After the European Commission announced the launch of an evaluation of national regulations on access to the liberal professions and published its next report showing that they are highly regulated, The Commission for the Protection of Competition (CPC) advocated more competition in the field of liberal professions.
What did the CPC find regarding the regulation of liberal professions and what is the economic theory and logic:
1) The CPC recommends removing the possibility of setting minimum prices of services in a number of professions, as "the fixing of minimum prices constitutes one of the most serious distortions of competition, as it limits price competition between market participants. Minimum prices can in no way be a guarantee of quality. Their effect is to protect inefficient market participants."
Price regulations (minimum, maximum, fixed service prices) are found in almost all of them free professions. This is unacceptable in a market economy and harms the users of all such services by artificially creating higher prices and the impossibility of "market punishment" for the provision of poor quality service. Additionally, such requirements can create a gray market.
2) According to the CPC, whenthe mandatory membership in a professional organization "not necessary, professionals should be able to choose which professional organization to join (architects, engineers, vets). Where possible, certain functions should not be concentrated in one organization.”
The creation of chambers, which in their nature are quasi-state structures and which actually determine who is legally competent and can provide the services, creates serious prerequisites for cartelization, the emergence of a gray sector and the limitation of market mechanisms to control the quality of the service. Moreover, the practitioners are obliged to pay membership fees, participate in the trainings of the respective chamber and pass the exams organized by it. In practice, it is the Chambers, not the users, who determine who will provide what service.
In general, the CPC's efforts to observe effective competition in the regulated professions are commendable. Economic theory and empiricism, as well as sound logic, clearly show that heavy regulation of these professions harms both consumers (through higher prices and poorer quality services and generally more limited competition) as well as those providing and seeking to provide the service themselves (by closing the entrance to the profession, unreasonable obstacles to business, unnecessary requirements). At the moment, the situation does not look promising, and EC reports show that the free professions in Bulgaria are one of the most regulated in the EU. In addition, in recent years several representatives of other guilds have also demanded regulation of their professions – there have even been bills for brokers and industrial property representatives.
The question now is how the CPC analysis will be used, and whether at last liberal professions will become truly free and no similar regulation of other professions will be allowed.