INAZ PAGHE/ASSOCIAZIONE NAZIONALE CONSULENTI DEL LAVORO
PRESS RELEASE
PRESS RELEASE
The Competition Authority has found ANCL (the National Labour Consultants’ Association) liable for anti-competitive behaviour, and has reported to Parliament on the shortcomings in current legislation
The Competition Authority has resolved that ANCL - Associazione Nazionale Consulenti del Lavoro (National Association of Labour Consultants) is liable for offences under article 2(2)(b) and (d) of the Competition Act, by concluding an agreement designed to substantially distort competition on the personnel management and administration software market. In view of the serious nature of these offences, the Authority has imposed a fine on ANCL equivalent to 4% of the Association’s revenues in 1999.
ANCL has been implementing this agreement since 1997 following the decision of Inaz Paghe company - one of the leading software houses designing applications for personnel management and administration in Italy - to begin providing computerized wage and salary management services. The purpose of this agreement was to hamper competition from Inaz Paghe on the software market.
Italian labour consultants enjoy a statutory monopoly for producing wage packets. ANCL's had requested its membership to break off (or not to initiate) relations with Inaz to supply its software; it had also made it easier for Inaz's customers to switch to other competing software houses by making special agreements with them; and it had urging the Provincial Councils of the 'Order' of Labour Consultants and the Provincial Unions of the Association not to use Inaz to sponsor their activities.
Since this agreement was tantamount to a collective boycott, it constituted one of the most serious violations of competition law.
Having completed the investigation, and on the basis of the information gathered on the features and the development of the corporate labour consultancy services market, the Authority has submitted a report to Parliament and the Government in which it has stated that the statutory monopoly granted to labour consultants and other categories of professionals, members of regulated professional associations (lawyers, accountants, bookkeepers) in relation to attend to ‘formalities in the field of labour, social security and the social welfare of employees’ by law No.12/79 had placed unjustified restrictions on competitive access to these activities.
This statutory monopoly appeared to be contradictory, because employers are entitled to perform these formalities themselves for their own employees even though they may not necessarily possess the professional skills to do so, skills which one would assume to be guaranteed by virtue of membership of an Labour Consultants' Association or some other equivalent professional Association.
The subsequent provisions introduced by law No.144/99, which was designed to limit the monopoly rights created by law No.12/79 refers only calculating and printing, but does not remove the unjustifiable restrictions on competition that still exist.
For this law, without any justification, restricts the number of persons able to offer computing services for personnel administration and management to companies with fewer than 250 employees.
It would also appear inappropriate for the Ministry of Labour to lay down the rules for the enforcement of this law ‘after consultation with the representatives of the professional associations concerned’, in other words, after consulting the groups of individuals who compete with companies offering wage and salary computing services and whose interest is therefore to restrict those activities.
The Authority also pointed out the negative repercussions on competition resulting from provisions which require fees to be set, and admit of no exceptions to them.
It should be noted, first of all, that by giving the National Council powers to propose tariff setting, section 23 of law No.12/79 gives the whole professional category a predominant role in setting tariffs, enabling it to set them in a way that will protect their own financial interests.
Furthermore, decree No.430/92 provides that the minimum fees shall be obligatory. This provision also extends to apply to persons who do not belong to the professional associations, such as associations of one person businesses and other small firms, which prevents the possibility of greater competition on the market for labour consultancy services.
Rome, 25 February 2000