Antitrust in focus - July 2021

General

• The Dutch Competition Authority’s direction of travel
• U.S. Procurement Collusion Strike Force claims first international scalps
• Portuguese competition authority sanctions non-compete agreement discovered in a merger control review
• EU’s plans for updated rules on vertical agreements start to crystallise
• UK government progresses initiatives in competition and consumer law, merger control, the digital sector, national security review and subsidy control

Digital & TMT

• U.S judge dismisses antitrust lawsuits against Facebook
• U.S. FTC and Broadcom on cusp of settlement of chip monopolisation probe
• China's third merger block and first failure to file penalty with remedial measures fail in platform economy

Industrial & Manufacturing

• European Commission's car emissions cartel decision for first time calls out technical development collusion

Life Sciences

• Antitrust authorities crack down on excessive drug pricing with record fines

General

The Dutch Competition Authority’s direction of travel

The Netherlands Authority for Consumers and Markets (ACM) has made no secret of its ambition to be one of the leading European antitrust regulators. Three particular topics have featured prominently in its enforcement agenda and are likely to remain priority focus areas for the foreseeable future:

• Technology markets, particularly platform economies, and payment markets. While the ACM does not consider there are currently any dominance issues in payment markets in the Netherlands, it is alive to the possibility of the market ‘tipping’. As a result, conduct by ‘Big Tech’ companies amounting to refusal to provide access to competing providers, preferential treatment of payment services on platforms or the bundling of financial services looks set to continue to attract particular scrutiny. The agency is also actively lobbying for legislative changes – such as to the current payment services directive – to spur competition in platform economies.

A challenge here is the risk of overlap – and need for a clear line – between the ACM’s enforcement activities and those of the European Commission (EC), as the latter also has a keen interest in these markets and may consider itself to be the better placed authority for further investigations. Coordination with the EC provided a solution in relation to the ACM investigation into Apple’s App Store, which it confirmed in June that it will continue: it became clear from discussions with the EC that there was no overlap between the EC investigation, which focuses on alleged potential barriers to apps competing directly with Apple’s apps, such as music-streaming apps, and that of the ACM which is concerned with apps that do not compete with Apple’s apps, particularly online dating apps. In the ACM’s recently closed investigation into payment apps’ access to Near-Field Communication technology installed in devices such as smartphones (allowing payments by phone in brick and mortar stores), the EU Interchange Fee Regulation was the basis for the investigation, and the ACM did not reach any conclusion on the antitrust aspects of the case, as these are under review by the EC.

• Sustainability. This is a priority issue for the ACM in its capacity not only as antitrust regulator but also as consumer protection watchdog and energy regulator. It has positioned itself as a forerunner in the European debate – and advocate for Europe-wide guidance – on the antitrust aspects of the topic. Recent initiatives include the publication in January 2021, following public consultation, of revised draft guidelines explaining how competitors can cooperate to combat climate change or other sustainability goals in an antitrust-compliant manner. The ACM has indicated that it will not impose fines on businesses that follow the guidelines in good faith and engage with it in a timely fashion. Outside the antitrust arena, the ACM has published guidelines on how to ensure sustainability claims comply with the consumer protection rules, begun three investigations into allegedly misleading claims and produced a position paper on the development, and potential regulation, of hydrogen infrastructure, with hydrogen expected to play a key role in future energy supply.

• Pharmaceutical and healthcare markets. The ACM has shown itself ready to take on challenges related to (structural) issues in the healthcare market. Recent initiatives include stepping up scrutiny of hospital mergers; carrying out in-depth examinations into negotiations between healthcare insurers and hospitals, publishing guidance on the joint procurement of medication, and providing guidance on cooperation and information exchange in response to the Covid-19 pandemic.

It has also clearly indicated that it will take action against conduct preventing market entry to (cheaper) biosimilar drugs, as in the recently closed AbbVie investigation where, according to the ACM, AbbVie had attempted to keep its market position related to the drug Humira by offering discounts to hospitals after the expiry of its patent. The ACM found this amounted to exclusive purchasing. Following AbbVie committing not to include exclusivity clauses or discounts with a similar effect in its commercial contracts, the ACM closed the investigation. Unusually, the ACM has also recently imposed fines for an abuse of dominance involving excessive pricing – an issue receiving increasing attention by antitrust authorities across Europe. You can read more about this in the final article of this month’s edition.

U.S. Procurement Collusion Strike Force claims first international scalps

The Procurement Collusion Strike Force (PCSF) was established in November 2019 to deter, detect, investigate and prosecute criminal anti-competitive behaviour in U.S. government procurements. It targets protection of spending at all levels of government ‒ federal, state and local ‒ from fraud and abuse. Since the launch of “PCSF: Global” in late 2020, established through partnerships with international authorities to investigate collusion in U.S. procurement activities abroad, its sights have been firmly set on government spending outside of the U.S. too. It is therefore no surprise that the PCSF’s aggressive approach to enforcement has crystallised most recently with criminal charges against both companies and individuals based outside the U.S..

First, G4S agreed to plead guilty to its role in a conspiracy to rig bids, allocate customers and fix prices for defence-related security services in Belgium. The collusion involved contracts for the U.S. Department of Defense and the North Atlantic Treaty Organization Communications and Information Agency, which is funded in part by the U.S.. Services covered by these contracts included protecting military buildings and installations through the physical presence of guards, mobile monitoring and electronic surveillance. The participants are alleged to have coordinated price increases, submitted artificially-determined, non-competitive, inflated bids and refrained from bidding for certain contracts. As part of the PCSF’s first international resolution, the Belgian security firm has also agreed to pay a criminal fine of USD15 million and cooperate with the ongoing investigation. Indeed, the fine reflects a 30% reduction from the minimum fine recommended by the U.S. Department of Justice’s Sentencing Guidelines to take account of G4S’s “early and valuable” cooperation.

Five days later, another Belgian Security services company, Seris, and three former executives were indicted for their roles in the conspiracy ‒ the PCSF’s first indictment involving an international conspiracy. All of the defendants worked in Belgium and are Belgian nationals. They face possible extradition and maximum penalties of ten years in prison and USD1m in fines. The company also faces a severe maximum fine of USD100m as well as treble damages. Other prosecutions are likely to follow in the case.

Our alert on the launch of the PCSF provides more information on the make-up of the task force as well as key takeaways. We expect the PCSF to continue to direct attention on both international and domestic conduct in procurement. And, while defence and security is clearly a sector of interest, the PCSF will tackle any industry where it sees concerns.

Meanwhile, President Joe Biden’s executive order aimed at promoting competition in the U.S. economy has cited labour, agriculture, technology and healthcare as markets of antitrust enforcement focus. The 72 initiatives in the order include a ban or limit on employee non-compete clauses, a ban on “pay-for delay” agreements between drug manufacturers and reminding the federal agencies that the law allows them to challenge “prior bad mergers”, including those that were previously cleared under the U.S. merger control rules. The progress of these initiatives will be monitored by a White House Competition Council. See our alert for the details. And with the recent nomination of Jonathan Kanter as Assistant Attorney General for the U.S. DOJ’s Antitrust Division we can expect more vigorous U.S. antitrust enforcement to come.

Portuguese competition authority sanctions non-compete agreement discovered in a merger control review

The Portuguese Competition Authority has fined companies in both the Blueotter and EGEO groups a total of EUR2.9m for implementing a non-compete agreement in the market for the provision of services to waste management systems in Portugal between 2017 and 2019. Six managers and board members were also fined a total of EUR27,075. According to the authority, the individuals knew and actively participated in the illegal practices without having adopted any diligence or measure to prevent the infringement or its execution.

The case highlights the perils of agreeing overly broad non-competes in sale and purchase agreements (SPAs). A 2019 SPA between Blueotter and EGEO notified to the authority as part of a merger control filing included a clause under which the groups agreed not to compete in the business areas in which each was active. Prompted to delve further, including by means of dawn raids, the authority uncovered an earlier 2017 services agreement under which certain subsidiaries had agreed to “use their best efforts to minimise expressions of interest or submission of commercial proposals” to customers that the other already had in its customer portfolio. The 2019 SPA extended the non-compete obligations to cover customers of all companies that were part of the Blueotter and EGEO groups. In the authority’s opinion, the obligations created a nationwide horizontal marketsharing agreement, “characterised by a continuous effort by the Blueotter Group and the EGEO Group to eliminate any competitive dynamics between them”.

EU’s plans for updated rules on vertical agreements start to crystallise

Vertical agreements, such as those between suppliers and distributors, can be pro-competitive and worthy of a safe harbour from the EU’s prohibition of restrictive agreements. However, the current rules determining the scope and conditions of that safe harbour are over ten years old. Crucially, they predate the growth of e-commerce and online platforms. Over the last few years, therefore, the European Commission (EC) has been working out how to refresh its rules and plug holes in its guidance.

A draft revised Vertical Block Exemption Regulation (VBER) and draft revised Vertical Guidelines, published this month for consultation, reflect the latest thinking by the EC. In places the rules are loosened and in places they are tightened:

Dual pricing, where suppliers charge different prices for online and offline sales, is no longer a hardcore restriction incapable of exemption. So, for example, suppliers would be able to set different wholesale prices for online and offline sales by the same distributor if this is intended to incentivise or reward an appropriate level of investment and relates to the costs incurred for each sales channel.

• In the context of a selective distribution system, the equivalence principle is dropped. The criteria imposed by suppliers on online sales would not have to be overall equivalent to the criteria imposed on brick-and-mortar shops.

• The possibility of shared exclusivity is introduced. Suppliers would be able to appoint more than one exclusive distributor in a particular territory or for a particular customer group if this does not lead to a fragmentation of the single market.

• Rules regarding dual distribution, where a supplier sells directly to end customers through its own websites or via online marketplaces in direct competition with its independent distributors, are tightened. The safe harbour would only be fully available where the parties’ aggregate market share in the retail market does not exceed 10%. Where the market share falls between 10% and 30%, the exemption would not apply to any information exchanges between the parties. These would need to be reviewed under the horizontal rules.

• Across-platform retail parity obligations, requiring a buyer of online intermediation services (eg a marketplace or price comparison tool), expressly or by indirect means (such as differential pricing or incentives), to offer the same or better conditions to end-users as those offered on any other competing intermediation service, becomes an excluded restriction. All other types of parity obligation will continue to benefit from the block exemption.

• Any restrictions that aim to prevent buyers or their customers from effectively using the internet to sell goods and services online, or from effectively using one or more online advertising channels, are clarified as hardcore restrictions. This captures restrictions on the use of price comparison websites or paid referencing in search engines but not online advertising restrictions that set certain quality standards.

The new rules are due to take effect in June next year. At the same time, the UK Competition and Market Authority plans to import a UK-tailored version of the EU rules. When considering the implications of divergence from the EU regime, the UK authority has had an eye to keeping businesses’ compliance costs down. However, we may see some differences emerge. The UK, for example, is proposing to make all wide parity clauses a hardcore restriction with a presumption of illegality, regardless of the level of supply or the relevant industry. And the UK is not likely to withdraw the exemption for dual distribution.

UK government progresses initiatives in competition and consumer law, merger control, the digital sector, national security review and subsidy control

The last month has seen the UK government progress a number of initiatives which will bring about significant changes to the UK antitrust, consumer and foreign investment rules. We have set out the headline points.

• Proposing sweeping competition law and consumer protection reforms

In a move to drive growth and competitive markets in the UK economy, the government has published a consultation document Reforming Competition and Consumer Policy. It comprises a broad package of reforms aimed to address issues identified in recent expert reports and to keep the UK competition regime “best in class”.

In merger control, the government is minded to retain the voluntary and nonsuspensory merger control process. But it proposes changes to the thresholds. These include increasing the turnover-based threshold for the target from GBP70m to GBP100m and removing mergers between small businesses – where each party’s worldwide turnover is less than GBP10m – from the remit of the Competition and Market Authority (CMA). Importantly, an additional jurisdictional threshold where any party to the merger has both: (i) a share of supply of 25% or more in the UK or a substantial part of it; and (ii) UK turnover of more than GBP100m is also mooted. This is intended to better address harmful vertical and conglomerate mergers, including “killer acquisitions” in fast-moving markets.

The government aims to strengthen and speed up enforcement against anticompetitive conduct. Significantly, in order to incentivise leniency applicants, it is consulting on whether holders of full immunity should also have immunity from private damages.

And it proposes reforms to market inquiries, including giving the CMA the power to impose interim measures and/or accept binding commitments at any point in the process. Views are even sought on replacing the current two-staged system with a new single market inquiry tool. Overall, the CMA would be able to impose stronger penalties on companies that slow down or obstruct any of the above types of cases (up to 1% of annual turnover), or on firms that don’t comply with remedies (up to 5% of annual turnover).

A significant focus of the consultation is also on enhancing the CMA’s consumer enforcement powers. The government proposes in particular heavier fines for breaches (up to 10% of annual turnover) and enabling the CMA to enforce consumer law directly rather than having to go via the courts.

• Setting out plans to increase competition in the UK digital economy

The government accompanies the general reform proposals with its much-awaited consultation on a new pro-competition regime for digital markets. It seeks views on the objectives and duties of the Digital Markets Unit (DMU) (currently working in shadow form). This includes how the DMU will designate firms with “Strategic Market Status” (SMS), the form of the mandatory code of conduct to which SMS firms will be subject, and how the DMU will be able to implement “pro-competitive interventions” to address the root causes of substantial and entrenched market power in digital markets (eg to support interoperability between digital platforms and services).

The DMU’s enforcement powers are also covered, including the ability to issue fines of up to 10% of global turnover for serious breaches, and powers to suspend, block and reverse code-breaching behaviour.

Finally, the Government is considering new merger rules for SMS firms, such as requiring them to report on their acquisitions.

• Directing investors and businesses to prepare for national security review of deals

The UK’s strengthened national security regime will commence on 4 January 2022. From that date there will be a dramatic expansion of the government’s ability to scrutinise investments, including – with retroactive effect – those completed on or after 12 November 2020. Ultimately, the government will be able to impose conditions on an acquisition or, if necessary, unwind or block it. Any acquisition requiring mandatory notification and completed without approval will be void and subject to significant fines.

Our alert on the new regime explains why businesses and investors should be getting ready now.

• Laying out a new post-Brexit subsidy control regime

The government has introduced to Parliament draft legislation which will bring in the UK’s post-Brexit subsidy control regime (expected to take effect in 2022). The government considers that the new regime will provide a simpler and more “nimble” system than that which previously applied to the UK under the EU state aid rules.

Unlike the EU rules, which require notification and prior clearance for subsidies above a certain value (unless they fall within a block exemption or an approved scheme), under the UK regime UK public authorities will be able to award a subsidy without prior approval if – following a self-assessment – they consider that the subsidy is designed and awarded in accordance with specified UK-wide principles, subject to certain prohibitions and conditions. In certain circumstances lower risk subsidies may not even require assessment, and some measures, such as those responding to economic emergencies and natural disasters, will be exempt to allow for swift assistance.

Monitoring and oversight of the new regime will be carried out by a new unit housed within the Competition and Markets Authority – the Subsidy Advice Unit (SAU). The SAU will not have approval and enforcement powers. Instead, it will serve in an advisory capacity, offering expertise and challenge to public authorities. Interested parties will be able to apply to the Competition Appeal Tribunal for a review of a subsidy decision.

Digital & TMT

U.S. judge dismisses antitrust lawsuits against Facebook

A D.C. judge has granted Facebook’s motions to dismiss separate parallel enforcement actions brought by the Federal Trade Commission (FTC) and by state enforcers from 46 states, the District of Columbia, and Guam. The complaints accused Facebook of illegally expanding on an alleged social media monopoly through a series of acquisitions including those of Instagram in 2012 and WhatsApp in 2014. The complaints also accused Facebook of using exclusionary strategies including: (i) only making its APIs available to app developers who did not compete with Facebook’s social media offerings; and (ii) preventing the use of its APIs to promote or export user data into competing social networks. These policies were allegedly used to deny API access to nascent competitors like Path, Circle and Vine.

In dismissing the complaints, the judge ruled that the plaintiffs provided insufficient evidence for their claims that Facebook holds a market share in personal social networking “in excess of 60%”. In particular, the judge took issue with the lack of identification of which competitors make up the remaining 30-40%. Notably, the judge highlighted several difficulties in measuring social media market shares including the fact that revenues are only earned in an adjacent market (advertising), and that measuring by user numbers will include users holding accounts on multiple services. In relation to the API complaints, the judge found that the last alleged instance of harm caused by denial of API access occurred in 2015 and therefore those claims are time-barred. In any event, no injunctive remedy would be possible at this stage because Facebook stopped implementing the policies in question in 2018.

The judge dismissed the FTC’s complaint without prejudice and gave it 30 days to refile (addressing the deficiencies identified). It is therefore open for the FTC to (i) try again with the current lawsuit (in an amended form); (ii) appeal the dismissal; or (iii) initiate “Part 3” proceedings in front of an administrative law judge. One key change in the FTC that could impact its decision is the recent appointment of progressive and big tech opponent, Lina Khan, as Chairperson. Facebook has sought to recuse Khan from the case given her prior public statements about the company. Meanwhile, the states’ complaint was dismissed in its entirety. The states have since appealed.

Senator Amy Klobuchar, chair of the Senate’s antitrust subcommittee, denounced the rulings in a statement calling on the FTC to “do everything possible to pursue this case”. The rulings will likely fuel demands in both the U.S. Senate and House for legislative reform to tighten the antitrust rules for big tech and to give the U.S. agencies greater enforcement powers and resources to deal with them. Our recent alert provides a fuller picture of the legislative reform proposals.

Separately, 36 state attorneys and the District of Columbia have this month brought a lawsuit against Google concerning potentially anti-competitive practices in relation to the Google Play Store. The complaints mirror a similar lawsuit brought by Epic Games against Google in August 2020 which is currently ongoing.

U.S. FTC and Broadcom on cusp of settlement of chip monopolisation probe

The U.S. Federal Trade Commission (FTC) looks set to wrap up an investigation into Broadcom with commitments from the company to change its conduct.

The FTC’s complaint alleges that Broadcom illegally maintained its monopoly position in the sale of three types of semiconductor components used in devices that deliver television and broadband internet services, ie chips for traditional broadcast set top boxes and DSL and fibre broadband internet devices, by entering into long-term agreements with customers that prevented them from purchasing chips from Broadcom’s rivals. Broadcom entered into these exclusivity and loyalty agreements with key customers at two levels of the supply chain: (1) at least ten leading original equipment manufacturers (OEMs), some with the most extensive engineering and design capabilities; and (2) major U.S. and other downstream service providers. Broadcom secured these restrictive terms by threatening to charge higher prices to OEMs refusing to enter into these contracts
and to charge higher fees for technical support services to service providers using products made with rival chips. According to the FTC, “Broadcom created insurmountable barriers for companies trying to compete with Broadcom”.

The FTC’s complaint goes further, alleging that Broadcom leveraged its power in the three monopolised chip markets to negotiate exclusivity and loyalty commitments for the supply of semiconductor components in the markets for five related chips, of which Broadcom is one of just a few significant suppliers. The FTC considers that these commitments “prevented Broadcom’s competitors from competing on the merits for customers’ business”.

Inevitably, the proposed consent order requires Broadcom to: (1) stop entering into certain types of exclusivity or loyalty agreements with customers in the three monopolised markets; and (2) stop conditioning access to, or requiring favourable supply terms for, these chips on customers committing to exclusivity or loyalty for the supply of related chips. In addition, Broadcom is prohibited from retaliating against customers who do business with Broadcom’s rivals.

The FTC’s concerns match those of the European Commission (EC). In Europe, the EC’s unprecedented probe was also wrapped up quickly with commitments agreed in October 2020. Unusually, in the EC’s case, some of Broadcom’s commitments had worldwide (bar China) application to account for the nature of the semiconductor industry. An investigation into the same conduct is reportedly ongoing in South Korea.

China’s third merger block and first failure to file penalty with remedial measures fall in platform economy

China’s State Administration for Market Regulation (SAMR) has prohibited a merger between the country’s two largest video game live-streaming platforms, Huya and DouYu. Chinese e-commerce group Tencent solely controls Huya and jointly controls DouYu with DouYu’s founder team. After the transaction Tencent aimed to solely control the merged entity via Huya’s acquisition of all of DouYu’s shares. The veto is SAMR’s first since it took over merger control reviews in 2018, and only the third taken in China since the Anti-monopoly Law (AML) took effect in 2008.

SAMR’s concerns related to China’s domestic game live-streaming (downstream) market as well as its online game operation service (upstream) market. The merged entity would own, for example, more than 70% of the former market based on turnover and more than 80% of that market based on the number of active users. Despite Tencent’s existing control of Huya and DouYu, SAMR found a level of competition between the companies that would be eliminated by the merger with an adverse knock-on effect on consumers. It concluded that Tencent’s market dominance would be further strengthened; its ability to implement a “two-way vertical blockade” over the upstream and downstream markets would harm the interests of game live-streaming practitioners.

Tencent withdrew and refiled the transaction to allow SAMR more review time, on top of an already extended review period. And it offered several increasingly beefed-up commitments to try to get the deal over the line. Ultimately, however, the remedies proposed did not resolve SAMR’s concerns.

SAMR did not stop there in its action against Tencent. Only two weeks later, SAMR issued a penalty decision against Tencent for failing to file its acquisition of China Music Corporation back in 2016. According to the decision, Tencent owned 10 more than 80% of the online music broadcasting platform market in China as a result of this unfiled transaction.

In addition to the customary financial penalty (RMB500,000), SAMR also ordered Tencent to take remedial measures to restore market competition – including in particular to abolish its exclusive music licensing rights. The decision marks the first time that SAMR has ordered additional remedial measures to restore market competition on top of a fine in a failure to file case (despite it having the explicit right under the AML to do so).

We have previously reported on SAMR’s increased scrutiny of the tech sector over the last couple of years, including its string of gun-jumping sanctions and its record RMB18.2bn (USD2.8bn) abuse of dominance fine on Alibaba. These recent decisions are further examples of SAMR’s resolve to keep the tech sector in check. We expect more enforcement to follow in both the antitrust and merger control fields.

Industrial & Manufacturing

European Commission’s car emissions cartel decision for first time calls out technical development collusion

The European Commission (EC) has found that five car manufacturers ‒ Daimler, BMW, Volkswagen, Audi and Porsche ‒ illegally colluded to restrict competition in the area of emission cleaning technology for diesel cars. According to the EC, meetings between them started as legitimate technical cooperation which enabled them to develop selective catalytic reduction systems to meet new EU nitrogen oxide cleaning regulatory requirements. However, the EC alleges that they became unlawful when the manufacturers coordinated their behaviour to limit the full potential of the technology. The EC alleges that, for over five years, they agreed on elements of the system and exchanged sensitive information which reduced the competitive uncertainty of the market. According to the EC, they indicated to each other that they would not aim to clean harmful emissions above the minimum standard required by EU law, despite the relevant technology being available.

It is the first time that the EC has found that cooperation on technical elements, as opposed to price fixing or market sharing, amounts to cartel behaviour. The novelty of the EC’s decision is reflected in a 20% reduction in the level of the fine. After reductions under the leniency regime (including full immunity for Daimler from a EUR727m fine) and an across-the-board 10% discount for settlement, the total fines imposed top EUR875m.

Notably, to mitigate any chilling effect the decision may have on pro-competitive discussions, the EC has provided guidance to the companies on aspects of their technical cooperation which do not raise competition concerns: certain standardisation of products, the discussion of certain quality standards and the joint development of a software platform. Once published with the settlement decision, this guidance will give pointers to other manufacturers looking to collaborate on R&D and product development. Executive Vice-President Vestager noted that companies can lobby together and prepare a joint position on future legislation. And the EC dropped an aspect of the case relating to alleged delayed introduction of Otto particle filters for petrol cars and raised in its 2019 statement of objections given a lack of sufficient evidence.

As Vestager points out, the EC’s decision is an example of its determination to pursue anti-competitive conduct in particular where it restricts competition to the detriment of innovation and threatens the EU’s Green Deal objectives. Future similar cases can expect robust enforcement.

Life Sciences

Antitrust authorities crack down on excessive drug pricing with record fines

Historically, excessive pricing cases have been rare in Europe. Our blog post on a 2018 Organisation for Economic Cooperation and Development round table discussion sets out why this has been the case. However, particularly in the pharmaceutical sector, there has been recent increased attention on the conduct as a form of abusive pricing. For example, we reported in February on the European Commission (EC)’s decision to close its excessive pricing probe into Aspen with legally binding commitments. For the cancer medicines under investigation, these detailed commitments involve price reductions, price ceilings and supply guarantees. With antitrust authorities seeking to prioritise consumer welfare, it was just a matter of time before other cases would come to fruition. This month we have seen a couple of infringement decisions imposing deterrent-setting fines.

First up, the UK Competition and Markets Authority (CMA) imposed recording-breaking fines of over GBP260m on several drug makers for competition law breaches in relation to the supply of generic hydrocortisone tablets. Of that total fine, GBP155m fell on Accord-UK and its parent and former parent firms for charging the UK National Health Service (NHS) excessive and unfair prices for the tablets for almost 10 years. The CMA found that prices for the tablets rose by over 10,000% compared to the original branded version of the drug. Our blog provides further detail on the case, including on the related “pay for delay” market sharing element. Notably, CMA Chief Executive, Andrea Coscelli, stated that the penalty “serves as a warning to any other drug firm planning to exploit the NHS”.

The CMA’s decision was followed just a few weeks later by further fines. The CMA found that Advanz charged excessive and unfair prices for certain thyroid tablets. According to the authority, the 1,110% price increase of tablet packs from 2009 to 2017 was not driven by any meaningful innovation or investment, volumes remained broadly stable and costs did not increase significantly. Total fines amount to GBP101.4m.

Also this month, the Dutch competition authority (ACM) issued its first ever penalty for excessive pricing. It fined Leadiant nearly EUR20m for charging an excessive price for an orphan drug used to treat a rare metabolic disease. Leadiant implemented significant price increases on multiple occasions, which the ACM deemed abusive. The ACM emphasised that Leadiant’s procurement of the manufacturing rights concerned a small and low-risk investment for a drug that had already existed for years, which in the ACM’s view did not merit such a big price increase.

Leadiant plans to challenge the decision. It is also under investigation in other EU Member States, including Italy and Spain, relating to price increases for the same drug. With a general focus on protection of citizens’ rights to affordable healthcare, we expect antitrust authorities in EU Member States, at the EU level and in the UK to maintain the momentum and to target excessive pricing in relation to both generic and patent-protected products. Pharmaceutical companies are warned.

A&O antitrust team in publication

Recent publications by members of our global team include:

• David Weaver (senior associate, London): Nascent competition in the UK – all about the potential, first published in the American Bar Association’s Spring 2021 merger control newsletter, the Threshold

• Lukas Rengier (senior associate, Hamburg) and Fabian Kolf (associate Hamburg): Cross-border antitrust litigation in Europe – Practical questions and European Union, chapters from Private Antitrust Litigation 2021, Lexology Getting The Deal Through

Spotlight on Tjarda

A typical working day in Amsterdam involves….

sipping a coffee at our amazing coffee bar, complaining about the weather, having too many Teams meetings and asking partner Kees about the latest gossip that he has read in the tabloids.

If I hadn’t become an antitrust lawyer, I would be….

a competition lawyer.

The best career advice I’ve been given is….

that a career is a marathon, not a sprint.

The most interesting case I’ve worked on….

involved a matter for a client that was under a significant market power assessment, an abuse investigation and at the same time also acquired its biggest competitor. I started to appreciate that competition law is a pretty neat and all-encompassing system.

For me, being a good lawyer/adviser means….

understanding what your client is truly worried about, rather than focusing too much on legal intricacies.

Something I’d like to do but haven’t yet done is….

beating my colleague Cyriel at table football (or beating Cyriel at anything, for that matter).

My ideal weekend in two sentences….

travelling, while not working.

My typical weekend in two sentences….

not travelling, while working.

Something that might surprise you about me is….

that I played competitive karate in my teens (nowadays, I mostly run away fast when in peril).

My top tip for visitors to Amsterdam (when we can travel again) is….

to ask me for top tips when you want to go, because there’s just so much out here. If you’re a music lover, one amazing place is Paradiso – a former church converted into a music venue with I guess the best ambiance in town.