Keywords

Summary



Keywords

1. Competition – Dominant position – Abuse – Refusal to supply wholesalers which export to other Member States – Conditions – Refusal liable to eliminate all effective competition

(Art. 82 EC)

2. Competition – Dominant position – Abuse – Refusal to supply – Conditions

(Arts 3(1)(g) EC and 82 EC)

3. Competition – Dominant position – Abuse – Refusal to supply wholesalers which export to other Member States – Pharmaceuticals sector – Impact of the effects of parallel trade of medicinal products for the final consumer on the abusive nature of the refusal

(Art. 82 EC)

4. Competition – Community rules – Scope ratione materiae – Practices aimed at preventing or restricting parallel exports – Included

(Arts 3(1)(g) EC, 81 EC and 82 EC)

5. Competition – Community rules – Scope ratione materiae – Pharmaceutical sector subject to national price regulation – Included

(Arts 81 EC and 82 EC)

6. Competition – Dominant position – Abuse – Refusal to supply wholesalers which export to other Member States – Pharmaceutical sector – Effect of national regulation concerning prices of medicinal products on the abusive nature of the refusal

(Arts 3(1)(g) and (t) EC and 82 EC)

Summary

1. The refusal by an undertaking occupying a dominant position on the market of a given product to meet the orders of an existing customer constitutes abuse of that dominant position under Article 82 EC where, without any objective justification, that conduct is liable to eliminate a trading party as a competitor. With regard to a refusal by an undertaking to deliver its products in one Member State to wholesalers which export those products to other Member States, such an effect on competition may exist not only if the refusal impedes the activities of those wholesalers in that first Member State, but equally if it leads to the elimination of effective competition from them in the distribution of the products on the markets of the other Member States.

(see paras 34-35)

2. An undertaking in a dominant position for the purpose of marketing a product – which cashes in on the reputation of a brand name known to and valued by consumers – cannot stop supplying a long-standing customer who abides by regular commercial practice, if the orders placed by that customer are in no way out of the ordinary. Such conduct is inconsistent with the objectives laid down in Article 3(1)(g) EC, which are set out in detail in Article 82 EC, particularly in points (b) and (c) of the second paragraph of that article, since the refusal to sell would limit the markets to the prejudice of consumers and would amount to discrimination which might in the end eliminate a trading party from the relevant market.

(see para. 49)

3. In order to determine whether the refusal by a pharmaceuticals company occupying a dominant position on the national distribution market for certain medicinal products to meet the orders of wholesalers involved in parallel exports to other Member States where the selling prices of those medicines are set at a higher level indeed falls within the prohibition laid down in Article 82 EC, in particular at point (b) of the second paragraph of that article, it must be examined whether there are objective considerations based on which such a practice cannot be regarded as an abuse of the dominant position occupied by that undertaking.

In that connection, such an undertaking cannot rely on the fact that the parallel exports which it seeks to limit are of only minimal benefit to the final consumers. Parallel exports of medicinal products from a Member State where the prices are low to other Member States in which the prices are higher open up in principle an alternative source of supply to buyers of the medicinal products in those latter States, which necessarily brings some benefits to the final consumer of those products. The attraction of the other source of supply which arises from parallel trade in the importing Member State lies in the fact that that trade is capable of offering the same products on the market of that Member State at lower prices than those applied on the same market by the pharmaceuticals companies. As a result, even in the Member States where the prices of medicines are subject to State regulation, parallel trade is liable to exert pressure on prices and, consequently, to create financial benefits not only for the social health insurance funds, but equally for the patients concerned, for whom the proportion of the price of medicines for which they are responsible will be lower. At the same time, parallel trade in medicines from one Member State to another is likely to increase the choice available to entities in the latter Member State which obtain supplies of medicines by means of a public procurement procedure, in which the parallel importers can offer medicines at lower prices.

(see paras 38-39, 51, 53, 55-57)

4. In relation to the application of Article 81 EC, an agreement between producer and distributor which might tend to restore the national divisions in trade between Member States might be such as to frustrate the objective of the Treaty to achieve the integration of national markets through the establishment of a single market. Thus, agreements aimed at partitioning national markets according to national borders or making the interpenetration of national markets more difficult, in particular those aimed at preventing or restricting parallel exports, have been held by the Community judicature to be agreements whose object is to restrict competition within the meaning of that article of the Treaty. In the light of the abovementioned Treaty objective as well as that of ensuring that competition in the internal market is not distorted, there can be no escape from the prohibition laid down in Article 82 EC for the practices of an undertaking in a dominant position which are aimed at avoiding all parallel exports from a Member State to other Member States, practices which, by partitioning the national markets, neutralise the benefits of effective competition in terms of the supply and the prices that those exports would obtain for final consumers in the other Member States.

(see paras 65-66)

5. The fact that there is a degree of State price regulation in the pharmaceuticals sector cannot preclude the Community rules on competition from applying. First, the control exercised by Member States over the selling prices or the reimbursement of those products does not entirely remove their prices from the law of supply and demand. Secondly, where a pharmaceutical product is protected by a patent which confers a temporary monopoly on its holder, the price competition which may exist between a producer and its distributors, or between parallel traders and national distributors, is, until the expiry of that patent, the only form of competition which can be envisaged.

(see paras 61, 64, 67)

6. The intensity of the regulation regarding the price of medicines cannot prevent any refusal by a pharmaceuticals company in a dominant position to meet orders sent to it by wholesalers involved in parallel exports from constituting an abuse. Nevertheless such a company must be in a position to take steps that are reasonable and in proportion to the need to protect its own commercial interests.

It cannot be ignored that, in Member States with a system of price regulation in the pharmaceuticals sector, such State intervention is one of the factors liable to create opportunities for parallel trade. Furthermore, in the light of the Treaty objectives to protect consumers by means of undistorted competition and the integration of national markets, the rules on competition are incapable of being interpreted in such a way that, in order to defend its own commercial interests, the only choice left for a pharmaceuticals company in a dominant position is not to place its medicines on the market at all in a Member State where the prices of those products are set at a relatively low level.

In order to appraise whether the refusal by such a pharmaceuticals company to supply wholesalers involved in parallel exports constitutes a reasonable and proportionate measure in relation to the threat that those exports represent to its legitimate commercial interests, it must therefore be ascertained whether the orders of the wholesalers are out of the ordinary in the light of both the previous business relations between the company and the wholesalers concerned and the size of the orders in relation to the requirements of the market in the Member State concerned.

Although such a company, in a Member State where prices are relatively low, cannot be allowed to cease to honour the ordinary orders of an existing customer for the sole reason that that customer, in addition to supplying the market in that Member State, exports part of the quantities ordered to other Member States with higher prices, it is none the less permissible for that company to counter in a reasonable and proportionate way the threat to its own commercial interests potentially posed by the activities of an undertaking which wishes to be supplied in the first Member State with significant quantities of products that are essentially destined for parallel export.

Article 82 EC must therefore be interpreted as meaning that an undertaking occupying a dominant position on the relevant market for medicinal products which, in order to put a stop to parallel exports carried out by certain wholesalers from one Member State to other Member States, refuses to meet ordinary orders from those wholesalers, is abusing its dominant position. It is for the national court to ascertain whether the orders are ordinary in the light of both the size of those orders in relation to the requirements of the market in the first Member State and the previous business relations between that undertaking and the wholesalers concerned.

(see paras 67-71, 73, 77, operative part)