Buchanan v Health Professions Council of South Africa and Another

Ian Walter Buchanan, CEO of Torga Optical, a franchisor of optometry practices, complained that rules prohibiting lay ownership of optometry practices restricted competition. He alleged that rule 8 of the Ethical Rules issued under the Health Professions Act 56 of 1974 and paragraph 2 of the HPCSA’s Policy Document on Undesirable Business Practices constituted a decision by an association of firms that substantially lessened competition in contravention of section 4(1)(a) of the Competition Act 88 of 1998. The Competition Commission declined to refer the complaint, after which Buchanan referred it to the Competition Tribunal. The Tribunal dismissed the complaint on the merits, finding no substantial lessening of competition, but declined to rule on a preliminary jurisdictional issue as to whether the restrictions were statutory rather than the product of a decision by firms. Buchanan appealed against the dismissal, and the respondents cross-appealed on costs.

The appeal was dismissed and the Tribunal’s dismissal of Buchanan’s complaint was upheld on jurisdictional grounds. The court reconsidered the costs issue on cross-appeal, holding that it was at large to do so due to the Tribunal’s error (final costs order not fully reflected in the provided text).

The case clarifies that statutory professional regulation, even if restrictive of competition, does not amount to an agreement or decision by firms for purposes of section 4 of the Competition Act. It delineates the boundary between competition law and statutory regulation of health professions, confirming that challenges to such restrictions must be brought by way of constitutional or administrative review in the High Court, not before competition authorities.