Lundbeck et. al. (COMP/39226) – European Commission

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If Ranbaxy’s trouble with the F.D.A. in the U.S.A. and in India wearnt enough, it has now beeen slapped with the fine of  10.3 million Euros by the European Commission for anti-competitive practices  in delaying the entry of the  generic drug Citalopram into the markets European Economic Area (E.E.A.).

According to the Press Release by the Commission,

 

“The European Commission has imposed a fine of € 93,8 million on Danish pharmaceutical company Lundbeck and fines totalling € 52,2 million on several producers of generic medicines. In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of Lundbeck’s branded citalopram, a blockbuster antidepressant. These agreements violated EU antitrust rules that prohibit anticompetitive agreements (Article 101 of the Treaty on the Functioning of the European Union – TFEU). These generic companies were notably Alpharma (now part of Zoetis), Merck KGaA/Generics UK (Generics UK is now part of Mylan), Arrow (now part of Actavis), and Ranbaxy. (Emphasis added)

….

Citalopram is a blockbuster antidepressant medicine and was Lundbeck’s best-selling product at the time. After Lundbeck’s basic patent for the citalopram molecule had expired, it only held a number of related process patents which provided a more limited protection. Producers of cheaper, generic versions of citalopram therefore had the possibility to enter the market. Indeed, one of them had actually started selling its own generic version of citalopram and several other producers had made serious preparations to do so.

….

 

But instead of competing, the generic producers agreed with Lundbeck in 2002 not to enter the market in return for substantial payments and other inducements from Lundbeck amounting to tens of millions of euros….”

 

Ranbaxy plans to appeal against the decision and fine.

 

P.S.: Not sure if this is the correct citation for unreported Commission Orders. Please do correct me if am wrong.

 

Competition World (By Norton Rose)

I recently came across a Newsletter/Bulletin published by Norton Rose in May 2013 titled “Competition World: A Global Survey of recent Competition and Antitrust Law Developments with Practice Relevance.” I haven’t had the chance to read the full document, but a quick glance made it out to be an excellent summary on all the key competition law developments around the world. Though the Bulletin primarily focuses on the E.U., it also notes developments in Africa, Asia, America and Australia.

P.S.: For the record, this is not a sponsored post.

Why the CCI Google Investigation faces Difficulty.

A recent Economic Times Article states that the “probe by Indian authorities to examine if Google abused its dominant position in the Internet search engine market is progressing at a sluggish pace, mainly due to a lack of understanding on Internet-related issues.” Furthermore, it also stated that “India (presumably through the C.C.I.) has sought the FTC’s help in this matter.”

While the reason stated above is probably true, I feel another important reason the investigation faces difficulty is becaue of the direction the D. G. Office seems to be taking to reach its goal. This is evident from the second line quoted above, where the article states that the C.C.I. is looking for aid from the F.T.C. There is no harm in asking for aid from others, but in this case, the Commission may be asking for aid from the wrong people. One needs to understand that the F.T.C. and the European Commission have SETTLED their cases with Google on the basis of certain commitments they received from the company. (See here for the F.T.C. commitments and here for the E.U. commitments). It is more than evident from their respective press release and the commitments received from Google that both the competition authorities never approached the investigation with an intention to prosecute. Their primary intention was merely to ensure competitiveness without disrupting the market (being the internet search engine market and online advertisement market) to the best possible extent. The merits of such an approach are of course debatable, but are presently outside the scope of this post. What is important is that settlements require a mediative approach (far different from an adjudicatory approach) and this is not the approach the C.C.I. wishes to follow. Even if it wishes to, it as of now can’t, as explained in a previous post.

It is better if the Commission looks eastwards to the Australian Competition and Consumer Commission (A.C.C.C.) for help. The judgement of the Federal Court of Australia is the only case which Google has lost on allegations against its Adwords programme, which is the primary subject of investigation even in India.Google-confused

We’re Back !!

Yup. the title says it all. 🙂

Will start updates as soon as the next significant competition law issue arises. Of course, there are some very important competition law developments, both in India and abroad, which have taken place recently so will try to directly or indirectly cover them through other posts.

A Brief Holiday

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Unfortunately, due to my hectic work schedule (what with a dissertation, an internship and LLM. preparations !! ). I am unable to find time to properly update this Blog on a regular basis, which is why i’m now having to force myself to take a break from posting on this forum.  In other words, there will be no more new posts on this Blog till the end of May.

I understand that there will be lot of new developments (not to mention some important Orders of both the CCI and COMPAT) during this period but regretfully, I will not be writing about them. However, I will continue to put up relevant news updates and other intersting articles on the facebook  page of the Blog.

Till then, cheers. And hope to see you once again soon. 🙂

CCI + Settlement

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A competition law co-blogger recently complained about how the European Commission was turning into a “settlement Junkie”.  While this is a debate which no doubt all EC competition law jurists and lawyers will seek to actively participate in and discusss, the post did get me thinking on any future prospective settlements with the CCI in India.

As far as I know, the CCI has till date not settled any case either related to an anti-competitive agreement or an abuse of dominant position. And on a perusal of the Act, there is a good reason. The Commission doesn’t have the power to settle cases !!  No section of the Competition Act seems to allow the CCI to settle a case if it wishes to do so. The Section which seems to come closest to granting such a power to the Commission may be Section 36 (Power of the Commission to Regulate its Own procedure). However, that the power to settle a case can be interpreted under this Section seems a doubtful proposition.

Of course, this may not necessarily be a bad thing, as we can see from the above mentioned blog post.

Status And Effect of Cooperative Joint Ventures under Indian Competition Law

My article titled “Status And Effect of Cooperative Joint Ventures under Indian Competition Law” has recently been published in the Competition Law Reports (January, 2013 Edition)

In the article, I elaborate in detail the competition law regarding cooperative joint ventures and present the measures and methods which may be adopted by the Commission when it is finally called upon to handle such issues. Part I being the introduction, Part II elaborates upon the concept of cooperative/contractual joint ventures and provides a definition for the phrase and elaborates as to what exactly would constitute a cooperative joint venture.  Part III elaborates in detail the EU law regarding cooperative joint ventures, including the important Orders and Judgements in EU competition law on the same. Part IV focuses on the competition law (or anti-trust law) in the United States of America (U.S.A.) regarding such agreements. Part V deals with the problem of cooperative joint ventures under the Competition Act, 2002 and suggests the preferred method of analysis which may help the Commission best analyze such ventures or agreements.

Click here for a copy of the article and please do leave your comments and feedback on the same.

N. Sanjeev Rao v. Andhra Pradesh Hire Purchase Association, Case No. 49/2012

The case of N. Sanjeev Rao v. Andhra Pradesh Hire Purchase Association, Case No. 49/2012, which was recently dismissed by the Commission, highlights two important developments which are a must in Indian competition jurisprudence.:

1.  It is necessary that the Parliament pass the Competition Amendment Bill, 2012 (see here and here for our previous posts on the same) at the earliest to recognise the concept of collective dominance under the Competition Act. Personally, I am of the opinion that too many genuine cases are getting dismissed due to this wide lacuna within the Act.

2. The Commission should apply a certain amount of pragmatism while deciding the relevant market in a particular case. For example, in this case, it is obvious that the market should have been, as submitted by the informants, “private auto financiers market in the cities of Hyderabad and Secunderabad, Andhra Pradesh.” The decision of the CCI that there was no case to differentiate private auto financers and other banking/non-banking entities which are in the business of extending automobile finance is clearly erroneous in light of practical realities. It is a well known fact that autowallahs would never qualify for an automobile loan with any decent bank, which is the exact reason why they need to resort to such financers in the first place, thus creating a clear distinction between the two different financial markets.