnaires. Responses have not yet been received from all national competition authorities and this may mean that the information presented is incomplete in some cases and does not reflect all relevant activity.
[11] Other professions such as dentists and real estate agents have also been targeted.
[12] The Polish study can be found at:  http:// www.uokik.gov.pl/pl/ochrona_konkurencji/analizyrynku /
[13] The Irish study can be found at:   http://www.tca.ie/professions/legal_report_executive_summary.pdf
[14] Further information on the Danish de-regulation project can be found at:  http://www.ks.dk/english/publications/2004/KBR-notat/
[15] The EFTA report can be found at:  http://www.eftasurv.int/information/pressreleases/2005pr/dbaFile7456.html
[16] Responses were not received from all Member States and those that were varied in completeness. As a  result this may mean that the information presented is incomplete in some cases and does not reflect all  relevant activity  undertaken or underway .
[17] In Italy it is recognised by all parties that reform of the general framework for the professions is long over due and proposals are before parliament. These include reviewing access to the professions and business structure regulation. However, the current proposals retain fixed minimum tariffs for all professions.
[18] As far as professional qualifications are concerned, qualitative requirements imposed by Member States are in principle acceptable under Community law (see for example Case C-55/94  Gebhard ) . In order to facilitate the recognition of professional qualifications between Member States, Community law harmonised minimum training requirements for certain professions such as architects and pharmacists (see Directives 85/384/EEC and 85/432/EEC). When qualifications have not been harmonised, mechanisms have been put in place in order to facilitate the free movement of professionals while ensuring that these measures would not undermine quality: Community law allows host Member States to ensure a priori that the qualifications of migrants willing to work on their territory match national requirements for the same activity (see Directives 89/48/ EEC, 92/51/EEC and 1999/42/EC).
[19] Details on  the  new Directive on recognition of professional qualifications can be found at:   http:// www. europa.eu.int/c o mm/internal_market/qualifications/future_en.htm
[20] See Commission p roposal  for a Directive on statutory audit of annual accounts and consolidated accounts and amending Council Directives 78/660/EEC and 83/349/EEC. This can be found at:  http:// www. europa.eu.int/comm/internal_market/auditing/officialdocs_en.htm
[21] Case C-438/02  Hanner
[22] As defined in footnote 2 above.
[23] See the  Polish  competition authority’s s tudy at:  http://www.uokik.gov.pl/download/Raport%20wolne%20zawody.doc
[24] I t is  estimated that  the  number of  court  cases  in Poland  more than tripled  during the  1990s while the number of  advocates  increased only slightly   from 69 00  to 74 00.
[25] For an interesting critique on the need to modernise the two professions of pharmacists and notaries to meet modern demands - especially in relation to the most standard services - see paper by  Prof. Benito Arruñada,  ‘Managing Competition in Professional Services and the Burden of Inertia’, 2004 EU Competition Law and Policy Workshop Proceedings. The paper can be found at:    http://www.iue.it/RSCAS/Research/Competition/2004/200409-compet-Arrunada.pdf .
[26] As defined in footnote 2 above.
[27] See UK government c onclusions on the matters raised in  its  consultation paper,  " In the public interest? "  July 2002. These can be found at:  http://www.dca.gov.uk/consult/general/oftreptconc.htm#part6
[28] The study by Fred Bruinsma can be found at:  http://www.uu.nl/content/dutchlawinaction2003.pdf
[29] The study by J.Baker of the Justice Research Centre can be found  a t:  http://www.lawfoundation.net.au/publications/research/cfcm/cfcm_rep.pdfker.J.
[30] In Case C-309/99  Wouters  the ECJ recognised that a rule in the ethical code, which prohibited  partnership  between lawyers and accountants in the Netherlands,  could reasonably be considered  necessary for the proper practice of the profession as organised by the Member State concerned, despite the effects restrictive of competition that were inherent in it, and did not infringe the EC competition rules. It arrived at this conclusion having considered several factors, including the specific national set-up and whether the rule was proportionate in these circumstances.
[31] See footnote  17 .
[32] The Clementi Report can be found at:  www.legal-services-review.org.uk .
[33] The so-called `Latin' notary  profession  (sometimes referred to as  ‘civil law notaries’)  are independent professionals who advise private parties and draft contracts on their instruction, as well as partake in the issuing of public documents, and fulfil quasi-judicial duties.  They are  appointed by the state, entrusted with public functions and hold a public office . They are not however  civil servants  and  remain independent from the state  and economically self-reliant. This profession exists in AT, BE, CZ, DE, EE, EL, ES, FR, HU, IT, LT, LU, LV, MT,  NL,  PL, PT,  S K and  SI.
[34] Case C-364/92,  Eurocontrol ,   [1994]   ECR I -0043  para 30, and C-343/95,  Calì e Figli  1997 ECR I -1547.paras 22-23.
[35] This was the case for the public employment office in Case C-41/90  Höfn er  [1991] ECR I-1979,   para. 21,  the airport authority in Case C-82/01 P  Aéroports de Paris  [2002] ECR II -3929 and the city of Trier in Case C-475/99  Ambulanz Glöckner  [2001]  ECR I-08089.
[36] Details on the de-regulation of the notarial profession in the Netherlands can be found at:  http://www.justitie.nl/pers/persberichten/archief/archief_2003/120203commissie_monitoring_notariaat_publiceert_eindrapport.asp
[37] UK public notaries are to be distinguished from the Latin notary profession as defined in footnote  33 . A UK Notary Public bridges the differences between the legal systems of one nation with that of another, so as to give lawful effect to arrangements made by parties from different countries. Within the UK, a Notary Public service will usually be available through a Solicitor who has been granted the authority to act in legal matters associated with foreign jurisdictions. The Notaries Society is the representative society for the 900 or so Notaries Public practising in England and Wales.
[38] In some countries professionals are barred from engaging in certain business practices such as price competition and advertising under ethical codes. Such practices are considered to undermine the dignity and prestige of a profession and to engage in them is deemed as ‘unfair’ competition.
[39] In many countries a distinction is also made between ‘publicity’ or ‘informative advertising’, and ‘advertising’ or ‘promotional pu blicity’, the idea being that a wider dissemination of information on the part of professionals is accepted, or becoming accepted, while proactive promotional advertising is still prohibited. The latter may include in particular comparative advertising, cold-calling and soliciting. However, the line between what is considered ‘informative’ and what is considered ‘promotional’ varies between countries and professions.
[40] See footnote  39  above for explanation.
[41] D irective   2005/29/EC of 11 May 2005  concerning unfair business-to-consumer commercial practices in the  i nternal  m arket .   .
[42] Member States are permitted by Article 7.5 of the Directive 84/450/EEC on misleading advertising, as amended by Directive 97/55/EC, to introduce bans or limitations on comparative advertising for professional services. This is intended to safeguard the interests of professionals and competitors. Any bans or limitations introduced must however  be compatible with the provisions of the E uropean  C ommunity  Treaty  (see judgement of the Court of First Instance in case T-144/99  Institute of Professional Representatives before the European Patent Office v Commission  [2001] ECR II-01087 concerning comparative advertising) .  
[43] As defined in footnote 2 above.
[44] Decision of 26.06.2004,  COMP/38.549 - PO / L'Ordre des Architectes belges,  http:// www. europa.eu.int/comm/competition/antitrust/cases/index/by_nr_77.html#i38_549
[45] Case summary can be found at:  http://www.bwb.gv.at/BWB/Aktuell/widerruf_der_hob_baumeister.htm
[46] As defined in footnote 2 above.