Competition in Professional Services

Although the details vary from country to country, all OECD countries regulate the activities of certain occupations and professions, either directly or by delegating regulatory powers to professional associations. These regulations typically govern matters such as entry into the profession, the conduct of members of the profession, the granting of exclusive rights to carry out certain activities, and often the organisational structure of professional firms. Regulation of professional services can protect vulnerable consumers, but it can also prevent innovation and other competition. In many countries concerns have been raised that professional regulation has the direct or indirect effect of restricting competition in the market for professional services, raising the price and limiting variety and innovation in professional services. In addition, some studies have found that quality-based restraints on entry may have the effect of lowering quality overall. The analytical note describes the basic competition policy problems raised by the self regulation of professional service providers and the means for dealing with them, from law enforcement to advocacy. It also describes how changes in international regulation can promote competition by increasing the possibility of trade across borders for professional business services such as accounting, law, and engineering. This document comprises proceedings in the original languages of a Roundtable on Competition in Professional Services, which was held by the Working Party No. 2 of the Committee on Competition Law and Policy in June 1999. It is published under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience. This compilation is one of several published in a series entitled “Competition Policy Roundtables”