Thursday, October 14, 2010
Posted by D. Daniel Sokol
Kristina Nordlander & Patrick Harrison (Sidley Austin) predict the General Court’s AstraZeneca Judgment Set to Embolden Commission.
ABSTRACT: Five years and two weeks is a long time to wait for a judgment on appeal. For many, it is too long. However, such is the nature of the General Court's July 1, 2010 judgment in AstraZeneca v Commission that innovative pharmaceutical manufacturers and other companies who are at risk of being found dominant may well wish the Court had never issued its judgment at all. Although the precise implications of the AstraZeneca judgment for the European Commission's ("Commission") enforcement policy under Article 102 of the Treaty on the Functioning of the European Union ("TFEU") will only gradually become known, it seems clear that the Commission will be emboldened in its pursuit of alleged abuses of dominance.
This article seeks to explore key parts of the judgment and their potential impact on Article 102 TFEU enforcement in the EU. Section II of the article sets out the background to the Court's judgment. Section III examines some of the more important points arising out of the judgment, including:
a) the findings on market definition, where the Court's upholding of the Commission's decision may lead to further Commission enforcement in cases based on narrow and controversial market definitions;
b) the broad-ranging "transparency" standards for dominant companies when dealing with regulatory authorities;
c) the findings that representations to authorities can constitute abuses under Article 102 TFEU even absent implementation, fraud, or bad faith and the resultant inconsistency with U.S. jurisprudence;
d) the Court's observations in relation to the introduction of new products and the withdrawal of their older equivalents;
e) the Court's pharmaceutical sector-specific observations; and
f) why the Court's €7.5 million reduction in AstraZeneca's fine is of little significance going forward.
Section IV concludes by commenting on the impact the judgment may have on the Commission's enforcement policy in the pharmaceutical sector and on companies who are at risk of being found dominant on EU markets.