Case T-321/05 AstraZeneca v Commission: ground-breaking abuse of dominance judgment

07/07/10

In Case T-321/05 AstraZeneca v Commission, the General Court of the European Union largely upheld the decision of the European Commission finding an infringement of Article 82 of the EC Treaty (now Article 102 TFEU) on the part of AstraZeneca for abusing its dominant position.  This was the first occasion on which the CJEU has found an abuse of this nature, namely, using the patent system and the procedures for marketing pharmaceutical products for the alleged purpose of preventing or delaying the market entry of competing generic medicinal products.  The General Court reduced the fine of €60 million to €52.5 million because the Commission failed to prove that certain of the conduct was capable of having an impact on parallel imports.

In relation to market definition, the General Court found that a separate product market existed for  ‘proton pump inhibitors' which did not compete in the same market as antihistamines, notwithstanding that both products were used for the treatment of gastrointestinal acid related conditions and both acted by inhibiting acid secretion in the stomach.  AstraZeneca, through the sales of its highly successful patented product ‘Losec', was found to be dominant on a market so-defined.

The first abuse found by the General Court consisted in the fact that AstraZeneca made ‘deliberately misleading representations' to the patent offices of several EU Member States in order to obtain extended patent protection for Losec. The General Court found that this sufficed to constitute an abuse and that there was no need for the Commission to demonstrate AstraZenca's bad faith or any positively fraudulent intent on its part.  It was held to be sufficient that the conduct of AstraZeneca was characterised by a "lack of transparency" or absence of "proactive disclosure" and was thereby contrary to the "special responsibility" of an undertaking in a dominant position "not to impair by its conduct genuine undistorted competition in the market".

The second abuse found by the General Court consisted in AstraZeneca's deregistration of its Losec capsule marketing authorizations in several EU countries (at the same time as introducing medically advantageous Losec tablets). This deregistration had the effect of preventing the use by AstraZeneca's competitors of a simplified authorization procedure.  The General Court found that such conduct was designed to delay the marketing of generic medicinal products and to exclude competitors.  It held that such conduct did not constitute "competition on the merits" and, as such, amounted to an unlawful abuse.

The General Court annulled the Commission's finding of an infringement as regards the deregistrations of the Losec capsule marketing authorisations in Denmark and Norway on the ground that it was not proved that those actions were capable of restricting parallel imports and, on that basis, reduced the fine by €7.5m.

The judgment is here.