CCPC Secures Undertakings and Commitments from Nursing Homes Ireland
January 26, 2018
In January 2018, the Competition and Consumer Protection Commission (CCPC) secured a number of important commitments from Nursing Homes Ireland (NHI), the representative body for this sector. These commitments follow an examination into potential anti-competitive conduct in the private nursing home sector.
In October 2017, the CCPC became aware of a meeting organised by NHI at which collective action against the Fair Deal Scheme was allegedly discussed. The CCPC immediately commenced an examination to determine whether NHI and its members had implemented any of the suggestions made at the meeting, which included collective action to potentially increase the contributions required from nursing home residents, potentially refuse new admissions from acute hospitals and limit the number of new beds made available under the Fair Deal Scheme.
Following this examination, NHI confirmed that it had not implemented any of the measures discussed and it entered into binding commitments with the CCPC, which provide that it will not engage in discussions with its members in relation to anti-competitive collective actions and it will not seek to influence the pricing or supply decisions of its members.
Agreement and Undertakings
NHI has agreed to enter into an Agreement and Undertakings with the CCPC, under which it has given the below binding commitments. A copy of the full Agreement and Undertakings is available here.
- NHI will not organise or engage in any discussions or convene any meetings in relation to any collective actions by NHI and/or members of NHI, which would constitute a breach of the Competition Act 2002 and/or Article 101 of the Treaty on the Functioning of the European Union;
- NHI will not seek to influence the pricing decisions of its members or decisions relating the terms and/or conditions under which its members provide services to consumers of nursing home services in any of NHI’s future communications whether by way of advice, recommendation or suggestion;
- NHI will, within 21 days from the date of the Agreement and Undertakings, remind its members, in writing, (and will provide the CCPC with a copy of the relevant correspondence) that;
- they are obliged under competition law to decide individually the terms and conditions of the services they provide, including pricing, and
- collective boycotts or collective negotiations could potentially breach the Competition Act 2002 and/or Article 101 of the Treaty on the Functioning of the European Union; and
- NHI will introduce a competition law compliance programme for the senior management and the Board of Directors of NHI and will report to the CCPC on the implementation of this programme within 6 months from the date of the Agreement and Undertakings.
In the course of the examination, the CCPC also became concerned about template documents that the NHI had issued to its members. In particular, the template titled NHI Contract for Care, which included lists of discretionary good(s) and service(s) not provided for under the Fair Deal Scheme and for which private nursing home operators could charge consumers. Although this may be beneficial to consumers, the CCPC was concerned that publishing itemised lists of services together with template contracts could facilitate collusion between nursing home operators. If a representative association like NHI were to interfere with pricing decisions, then the proper functioning of the market could be adversely affected. Which inevitably could lead to higher prices and less choice for consumers.
It is important that any template list of goods or services provided by NHI to its members is not perceived as permission or even advice to private nursing home operators about what to charge for these services, particularly if they are currently provided for free. And, in response to the CCPC’s concerns, the board of NHI agreed to remove all lists of discretionary or additional services currently set out in the NHI’s Contract for Care and to replace such lists with alternative wording. The new wording makes it clear that the list of goods or services that form part of the Contract for Care must be completed by the individual private nursing home operator in consultation with the consumer.
Private nursing home operators are “undertakings” within the meaning of section 3 of the Competition Act 2002 (‘2002 Act’) and under EU competition law.
Section 4 of the 2002 Act (which mirrors Article 101 of the Treaty on the Functioning of the European Union) states that “…all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State are prohibited and void …”
NHI is an association of undertakings. When an association of undertakings advises, recommends or suggests to its members, pricing decisions and/or terms and conditions, or attempts to coordinate the actions of its members in relation to whether or not to supply services, this may constitute a decision of an association of undertakings and may potentially involve an infringement of EU and/or Irish competition law. Similarly, encouraging and/or facilitating the sharing of information among nursing home operators regarding their future intentions in relation to the Fair Deal Scheme may constitute an infringement of competition law.
Under competition law, where a business is participating in health schemes and/or providing services, the terms and conditions for the supply of services, including pricing and other charges, is a matter for each individual business.Return to News