Under Article 102 of the Treaty on the Functioning of the European Union (“TFEU”), an undertaking may abuse its dominant position by “directly or indirectly imposing unfair purchase or selling prices”. The UK Court of Appeal recently provided guidance regarding the legal test to determine whether pricing is excessive and unfair. In March, it dismissed the UK Competition and Markets Authority’s (“CMA”) appeal in the Phenytoin case.
Continue Reading The UK Court of Appeal Clarifies the Legal Test for Excessive Pricing
Excessive pricing
Welcome clarifications by the EU Court on the concept of excessive pricing
On 14 September, the Court of Justice of the European Union provided detailed guidance on the concept of excessive pricing under Article 102 TFEU, in response to questions posed by the Latvian Supreme Court.
In Case C-177/16, the Latvian Supreme Court referred a number of questions to the Court of Justice of the European Union (CJEU) regarding the concept of excessive pricing.
This resulted from a series of appeals relating to a decision that the Latvian Competition Council (LCC) took over conduct of the Consulting agency on copyright and communications / Latvian authors’ association (AKKA/LAA), the Latvian collective management organisation handling copyright licences for (Latvian and foreign) musical works in Latvia. The 2013 infringement decision found that the AKKA/LAA had abused its dominant position by imposing excessive music licence fees for music played in Latvian retailers and service providers.
Continue Reading Welcome clarifications by the EU Court on the concept of excessive pricing
UK CMA Imposes Record Fine on Pfizer
The UK’s Competition and Markets Authority (the “CMA”) imposed a £84.2 million (€99.7 million) fine on Pfizer yesterday. In addition, the CMA also fined distributor Flynn Pharma £5.2 million (€6.1 million). The CMA found that Pfizer and Flynn Pharma abused their dominant positions by charging excessive and unfair prices for phenytoin sodium capsules, drugs used to treat epilepsy, in the UK. In addition to the fines, the CMA ordered both entities to reduce their respective prices within timeframes of between 30 working days and 4 months.
Italy’s AGCM Fines Aspen EUR 5 Million for Excessive Pricing
The Italian Autorità Garante della Concorrenza e del Mercato (“AGCM”) has fined Aspen over €5 million for having abused its dominant position – in violation of Art. 102 of the Treaty on the Functioning of the European Union – by increasing prices of its anti-cancer drugs Alkeran (melphalan), Leukeran (chlorambucil), Purinethol (mercaptopurine) and Tioguanine (thioguanine) by up to 1,500%. Aspen had previously acquired the rights to commercialise these drugs, internally referred to as the “Cosmos” drugs, from GlaxoSmithKline. Aspen achieved the price increases by adopting an aggressive negotiating strategy with the Agenzia Italiana del Farmaco, including threating to stop the supply of the medicines on the Italian market (at the time, Aspen was the only company supplying these medicines in Italy). Aspen was able to achieve price increases of between 300% and 1,500% (over the prior price).
In its analysis, the AGCM first defined the national markets using ATC5 classifications. In light of Aspen’s position in markets defined this narrowly, it concluded that Aspen held a dominant position on the various markets.
Continue Reading Italy’s AGCM Fines Aspen EUR 5 Million for Excessive Pricing