2003/741/EC: Commission Decision of 13 August 2003 relating to a proceeding under Article 82 of the EC Treaty (Case COMP D3/38.044 — NDC Health/IMS Health: Interim measures) (notified under document number C(2003) 2920)
Date: 2003-08-13
Institutions: European Commission
Subjects: application of EU law, competition law, pharmaceutical industry

18.10.2003

EN

Official Journal of the European Union

L 268/69

COMMISSION

COMMISSION DECISION

of 13 August 2003

relating to a proceeding under Article 82 of the EC Treaty

(Case COMP D3/38.044 — NDC Health/IMS Health: Interim measures)

(notified under document number C(2003) 2920)

(Only the English text is authentic)

(2003/741/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

After consulting the Advisory Committee on Restrictive Prac-
tices and Dominant Positions,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation No 17 of 6 February
1962, First Regulation implementing Articles 85 and 86 of the
Treaty (1), as last amended by Regulation (EC) No 1/2003 (2),
and in particular Articles 3 and 16 thereof,

Whereas:

Having regard to the Commission Decision of 8 March 2001
to initiate proceedings in this case,

(1)

Having regard to the Commission Decision 2002/165/EC (3)
based on Regulation No 17, and particularly on the Commis-
sion's powers under Article 3 thereof
interim
measures, addressed and notified to IMS Health in this case,

to adopt

Having regard to the application for withdrawal of the decision
by IMS Health on 31 October 2002,

Having given IMS Health, NDC Health and AzyX the opportu-
nity to make known their views on whether or not
the
Commission should withdraw the interim measures decision on
grounds of lack of urgency,

Having regard to the final report of the Hearing Officer in this
case (4),

(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 1, 4.1.2003, p. 1.
(3) OJ L 59, 28.2.2002, p. 18.
(4) OJ C 250, 18.10.2003.

IMS Health (IMS) has created, in collaboration with the
industry over a long period of time, a
pharmaceutical
brick structure for the presentation of regional pharma-
ceutical prescription and sales data services in Germany.
The Commission found in its Decision 2002/165/EC
that this constituted a de facto industry standard and it
was acknowledged to be so by the pharmaceutical
companies. The need for comparable and compatible
data,
the possible loss of relationship between sales
representatives and the doctors, the modification of the
working contracts of sales representatives and the costs
incurred to modify software and applications based on
the 1860 brick structure if pharmaceutical companies
were to switch to another brick structure, were consid-
ered as creating a very significant obstacle for them to
do so. Moreover, technical and other constraints such as
the necessary use of administrative boundaries, the data-
protection law and the uncertainty concerning the
permissibility under copyright
law of selling data in
another
structure based on postal districts, gravely
limited the possibilities to create other marketable brick
structures. In particular, the Landgericht Frankfurt am
Main (Frankfurt District Court) had granted, between
October and December 2000,
injunctions
prohibiting NDC Health (NDC) (an American multina-
tional
company), AzyX (a much smaller Belgian
company) and Pharma Intranet Information (PI, now a
subsidiary of NDC), competitors of IMS on the regional
pharmaceutical sales data services market, from using
structures derived from the 1 860 brick structure on the
basis that IMS enjoyed copyright protection.

separate

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Official Journal of the European Union

18.10.2003

(6)

(7)

(8)

(9)

(10)

(2)

(3)

(4)

(5)

The Commission also found that IMS had no objective
justification for refusing to grant a licence for the 1860
brick structure to, NDC and AzyX. The Commission
considered that there was a prima facie case of beha-
viour constituting an abuse under Article 82. The
there were ‘exceptional
Commission considered that
circumstances’ within the meaning of the phrase used by
the European Court of
read in
conjunction with the Ladbroke (2) and Bronner (3) cases.
The use of the 1 860 brick structure was considered as
being indispensable to carrying on business on the rele-
vant market because there was no actual or potential
substitute for it.

Justice in Magill (1)

The Commission found that the refusal by IMS to license
the 1 860 brick structure created a risk of serious and
irreparable harm to the complainant, NDC, and of intol-
erable damage to the public interest which established
the urgent need to grant protective interim measures.
First, the Commission considered, on the basis of the
evidence before it, that unless NDC was granted a licence
to the 1 860 brick structure its German operation would
go out of business. In the Commission's view, without
interim measures, NDC would lose current customers,
had no prospect of attracting new customers for the
coming years and would probably cease trading in
Germany. Second, apart from the serious risk of irrepar-
able harm to NDC, there was also a risk of intolerable
damage to the public interest within the meaning of the
La Cinq judgment (4). Since without
the 1 860 brick
structure it was not possible to compete on the market
at that time or in the foreseeable future, there would be,
in the absence of interim measures, a serious risk to the
continued presence on the market of the other compe-
titor then active, AzyX. Finally, rejecting IMS's conten-
tion that it would suffer irreparable harm, the Commis-
sion concluded that the balance of interests in this case
favoured both NDC and the public interest.

The Commission therefore adopted Decision 2002/165/
EC, which ordered IMS, by way of interim measures, to
license the 1 860 brick structure to its then competitors
on the market for German regional pharmaceutical sales
data services, in return for royalties to be agreed by the
parties within a two-week period of the date of the
request for a licence failing which appropriate royalties
would be determined by independent experts.

By application lodged at the Registry of the Court of
First Instance on 6 August 2001 under the reference T-
184/01,
IMS Health brought an action seeking the
annulment of the decision or alternatively annulment of
its decision concerning the requirement to license the
1 860 brick structure in circumstances where the licence

(1) Joined cases C-241/91 P and C-242/91 P, Radio Telefis Eireann (RTE)
and Independent Television Publications Ltd (ITP) v Commission, [1995]
ECR p. I-0743.

(2) Case T-504/93 Tiercé Ladbroke SA v Commission, [1997] ECR p. II-

923.

(3) Case C-7/97 Oscar Bronner GmbH & Co KG v Mediaprint Zeitungs-

und Zeitschriftenverlag GmbH & Co KG, [1998] ECR p. I-7791.

(4) Case T-44/90 La Cinq, [1992] ECR p. II-1.

terms would be conducted and approved by the
Commission and the suspension of the operation of the
Commission's Decision.

By an Order of 26 October 2001 in case T-184/01R,
the President of
Instance (CFI)
suspended the execution of Commission Decision 2002/
165/EC until such time as the Court of First Instance has
given judgment in the main action.

the Court of First

By application lodged at
the Court Registry on 12
December 2001 under the reference C-481/01 P(R),
NDC Health Corporation appealed against the above-
mentioned order of the President of the CFI.

By an Order of 11 April 2002 in case C-481/01P(R), the
Justice (ECJ) dismissed the
President of the Court of
appeal of NDC.

Reference has been made on 12 July 2001 to the ECJ by
the Landgericht Frankfurt am Main (Frankfurt District
Court ) for a preliminary ruling on related questions
regarding the interpretation of Article 82 of the Treaty.
The reference arises in the context of a copyright infring-
ment action before the German courts between IMS
Health and NDC Health. This case was registered under
the reference C-418/01 and is still pending and proceed-
ings in the main action concerning Decision 2002/165/
EC have been stayed until judgment has been given in
that preliminary ruling.

In a judgment of 17 September 2002, the Oberlandes-
gericht Frankfurt am Main (Frankfurt Higher Regional
Court) dismissed an appeal brought by PI against the
the Frankfurt District
abovementioned judgment of
Court enjoining PI and its co-founder from using the
1 860 brick structure or any derivative thereof. While
recognising that the 1 860 brick structure was protected
by national copyright (the relevant right being held by,
inter alia, certain IMS employees rather than by IMS
itself) and that direct reproduction of that structure by a
competitor of IMS constituted a breach of the Gesetz
gegen den unlauteren Wettbewerb (Law on Unfair
Competition), the Higher Regional Court held that ‘der
Beklagten oder Dritten die freie, selbständige Entwick-
lung einer Segmentstruktur, die ebenfalls auf der Eintei-
lung nach Landkreisen, kreisfreien Städten und Postleit-
zahlbezirken beruht und deshalb ggfs.
einer
annähernd gleichen Anzahl von Segmenten besteht,
nicht ohne weiteres untersagt werden könnte. (…) Insbe-
sondere könnte es der Beklagten oder Dritten nicht zuge-
mutet werden, eine den praktischen Anforderungen nur
unzulänglich
zu
erstellen, nur um einen möglichst weiten Abstand von
dem Produkt der Klägerin zu halten. Vielmehr können

gerecht werdende Datenstruktur

aus

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Abweichungen nicht verlangt werden, wo die Überein-
stimmungen auf sachlich — technischen Anforderungen
beruhen und unter Berücksichtigung des Freihaltebedürf-
nisses der Wettbewerber in diesen Merkmalen die ange-
messene Verwirklichung der Technischen Aufgabe liegt.’
(The defendant or third parties could not simply be
prohibited from developing freely and independently a
brick structure that is similarly based on a breakdown by
district, urban district and post-code district and for that
reason comprise more or less the same number of
bricks. (…) In particular, the defendant or third parties
could not be expected to produce a data structure that
does not sufficiently satisfy the practical requirements
simply in order to keep as much distance as possible
from the plaintiff's product. Instead, variations cannot be
demanded where the overlaps are based on material
technical requirements and,
taking into
account ‘the need of availability’ for competitors, the
appropriate performance of the technical task depends
on these features).

in the light

(11) On 16 April 2003, the Frankfurt District Court forbade
AzyX to use the 1 860 brick structure and any derivative
of it. This judgment was not appealed before the Frank-
furt Higher Regional Court.

(12)

(13)

In its observations of 12 May 2003 on whether or not
the Commission should withdraw the interim measures
decision, IMS considered that the interpretation of the
17 September 2002 raises legal and factual questions
that remain sub judice before the German Courts and
that it is for them to determine the precise scope of that
judgment. As to the withdrawal of the interim measures
decision, IMS suggested that the appropriate course of
action would be to withdraw that decision since none of
satisfied,
the
including, but not limited to the lack of urgency. As for
the current situation in the market, in 2002, IMS had a
market share of between […] (*) and […] % in value and
[…] contracts. In the first quarter of 2003, this market
share increased by […] points in value and to […]
contracts taking into account the situation of AzyX.

interim measures

conditions

are

for

In its observations of 12 May 2003, NDC considered
that there is still considerable uncertainty as to what
could be regarded as a derivative of the 1 860 brick
structure,
in particular what is substantially similar to
the 1 860 brick structure and consequently prohibited
under German copyright law. NDC is currently offering
data in a structure consisting in around 4 000 bricks.
This structure is consistent with the structures used by
the German postal services. Nevertheless NDC has signed
a certain number of new contracts
since the 17
September judgment was rendered and there is now
apparently greater scope for competitors of IMS to stay
on the market as NDC represented between […] and
[…] % in value of the market in 2002 and increased its
market share by […] points in the first quarter with a
large amount of contracts. Moreover, NDC has been able
to conclude contracts with some bigger pharmaceutical
undertakings in its view since the judgement, whereas it
previously had no contracts with the top 20 firms.

(*) The square brackets denote confidential information.

(14) AzyX stopped its activities in Germany on 12 March
2003. AzyX had some
contracts and represented
between […] and […] % in value of the market for
German regional pharmaceutical sales data services at
the end of 2002. According to AzyX, the losses were
caused by its difficulties, driven in its view by the legal
uncertainty, in achieving a sustainable level of penetra-
tion of the German market and were no longer bearable.

(15) As regards AzyX,

from the German
its withdrawal
market for regional pharmaceutical sales data services
constitutes a material change in circumstances. To the
extent that the Commission's decision sought to preserve
the public interest in viable competition on that market
until a final decision could be adopted in this case, that
objective can no longer be realised by requiring the
grant of a licence to AzyX. The grant of such a licence
to AzyX therefore is not possible and is no longer
urgent.

(16) As regards NDC's own interests and the public interest
in the maintenance of
the sole surviving source of
competition, it is not necessary for the Commission to
take a position on the likely outcome of the pending
proceedings for breach of copyright and unfair competi-
tion between IMS and NDC. The Commission notes that
the Frankfurt Higher Regional Court's judgment of 17
September 2002 coincides with an improvement in the
market position of NDC, based on use of the abovemen-
tioned structure.
In particular, NDC has, for the first
time, succeeded in concluding contracts with some
larger pharmaceutical companies in the period subse-
quent to the judgment and its projections for 2003 indi-
cate a general improvement relative to previous years.
Therefore, without prejudice to the question whether the
judgment of 17 September 2002 has caused this
improvement in the commercial position of NDC, there
has been a material change in circumstances. The threat
of extinction of NDC, posed to NDC and to the public
interest in competition, no longer has the urgency to
require the grant of a licence to NDC which was identi-
fied by the Commission at the time of adoption of its
Decision and which is necessary to justify the mainte-
nance of interim measures.

(17)

It is therefore necessary to withdraw Decision 2002/
165/EC notified to IMS Health on the ground that there
is no longer proven urgency requiring the prevention of
irreparable damage to NDC and to the public interest in
competition before the Commission adopts the decision
concluding the present administrative proceeding,

HAS ADOPTED THIS DECISION:

Article 1

Commission Decision 2002/165/EC of 3 July 2001, relating to
a proceeding pursuant to Article 82 of the EC Treaty (COMP/
is
D3/38.044 NDC Health/IMS Health:
hereby withdrawn.

Interim measures)

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Official Journal of the European Union

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Article 2

This Decision is addressed to:

IMS Health
Harewood Avenue
London NW1
United Kingdom.

Done at Brussels, 13 August 2003.

For the Commission

Mario MONTI

Member of the Commission