South African Society of Physiotherapy awarded exemption to Competition Act

SASP submitted its application on behalf of its members for an exemption on 27 July 2024, seeking permission to collectively engage with medical schemes, medical scheme administrations, state and private hospitals, suppliers and other service providers in coding arrangements, collusion on setting prices, global-fee negotiations and to engage in centralised procurement of bulk goods and services.

Mark Thomas, an expert in competition law at Pinsent Masons, said: “An exemption may be granted if an agreement or practice that would normally contravene Chapter 2 of the Act, such as prohibited restrictive horizontal or vertical practices, is found to contribute to certain objectives.” 

“Two relevant objectives on which SASP relied in making the application were the promotion of the competitiveness of small businesses or firms controlled or owned by historically disadvantaged persons and economic development, growth, transformation or stability of any industry designated by the Minister, after consulting the Minister responsible for that industry,” he said.

The Commission approved the exemption for the procurement of bulk goods and services stating that “…collective procurement could help SASP members secure lower prices and demand higher quality standards from suppliers, ultimately promoting overall efficiency”. 

However, the Commission rejected the exemption sought in respect of collective bargaining, billing codes, and global fees as its investigations indicated that the exemption may in fact limit competition and result in tariffs that are above competitive levels which will be detrimental to consumers.

Andrew Attieh, an expert in competition law at Pinsent Masons, said: “It appears from our engagements with our Competition team internationally that such approach is consistent with practices in the United Kingdom and the European Union where competition authorities are willing, in appropriate cases, to informally give comfort or guidance from an antitrust compliance perspective to businesses seeking to collaborate on projects likely to result in benefits for consumers or the industry that outweigh potential anticompetitive harm."

The SASP exemption comes off the back of some other recent exemption-related activity in South Africa, the most recent of which is the block exemption for ports, rail, and key feeder road corridors granted in May this year.