Source: EURLEX
Language: en
Format: md

No C 8/2 Official Journal of the European Communities 12. 1.91

Notice pursuant to Article 19 (3) of Council Regulation No 17 (') concerning Case No

IV/33.431 — BDO Binder BV

(91/C 8/02)

A. The parties and the Agreement

1. On 12 December 1989 BDO Binder submitted for

negative clearance/exemption a standard agreement
which is concluded by its members. BDO Binder is an
international association of accountancy firms whose
main objective is to establish and maintain a referral
service between members for clients who require work to
be done outside the member's own country. As of the
end of July 1990, 43 agreements had been signed
worldwide of which 12 relate to firms established within

the Community. Only one member is appointed per

country.

2. The agreement is concluded between each member
firm and BDO BV which is a Dutch company wholly
owned by Stichting BDO Binder ('The Foundation').
The Foundation owns the rights to the international
trade name 'BDO Binder' and it has by contract licensed
BDO BV to enter into the networking agreements which
are the subject of the notification. BDO BV acts as an
administrative centre for the BDO organization. The
company was incorporated on 24 August 1989. The
company has few staff and operates on a small capital
base, costs and expenses being reimbursed by the
member firms.

3. The decision to refer clients to another member is

made subject always to the wishes and best interests of
the client (clause 4). It is not obligatory since the
referring office may consider that it is in the best
interests of the client that it does the work itself. The

receiving firm is by contrast obliged by the agreement to
use its best endeavours to perform the referred work
(clause 5).

4. Members are required to use the trade name BDO
Binder in relation to all work referred to them by
another member firm and the acronym BDO in relation
to their own domestic work. They must also obtain
approval of the use and presentation of relevant logos
and styles etc. (clause 3).

5. Members are also required to comply at all times
with standards and practices set out in the quality
control BDO Audit Manual. This manual sets out the

policies and procedures to be followed by the member
firms to ensure that the work carried out is of a high
standard and quality.

O OJ No 13, 21. 2. 1962, p. 204/62.

6. The agreement contains certain other minor obligations requiring members to cooperate in the registration of any intellectual property rights attaching to the
names BDO Binder and BDO and to assist in enforcing
the infringement of such rights. Members are also
required to supply BDO BV with a copy of published
material which may be of use to other member firms.

7. Members are also prohibited from entering into
similar arrangements with other networks (clause 14 (a))
although they may accept referrals from other networks
or other non-member firms. They may not, however,
hold themselves out as forming part of another network.

8. There are no general agreements or arrangements
existing within the association or between member firms
regarding the fees to be charged for referred work. This
is up to the firm to whom the work has been referred to
agree its fee with the referred client. No referral fees are
payable by the receiving office to the referring office.

9. The agreements are entered into for an indefinite
duration but may be terminated by either BDO BV or a
member after a two-year notice period. BDO BV may
terminate in the event that the member firm goes into
liquidation or commits a breach of the agreement.

10. In some cases, firms pass through an interim stage
of being correspondent firms before they become full
member firms. Obligations and entitlements are less
onerous than those which apply to full member firms.
This correspondent agreement also forms part of the
notification. However, all the member firms within the
Community are already full member firms so that the
effect of this Agreement on competition within the
Community can be regarded as _de minimis._

B. The market

11. The relevant market is that for the provision of
accountancy services. This includes accounting, auditing,
taxation advice and planning, management consultancy
and other financial advisory services. There are an incalculable number of firms and individuals offering services
of this kind within the common market. Of these

however only a relatively small number offer such
services on an international basis. The applicant estimates
total worldwide turnover in the relevant market to be

US $ 25 000 million. Of this BDO member firms have a

12. 1.91 Official Journal of the European Communities No C 8/3

total turnover of approximately US $ 800 million giving
them a worldwide market share of 3,1 %. Within the
Community, the size of the relevant market is estimated
to be US $ 7 500 million and of this member firms have
an estimated turnover of US $ 285 million. BDO
member firms together rank seventh in the league table
of international accountancy firms.

C. The Commission's intention

On the basis of the foregoing facts, the Commission
intends to take a favourable view of the agreement.

Before doing so, the Commission invites interested third
parties to send their observations within one month from
the publication of this Notice to the following address,
quoting the reference IV/33.431 — BDO Binder:

Commission of the European Communities,
Directorate-General for Competition,
Directorate for Restrictive Practices, Abuse of Dominant
Positions and Other Distortions of Competition,
Rue de la Loi, 200,
B-1049 Brussels.