In 2024, the Fair Trading Commission (FTC) commenced an assessment of the practice whereby a business requires customers to use only pre‑designated third‑party providers of a complementary product as a condition for accessing its primary product. These designated providers form what is commonly referred to as a Panel, which is created and managed by the business.
Panels may be socially desirable to the extent that they promote economic efficiency in certain markets by reducing instances of market failures. However, they can also be problematic in other markets, as they may create impediments to entry. In this regard, the Commission has outlined a number of considerations for the establishment of these Panels.
Panels are particularly prevalent in the financial sector among commercial banks, insurance companies, and mortgage institutions. For example, mortgage providers typically direct customers to their Panel of valuation surveyors when processing mortgage applications.
This assessment has benefited from extensive consultations with key stakeholders, resulting in the development of seven Guidelines to govern the establishment and maintenance of Panels, which are investigated under Section 17 of the Fair Competition Act. The core principle of these Guidelines is that where Panels are deemed necessary by businesses, they must be managed in a manner that imposes no more stringent restrictions on third parties than is required. This is consistent with Section 17(4) of the Fair Competition Act.
Businesses are encouraged to utilise these Guidelines to reduce their exposure to enforcement actions by the Fair Trading Commission.