No-competition contracts for doctors ‘stifle choice’
THE Medical Specialist Group infringed competition law by imposing excessively broad restraint of trade restrictions on its former consultants, a provisional ruling by the Guernsey Competition & Regulatory Authority has found.
The authority said the MSG had entered into anti-competitive agreements and abused a dominant position in relation to the provision of secondary healthcare services in the island.
Currently, the company prevents its former consultants from offering certain medical services in Guernsey for between 18 months and five years after they leave.
This concerned the regulator as these clauses could lead waiting times for medical treatment to be longer or to be more expensive than would be the case if these former consultants were able to work for an alternative provider and were available.
‘Restrictive covenants are commonplace in partnership agreements and are used to protect the business of the partnership,’ said GCRA CEO Michael Byrne.
‘But they should not go beyond what is necessary and so restrict fair competition in the market to the detriment of those in need of medical care.
‘In this case, we are concerned that the duration and scope of the restrictions imposed by MSG went beyond what was necessary and so potentially stifled choice.’
He added that if competition was possible, it would be good for Guernsey consumers because it would encourage businesses to provide better goods and services at lower prices.
Whereas, if businesses, including medical consultants, were not able to compete effectively, this could lead to less choice, poorer services and higher prices for consumers.
In response to the provisional ruling, MSG interim chief executive Stuart Le Maitre said: ‘The Medical Specialist Group is disappointed with the preliminary findings that GCRA has found post term non-compete agreements in place with its former consultants that prevent competition, which GCRA feels cannot be objectively justified because of their duration and scope.
‘The MSG has not had an opportunity to review the documentation or discuss any aspect of the report.’
He added the group would make no further comment until it has had the opportunity to review its position in light of this preliminary report.
The GCRA case was opened on 18 March last year.
The MSG can make representations to the authority before it reaches a final decision.
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