2 April 2007

MinterEllison

WATERFRONT PLACE 1 EAGLE STREET BRISBANE PO BOX 7844 WATERFRONT PLACE QLD 4001 AUSTRALIA DX 102 BRISBANE www.minterellison.com TELEPHONE +61 7 31 19 6000 FACSIMILE +61 7 31 19 1000

L A W Y E R S

Mr Scott Gregson General Manager Adjudication Branch Australian Competition and Consumer Commission PO Box 1 199 DICKSON ACT 2602

Dear Mr Gregson

Notification of provisions which raise third line forcing concerns

We refer to our conversation on 7 February 2007.

We act on behalf of the Australian Society of Orthodontists (Queensland) Incorporated.

Enclosed is:

(a) a Form G: Notification of Exclusive Dealing in respect of certain provisions of our client's Constitution which raise third line forcing concerns;

(b) a submission in support of the notification; and

(c) a cheque in the amount of $1 00 payable to the Australian Competition and Consumer Commission (ACCC).

If you have any questions in relation to this notification or require any further information, please contact Margaret Brown on (07) 3 1 19 6388.

Yours faithfully MINTER ELLISON

- - ,

Contact: Margaret Brown Direct phone: +61 7 3 1 19 6388 Direct fax: +6 1 7 3 1 19 1380 Email: margaret.brown@mintereIlison.com Partner responsible: Margaret Brown Our reference: KEXF MAB 40-5343755

MINTER ELLISON GROUP AND ASSOCIATED OFFICES SYDNEY MELBOURNE BRISBANE CANBERRA ADELAIDE PERTH GOLD COAST DARWIN HONG KONG SHANGHAI BANGKOK JAKARTA SAN FRANCISCO LONDON AUCKLAND WELLINGTON

Regulation 7 1

Form G

Commonwealth of Australia

Trade Practices Act 1974 - sub-section 93(1)

NOTIFICATION O F EXCLUSIVE DEALING

To the Australian Competition and Consumer Commission:

Notice is hereby given, in accordance with subsection 93 (1) of the Trade Practices Act 1974, of particulars of conduct or of proposed conduct of a kind referred to subsections 47 (2), (3), (4), (5 ) , (6), (7), (8) or (9) of that Act in which the person giving notice engages or proposes to engage.

1. Applicant

(a) Name of person giving notice:

Australian Society of Orthodontists (Queensland) Incorporated (AS0 Queensland)

(b) Short description of business carried on by that person:

A S 0 Queensland is an incorporated association of orthodontists which objects include:

(i) to encourage and maintain the study and clinical advancement of orthodontics;

(ii) to promote and maintain high ethical and professional standards among orthodontists for the benefit of the dental health of the nation;

(iii) to support, protect and advance the character and interest of orthodontics generally and of the profession of dentistry in so far as it relates to orthodontics;

(iv) to pursue and advance the recognition and acceptance of the specialist professional practice of orthodontics as a specialist branch of the practice of dentistry and to promote its formal recognition as such and to establish high professional and clinical standards for the specialist practice of orthodontics; and

(v) to provide guidance to members of AS0 Queensland regarding their activities, duties and conduct in relation to the practice of orthodontics and the practice of dentistry in the field of orthodontics.

(c) Address in Australia for service of documents on that person:

Margaret Brown Minter Ellison Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000

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2. Notified arrangement

(a) Description of the goods or services in relation to the supply or acquisition ofwhich this notice relates:

Membership services offered to the classes of people in section 3(a).

(b) Description of the conduct or proposed conduct:

ASO Queensland will supply membership services on the condition that themember is a member of the Australian Society of Orthodontists Incorporated(ASO).

See clause 5(c) of the attached Constitution.

3. Persons, or classes of persons, affected or likely to be affected by the notifiedconduct

(a) Class or classes of persons to which the conduct relates:

Registered orthodontists or dentists studying to become orthodontists who wish tobecome members of ASO Queensland.

(b) Number of those persons:

At present time:

92

Estimated within the next year:

100

(c) Where number of persons stated in item 3(b)(i) is less than 50, their names andaddresses:

Not applicable.

4. Public benefit claims

(a) Arguments in support of notification:

(i) The applicant submits that the main public benefit which arises from therequirement that members of ASO Queensland be members of the ASO isthat it limits duplication of services. The ASO and the state branchesincluding ASO Queensland are structured so that the ASO providesservices which are relevant to orthodontists on a national level and ASOQueensland provides services which are relevant to orthodontists inQueensland.

(ii) The ASO is responsible for the maintenance of professional andeducational standards for orthodontists whereas the individual statebranches, of which ASO Queensland is one, represent the 'grass roots'interests of members and provide more limited services which are relevantto orthodontists in each particular state. This allows for an efficient and costeffective allocation of resources and greater economic efficiency.

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(iii) The applicant submits that the other public benefits include bothadministrative and financial benefits:

(A) services that are relevant to orthodontists on a national scale aremanaged nationally;

(B) ASO Queensland's membership fees are lower; and

(C) the benefits of membership of ASO Queensland and the ASO aregreater as the services provided are tailored to a specific interestgroup.

(b) Facts and evidence relied upon in support of these claims:

(i) The ASO provides the following services to its members:

(A) organisation of activities including:

(I) organisation of a biennial national congress relating to issuesof specific interest to orthodontists. These congresses alloworthodontists to exchange clinical knowledge andprofessional information;

(II) hosting the World Federation of Orthodontists' InternationalOrthodontic Conference in 2010. This conference willprovide Australian orthodontists with the opportunity to meetand network with their international counterparts and toparticipate with international experts in a scientific andeducational forum on issues of modern orthodontics;

(III) public health initiatives including the Give a Smile campaignin which the ASO co-ordinates the provision of freeorthodontic services by ASO members to patients on thepublic waiting list. The ASO oversees and administers theprogram on behalf of the state branches; and

(B) evaluation and review of graduate orthodontic programs andprovision of information to members in relation to the programs;

(C) provision of guidelines and information regarding key areas oforthodontic practice such as infection control guidelines fororthodontists;

(D) the ASO Foundation for Research and Education which providesannual grants and sponsorship for university and post-graduateresearch and organises its own national conferences providing ASOmembers with access to additional educational services;

(E) the Australasian Orthodontic Board (AOB). The AOB's function isto motivate orthodontists to participate in AOB activities to ensurethe maintenance of high professional and clinical standards and tooversee the long-term development of educational and treatmentstandards within the discipline of orthodontics in Australia. TheAOB conducts a Quality Assurance Program recognised by the

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various Dental Boards of each state to which registered orthodontistscan obtain certification;

(F) publication of the Australian Orthodontic Journal which providesmembers with up-to-date research, clinical reports, book reviewsand other interesting material within the discipline of orthodontics;and

(G) organisation of the committees which facilitate the majority ofmembership benefits and support services and act in the interests ofASO members. The state branches do not have standing committees.The committees and their functions include:

(I) Membership and Education Committee – approves coursesand evaluates the qualifications and credentials of applicantsfor membership on behalf of the state branches. The statebranches rely on this Committee to provide the expertisenecessary to assess the credentials of an applicant;

(II) Constitution Committee – oversees the constitution of theASO to ensure that it meets the requirements of its membersfrom time to time. It also provides advice to the statebranches on amendments required to the state branchconstitutions;

(III) Communications and Information Committee – represents theinterests of the ASO in the media and, where necessary,Parliament and assists the state branches with issues that ariseat state level. Many orthodontic issues and other publichealth issues are national and consequently are mostappropriately dealt with at a national level. Both statebranches and the wider community benefit from having theissues dealt with in a co-ordinated way such that a cohesiveand consistent approach to public issues is presented;

(IV) Orthodontic Services Committee – surveys members todetermine what services members want. It also responds torequests for information from members (for example,whether a drug is registered under the Therapeutic Goods Act1989 (Cth)) and manages a rotating roster of orthodontists toanswer questions which the Federal Secretariat of the ASO isunable to answer;

(V) Appeals Committee – administers appeals from a decision ofthe ASO or a state branch to refuse an application formembership or to suspend a member. Because of themutuality of the ASO and the state branches, an appeal froma decision of a state branch would be heard federally;

(VI) Cleft Lip and Palate Committee – liaises with ASO membersin different states to ensure the reasonable provision ofservices to cleft lip and palate patients; and

(VII) Archival Committee – preserves history at a national levelwhich includes contributions from the state branches.

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(ii) The ASO Queensland provides the following services to members:

(A) dissemination of information on behalf of the ASO;

(B) organisation of clinical days relating to issues of specific interest toorthodontists. These clinical days provide a forum for orthodontiststo discuss clinical issues and best practice; and

(C) advice on professional and industrial matters.

(iii) ASO Queensland does not have its own website or publications but reliesupon the ASO to provide these services.

(iv) The fee structure reflects the division of services between the ASO andASO Queensland. In 2007, membership of the ASO was $1347 per annumand membership of ASO Queensland was $44 per annum.

5. Market definition

Provide a description of the market(s) in which the goods or services described at 2 (a)are supplied or acquired and other affected markets including: significant suppliers andacquirers; substitutes available for the relevant goods or services; any restriction on thesupply or acquisition of the relevant goods or services (for example geographic or legalrestrictions):

The market is the market for the provision of membership benefits and support services toregistered orthodontists and dentists training to become orthodontists.

There are no other professional associations for orthodontists within Australia. Howeverthere are a variety of incorporated entities from which orthodontists can acquire generalsupport services which compete for members. The available support services andrelevant service providers include:

(a) Conferences and Information/ Education services — various consultancyorganisations;

(b) Professional Indemnity Insurance — various insurance companies;

(c) Sale of Business — Dentist Job Search, an independent agent for the sale of dentalpractices; and

(d) Industrial Relations advice — various professional and consultancy organisationsincluding solicitors.

6. Public detriments

(a) Detriments to the public resulting or likely to result from the notification, inparticular the likely effect of the notified conduct on the prices of the goods orservices described at 2(a) above and the prices of goods or services in otheraffected markets:

The applicant considers that the notified conduct will have little public detriment.The only detriment is the payment of additional membership fees.

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(b) Facts and evidence relevant to these detriments:

Membership of ASO Queensland is not required by orthodontists who wish topractice in Queensland.

Orthodontists can belong to more than one professional association.

7. Further information

(a) Name, postal address and contact telephone details of the person authorised toprovide additional information in relation to this notification:

Margaret BrownMinter Ellison LawyersWaterfront Place1 Eagle StreetBRISBANE QLD 4000

Dated 2 April 2007

Signed on behalf of the applicant

• . r/(Signature)

Margaret Brown(Full name)

Minter Ellison Lawyers(Organisation)

Partner(Position in organisation)

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DIRECTIONS

1. In lodging this form, applicants must include all information, including supportingevidence that they wish the Commission to take into account in assessing theirnotification.

Where there is insufficient space on this form to furnish the required information, theinformation is to be shown on separate sheets, numbered consecutively and signed by oron behalf of the applicant.

2. If the notice is given by or on behalf of a corporation, the name of the corporation is tobe inserted in item 1(a), not the name of the person signing the notice, and the notice isto be signed by a person authorised by the corporation to do so.

3. Describe that part of the business of the person giving the notice in the course of thewhich the conduct is engaged in.

4. If particulars of a condition or of a reason of the type referred to in section 47 of theTrade Practices Act 1974 have been reduced in whole or in part to writing, a copy ofthe writing is to be provided with the notice.

5. Describe the business or consumers likely to be affected by the conduct.

6. State an estimate of the highest number of persons with whom the entity giving thenotice is likely to deal in the course of engaging in the conduct at any time during thenext year.

7. Provide details of those public benefits claimed to result or to be likely to result fromthe proposed conduct including quantification of those benefits where possible.

8. Provide details of the market(s) likely to be affected by the notified conduct, inparticular having regard to goods or services that may be substitutes for the good orservice that is the subject matter of the notification.

9. Provide details of the detriments to the public which may result from the proposedconduct including quantification of those detriments where possible

ME_7148I928 3 (W2003)

AUSTRALIAN SOCIETY OF

ORTHODONTISTS (QUEENSLAND) INC.

CONSTITUTION

(g) To keep the Federal Body informed of all relevant and significant orthodontic issues of which the QLD Branch is or becomes aware; and

(h) To do all such other lawful things as are incidental or conducive to the attainment of the above Objects.

3. POWERS

Subject to the Act and the rules, Constitution and By Laws of the Federal Body, the QLD Branch has the rights, the powers and the privileges of a natural person including (without limitation) the power:

(a) to enter into contracts; (b) acquire, hold, deal with and dispose of property; (c) make charges for services and facilities it supplies; (d) charge the property of the QLD Branch; (f) to raise Subscriptions and Levies that are necessary or expedient for the

administration of the QLD Branch or to further the Objects of the QLD Branch;

(g) to issue secured and unsecured notes, debentures and debenture stock for the QLD Branch; and

(g) do other things necessary or convenient to be done in carrying out its affairs.

4. AFFILIATIONS

Subject always to the wishes, needs and requirements of the Members as may be determined by Members in General Meeting, the QLD Branch is affiliated with the Federal Body and to the extent required to maintain that affiliation, will abide by the rules, Constitution and By ~ a w ~ of the Federal Body.

PART 2 - MEMBERSHIP

5. MEMBERSHIP QUALIFICATION

A person is qualified to be a Member of the QLD Branch if, but only if:

(a) the person is registered as a member of the Federal Body immediately before the incorporation of the QLD Branch;

(b) the person is a natural person who has been admitted to Membership of the QLD Branch in accordance with this Constitution;

AND

(c) the person is a member of an approved professional association of dentists unless that person is proposed as a Retired or Honorary Member. All Members of the QLD Branch must also be members of the Federal Body.

6. MEMBERSHIP CATEGORIES

6.1. Full Membership

The QLD Branch may recommend to the Federal Body that Full Membership be granted to a person:

(a) whose name has been registered as an "Orthodontist" as conferred by the Dental Board of Queensland; and

(b) who has successfully completed an Approved Orthodontic Course; and (c) who produces a certificate of specialist registration from the Dental Board

of Queensland; and (d) who, as at the date of application, is a person whose continued presence

in Australia is not subject to any limitation as to time imposed by law and either:

(i) resides on a continuing and permanent basis in the State of Queensland;

(ii) practises as an orthodontist on a continuing basis in the State of Queensland; or

(iii) has, in the absolute discretion of the State Council, sufficient nexus with the State of Queensland to warrant being accepted as a Member of the QLD Branch.

6.2. Semi-Retired Membership

The QLD Branch may recommend to the Federal Body that Semi-Retired Membership be granted to a person:

(a) whose name has been registered as an "Orthodontist" as conferred by the Dental Board of Queensland;

(b) who, as at the date of application, is a person whose continued presence in Australia is not subject to any limitation as to time imposed by law and either:

(i) resides on a continuing and permanent basis in the State of Queensland;

(ii) practises as an orthodontist on a continuing basis in the State of Queensland; or

(iii) has, in the absolute discretion of the State Council, sufficient nexus with the State of Queensland to warrant being accepted as a Member of the QLD Branch;

SUBMISSION

on behalf of the Australian Society of Orthodontists (Queensland) Incorporated

in support of a Notification under section 93(1) of the Trade Practices Act 1974 (Cth)

1. Background

1.1 The Australian Society of Orthodontists Incorporated (ASO) is a professional association for orthodontists in Australia.

1.2 The objects of the A S 0 are:

(a) to encourage and maintain the study and clinical advancement of orthodontics;

(b) to promote and maintain high ethical and professional standards among orthodontists for the benefit of the dental health of the nation;

(c) to support, protect and advance the character and interest of orthodontics generally and of the profession of dentistry insofar as it relates to orthodontics;

(d) to pursue and advance the recognition and acceptance of the practice of orthodontics as a specialist branch of dentistry and to promote its formal recognition as such and to establish high professional and clinical standards for the specialist practice of orthodontics;

(e) to provide guidance to members regarding their activities, duties and conduct in relation to the practice of orthodontics and the practice of dentistry in the field of orthodontics;

(f) to maintain or grant affiliation with any body or association upon such terms and conditions as shall best further the objects of the Society;

(g) to keep the state branches informed of all relevant and significant orthodontic issues of which the Society is or becomes aware; and

(h) to do all such other lawful things as are incidental or conducive to the attainment of the above objects.

1.3 The A S 0 has branches in New South Wales, Queensland, Victoria, South Australia and Western .Australia. Each branch is an independent legal entity.

1.4 The state branches of the AS0 are in the process of updating their Constitutions. It is proposed that the revised Constitutions include a provision requiring that a person who wishes to become a member of a state branch must be a member of the ASO.

1.5 It is expected that Australian Society of Orthodontists (Queensland) Incorporated (AS0 Queensland) will adopt its revised Constitution at its Annual General Meeting on 15 May 2007.

1.6 It is anticipated that revised Constitutions will be adopted by the other state branches in the near future and that notifications in respect of the relevant provisions of those Constitutions will be lodged with the ACCC at that time.

Our client is concerned that the provisions set out at 1.4 above could be characterised as a breach of sections 47(6) and (7) of the Trade Practices Act 1974 (Cth) (TPA).

Our client wishes to notify the conduct described above under section 93(1) of the TPA.

Analysis of the conduct

We submit that the public benefit of the notified conduct outweighs the public detriment of the notified conduct.

As outlined in section 5 of Form G, we consider the relevant market is the market for provision of membership benefits and support services to registered orthodontists and dentists training to become orthodontists.

The main public benefit of the notified conduct is that it reduces the need for duplication of services by the AS0 and AS0 Queensland. This results in a more efficient and cost effective allocation of resources and greater economic efficiency. The applicant submits that the other public benefits include both administrative and financial benefits. These are discussed further in section 4(a) of Form G.

The AS0 and the state branches are structured so that the AS0 provides services which are relevant to orthodontists on a national level. These services include the organisation of the committees which facilitate the majority of membership benefits and support services. The individual state branches including AS0 Queensland represent the 'grass roots' interests of members and provide more limited services which are relevant to orthodontists in each particular state. The state branches do not have their own websites or publications but rely upon the AS0 to provide these services.

Further, the fee structure reflects the division of services between the national body and the state branches. In 2007, membership of the AS0 was $1347 per annum and membership of AS0 Queensland was $44 per annum. The structure and division of services between the AS0 and AS0 Queensland are set out in more detail in section 4(b) of Form G.

We believe the notified conduct will have little public detriment. There is no statutory requirement for an orthodontist who practices in Queensland to be a member of AS0 Queensland or the ASO. Further there are other incorporated entities fi-om whom orthodontists could seek general support services and benefits.

Conclusion

For the reasons set out above and in Form G, we submit that the ACCC should issue a notice under section 93(3A) of the TPA.

We consider that the public benefits of the notified conduct will outweigh any public detriment it causes.