The CJEU’s Lundbeck judgment

By Miranda Cole, Wesley Lepla and Marilena Nteve on Posted in Antitrust, Competition Law in Europe, Enforcement, European Commission, Medicinal Products, Pharmaceutical Companies

On 25 March 2021, the Court of Justice of the European Union (“CJEU”) dismissed the appeals by Lundbeck, Merck KGaA (and Generics UK), Arrow, Alpharma (and Xellia) and Ranbaxy, against the General Court’s (“GC”) judgment upholding the European Commission’s (“Commission”) 2013 pay-for-delay infringement decision.

Background

The case concerns the antidepressant containing the active pharmaceutical ingredient (“API”) citalopram.  Lundbeck’s patents for the API and two processes to produce it were protected in a number of European countries until 2003 (“Lundbeck’s original patents”).  Over time, Lundbeck developed other processes for the production of citalopram, in respect of which it obtained various patents (“Lundbeck’s new process patents”).

In 2002, Lundbeck entered into settlement agreements concerning potential launches of generic versions of citalopram with Generics UK (at the time an indirect wholly-owned subsidiary of Merck KGaA), Alpharma, Arrow and Ranbaxy.  Under the agreements, Lundbeck made payments to these producers of generic citalopram (“Other Providers”) in various forms (e.g., direct payments, purchase of generic citalopram stock for destruction, and guaranteed profits in a distribution agreement).  In exchange, the Other Providers agreed to cease or refrain from selling generic citalopram in the EEA as a whole or in specific Member States.

In 2013, the Commission adopted an infringement Decision against Lundbeck and each of the Other Providers, concluding that the agreements were “by object” restrictions of competition. Continue Reading

Commission provides guidance regarding its Article 22 policy change

By Miranda Cole and Aidan Forde on Posted in Antitrust, Competition Law in Europe, Enforcement, European Commission

On 26 March 2021, the European Commission (“Commission”) published a Staff Working Paper summarising the findings of its evaluation of procedural and jurisdictional aspects of EU merger control (the “Evaluation”), along with a communication providing guidance regarding its change in approach to the use of Article 22 of the EU Merger Regulation (“EUMR”) to refer cases over which neither the Commission nor the member states have jurisdiction (“Guidance”). Additionally, the Commission launched an impact assessment on policy options for further targeting and simplification of merger procedures, inviting stakeholders to submit their views by 18 June 2021. Continue Reading

Covington Helps Riga Airport Secure EC Recapitalization Approval

By Johan Ysewyn and Sophie Bertin on Posted in COVID 19, European Commission, State Aid

Covington represented Riga International Airport and the Latvian State in obtaining State aid approval for the recapitalization of Riga International Airport. On March 8, 2021, the European Commission (EC) approved the state recapitalization of up to €39.7 million, comprising a capital injection and a waived dividend payment for the 2019 financial year. Continue Reading

Proposals published for radical overhaul of UK competition regime following Brexit

By James Marshall, Sophie Albrighton, Grace Kim and Summreen Mahween on Posted in Competition Law, Regulation, United Kingdom

On 16 February, John Penrose MP published his long-awaited report into the UK’s competition regime.  Penrose was tasked by the UK Government with reviewing how the UK’s competition regime can:

  1. Play a central role in meeting the challenges of the post COVID-19 economy and in driving recovery.  The Government’s Policy Paper stated that “the pandemic is the biggest threat the UK has faced in decades and overcoming it will require all the dynamism and creativity that exists across all sectors and in all regions and nations of the UK“;
  2. Contribute to the Government’s aim of levelling up across all nations and regions of the UK;
  3. Increase consumer trust, including by meeting the Conservative Party’s 2019 Manifesto commitment to tackle bad business practices, and ensure the competition regime is strong, swift, flexible and proportionate;
  4. Support UK disruptors taking risks on new ideas and challenging incumbents; and
  5. Make best use of data, technology and digital skills which are vital to the modern economy.

Continue Reading

EU General Court dismisses first two challenges to State aid awarded to national airlines in response to the COVID-19 pandemic

By Johan Ysewyn, Sophie Bertin and Aidan Forde on Posted in Antitrust, Competition Law, Competition Law in Europe, COVID 19, European Commission, European Union, State Aid

On 17 February 2021, the General Court of the European Union (“General Court”) in Cases T-259/20 and T-238/20 dismissed Ryanair’s challenges to pandemic aid packages introduced in France and Sweden in order to support the domestic airline sector. The judgments are the first ones where the General Court has decided on the legality of the State aid schemes adopted in response to the COVID-19 pandemic. Continue Reading

The Commission Publishes the Latest Extension of the Temporary Framework for State aid measures to support the economy during the Covid-19 outbreak

By Johan Ysewyn and Sophie Bertin on Posted in COVID 19, State Aid

The Commission’s Temporary Framework for State aid measures supporting the economy during the Covid-19 pandemic (the “Temporary Framework”) is proving to be a success.  More than 200 Member State schemes and individual measures have been cleared under the Temporary Framework since its adoption in March 2020.  It seeks to provide the European economy with a platform to recover from the crisis while limiting distortions of competition in the Internal Market.

On 28 January 2021, the European Commission (“Commission”) adopted a fifth amendment (the “Amendment”) to the Temporary Framework (see our post on the Temporary Framework here, of the first amendment here and of the second amendment here). The third amendment expanded mostly the Framework to further support micro, small and start-up companies and incentivise private investments. The fourth amendment mostly prolonged the validity of the Framework and introduced new possibilities for the State to exit from recapitalised companies while maintaining its previous stake in those companies. The New Amendment extends further the Temporary Framework until 31 December 2021. Continue Reading

Goldman Sachs v Commission: The CJEU further expands the parental liability doctrine — private equity businesses and investors tread carefully

By Johan Ysewyn, Kevin Coates and Aidan Forde on Posted in Antitrust, Cartels, Competition Law in Europe

On 27 January 2021, the Court of Justice of the European Union (“CJEU”) confirmed in Goldman Sachs Group Inc. v European Commission that financial investors can be liable where they hold 100% voting rights over an indirect entity that participated in a cartel, even though the investor does not own 100% of the share capital during the relevant infringement period. Crucially, the judgment highlights the importance of conducting careful due diligence and ensuring competition law compliance for all investors, including financial investors, during the acquisition process. Continue Reading

2020 Competition Law Developments – Reviewing a Notable Year and Looking Ahead to 2021

By Covington Competition on Posted in Antitrust, Competition Law

Competition law appears to be at an inflection point. Over the past year, authorities, policy makers, and commentators across the globe have debated whether current laws and enforcement approaches are appropriately calibrated or whether they should be changed, including to try to protect interests that go well beyond the consumer welfare standard that has been applied for decades. Past is often prologue, and the increased competition law enforcement in 2020 highlights why companies should expect to face more challenges to proposed transactions and more scrutiny of their activities in 2021.

Early Termination of HSR Waiting Periods Temporarily Suspended

By James R. Dean Jr., Ross Demain, Jim O’Connell and Kristin Shaffer on Posted in Mergers, Regulation, US Competition law

The Federal Trade Commission (“FTC”) announced on February 4, 2021, that it is temporarily suspending the discretionary practice of granting “early termination” of the Hart-Scott-Rodino (“HSR”) Act waiting period, with support from the Antitrust Division of the U.S. Department of Justice (“DOJ”). The Agencies cited “the unprecedented volume of HSR filings” and “challenging transition period” as the reasons for suspending grants of early termination. Continue Reading

FTC Announces New Lower HSR Filing and Interlocking Directorate Thresholds, Higher Civil Penalties

By James R. Dean Jr., Ross Demain, Jim O’Connell and Kristin Shaffer on Posted in Mergers, Regulation, US Competition law

Today, the Federal Trade Commission (“FTC”) published revised thresholds for the Hart-Scott-Rodino (“HSR”) Act, which will take effect on March 4, 2021. Earlier, the FTC also announced new thresholds for Section 8 of the Clayton Act, which governs interlocking directorates. Each of these thresholds is lower for 2021, than for 2020. This is only the second time the HSR Act thresholds, which—like the Section 8 thresholds—are indexed to gross national product, have fallen since annual adjustments began in 2005. In contrast, the maximum daily civil penalty for violations of the HSR Act, which is tied to inflation, has increased. Continue Reading

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