Brussels Rail Transport Brief: September-October 2020October 27, 2020
Antitrust and Competition
The French Competition Authority Imposes a Record Fine of €444 Million on Three Pharma Companies for Collectively Exploiting Their Dominant Position
On 9 September 2020, the French Competition Authority (FCA) found that three pharma companies collectively held and exploited their dominant position in the age-related macular degeneration (AMD) market. A finding of exploitative abuse is rare in the FCA’s decisional practice. In this case, the FCA did not hesitate to impose a record fine of €444 million on the three pharma companies solely on the basis of a collective abuse of dominance.
AMD is a disease that progressively destroys the central portion of the retina and is the leading cause of severe vision loss in people aged 50 and over. The FCA found that the three pharma companies held a collective dominant position on the basis of their structural and strategic links in the AMD market. These links included licensing agreements and cross-shareholdings between the pharma companies. According to the FCA, such links enabled the companies to adopt a common strategy aimed at sustaining the sales of a much more expensive AMD treatment, to the detriment of a competing product, 30 times cheaper. Both products are developed by one of the three companies and marketed by the two others.
The three pharma companies implemented a disparaging campaign aimed at preserving the position and the price of the more expensive AMD product. The practices notably consisted in discrediting the use of the cheaper version, spreading alarmism and engaging in misleading and deceptive conducts before the public authorities regarding alleged risks associated with the use of the competing product.
When setting the level of the €444 million fine, the FCA took into account the gravity of the anti-competitive conducts. The FCA considered the anti-competitive practices to be particularly serious as they had been implemented in the healthcare sector, in which competition is limited and at a time of public debate over the impact on social security finances of the extremely high price of the AMD product—a drug that is fully reimbursed by the French Social Security system—while there was a significantly alternative cheaper product that could be used.
This decision sends a stark reminder to all pharma companies with respect to the risks of breaching antitrust rules, even if these companies do not enjoy individually a dominant position in circumstances where there are economic links or other factors that may give rise to a connection between companies.
The European Commission Publishes its Preliminary Findings in the Ongoing Review of EU Competition Rules for Vertical Agreements
In October 2018, the European Commission (Commission) launched the evaluation phase of its review process of the Vertical Block Exemption Regulation…