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Scottish Property Centre changes rules

154/03    1 December 2003

The Glasgow Solicitors Property Centre (GSPC) has changed its entry rules following an OFT investigation.

The GSPC is an association of Solicitor Estate Agents in the Glasgow area which provides marketing assistance for members selling property. Conveyancing Direct, a Glasgow based firm, applied to join the Centre. Their application was rejected by the board of the GSPC, which put Conveyancing Direct at a competitive disadvantage.

The rules of admission to an association of undertakings such as the GSPC should be transparent, proportionate, non-discriminatory and based on objective standards. Those that are not may breach competition law where they have an appreciable effect on competition, for example by restricting entry to a market. The OFT expressed concern to the GSPC that its admission rules did not meet the necessary criteria and were anti-competitive.

Following the OFT's investigation the Centre offered to change its admission procedures to meet the concerns raised. The new procedures, which are now in operation, provide prospective members with an application pack setting out the grounds for admission and a written report if their application is rejected; they also introduce an appeals procedure.

John Vickers, OFT Chairman, said:

'It is important for competition, consumers and new businesses that all trade associations have admission rules that are non-discriminatory, fair and transparent.'

NOTE

The OFT's concern was that, before their amendment, GSPC's rules breached Chapter I of the Competition Act 1998. Chapter I prohibits agreements between undertakings, decisions by associations of undertakings or concerted practices which have the object or effect of preventing, restricting or distorting competition in the UK (or any part of it) and which may affect trade within the UK (or any part of it).

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