Friday, January 11, 2008
The Concept of an Agreement and Beyond: How to Block Parallel Imports of Pharmaceuticals to Protect the Heart of Competition
Posted by D. Daniel Sokol
Luis F. Souto Soubrier of the European University Institute has posted on The Concept of an Agreement and Beyond: How to Block Parallel Imports of Pharmaceuticals to Protect the Heart of Competition.
ABSTRACT: This research was my contribution to the book EC Competition Law: A Critical Assessment (Hart Publ. 2007) and it is posted here with the publisher's kind permission. The paper analyzes in detail the borderline between collusion and unilateral conduct by elaborating on the concept of an agreement within the meaning of Article 81 of the EC Treaty as applied to vertical deals. Comparisons are made with US antitrust law where appropriate. By way of implication, I also address the analysis of the second prong in Article 81, namely, the consideration of when an agreement has as its object or effect the restriction of competition. Both prongs are in inverse proportion: when one of them is broadly construed, it becomes imperative to narrow down the interpretation of the other to achieve an optimal scope of Article 81. The thesis put forward in this work is that reforms in relation to the definition of agreement should be accompanied with the adoption of a more refined interpretation of when an agreement restricts competition. Only the consistent narrowing of the latter expression will take undue pressure from the definition of agreement. Finally, since all of the vertical cases discussing the concept of agreement deal with parallel trade, the paper also delves into this underlying substantive issue. The discussion concentrates on the thorny question of reimportation of pharmaceuticals within the Single market.