Anti-competitive conduct and doctors

In Australian Competition and Consumer
Commission v Knight
[2007] FCA 1011 the Federal Court imposed penalties
totalling $110 000 on two Adelaide cardiothoracic surgeons after they admitted contravening ss 45(2)(a)(ii) and 45(2)(b)(ii) of the  Competition Code of
South Australia (which adopts the Trade Practices Act) and to attempted contravention of s

  • that Mr Knight and Mr Ross made an
    arrangement that they would hinder or prevent a newly qualified surgeon
    from entering or supplying his services in the market before he had
    undertaken further surgical training, notwithstanding that he was
    legally qualified to practice as a cardiothoracic surgeon.
  • that Mr Knight and Mr Ross gave effect to the arrangement on six
    occasions between 6 February 2001 and 9 March 2001 by advising either
    hospitals at which the surgeon sought to operate, or cardiothoracic
    surgeons who had been asked to support the surgeon’s applications to
    operate at those hospitals, that the surgeon was insufficiently
    trained, or had not completed his training, and should not be allowed
    to operate at those hospitals.
  • that Mr Ross attempted via a letter in May
    2003, to reach a non-compete arrangement with a second surgeon whereby
    that surgeon would not provide surgical services at Ashford Hospital
    and that Mr Ross would agree not to provide surgical services at
    Wakefield Hospital. The court also declared that Mr Knight attempted,
    via a letter in November 2004, to reach a similar non-compete
    arrangement with the surgeon.

The doctors were two of only
seven or eight such surgeons in the region who supplied cardiothoracic surgical
services to private patients in South Australia.

The anti-competitive conduct provisions
in the TPA were extended in 1996 to apply to individuals in the health sector in
South Australia as a result of the enactment of the Code by the Competition
Policy Reform (South Australia) Act 1996
(SA).The trial judge noted that "Mr Knight and Mr Ross had
little knowledge of the TPA or Code and did not know that the admitted conduct
constituted a breach of the Code. Their conduct was not covert. The conduct
was accordingly deliberate only in the sense of not being accidental or
involuntary and was not in knowing contravention of the law. The respondents
have consented to an order that they undergo appropriate training so that
contraventions can be identified and avoided in the future."

The court ordered Mr Knight and Mr Ross to each pay a pecuniary
penalty of $55 000 and make a contribution of $5000 each to the ACCC’s
costs in relation to the proceedings.

UPDATE 15 September: ACCC issues proceedings against orthodontists for price-fixing and anti-competitive coinduct

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