Scrap rules preventing competition between Hong Kong’s architects and planners, watchdog urges

Regulator says codes of conduct prevent practitioners from cutting their fees

PUBLISHED : Monday, 28 November, 2016, 5:08pm
UPDATED : Monday, 28 November, 2016, 5:08pm

Hong Kong’s competition watchdog has urged two professional bodies to immediately lift restrictions that stop about 4,000 architects and 400 town planners competing by cutting their fees.

The Competition Commission said on Monday that the Hong Kong Institute of Architects and the Hong Kong Institute of Planners had failed to remove or amend “problematic provisions” in their codes of conduct relating to fees.

It noted that the Institute of Architects imposed numerous restrictions, including a prohibition against members revising fee quotations to compete with another practitioner.

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The regulator stressed that although the institutes were currently exempted under the Competition Ordinance, their members might in certain cases not enjoy such protection.

Architects had to follow the “minimum remuneration” set out in guidelines on submitting design proposals. Similarly, planners “shall not reduce a fee quotation to take account of the fee quoted by another planner for the same service”.

The restrictions on members’ freedom to set their own fees and offer discounts clearly had the potential to prevent, reduce or distort competition, the commission said.

“The observance of such restrictions would mean that planners and architects could not compete with each other by offering lower professional fees to customers,” it said, noting that members could be subject to disciplinary action by their respective institutes if they did not follow the codes.

Rasul Butt, senior executive director of the commission said: “The restrictions ... not only harm competition in the relevant markets, but the impact would also be widespread given the indispensable professional roles of their members in various economic activities.”

The watchdog advised the two bodies to remove or amend the provisions without delay.

“In the absence of a clear indication that genuine action to rectify the situation is underway by end of January 2017, the commission will refer the matter to the Competition Policy Advisory Group,” it warned.

The advisory group receives complaints concerning entities which are not subject to the relevant conduct rules of the Competition Ordinance, such as the two institutes.