Bid rigging in pharmaceutical sector
Abuse of dominant position in telecommunications sector
October 2013 was a busy month for the Competition Protection Agency, which issued two long-awaited antitrust decisions.
Following an investigation into the pharmaceutical sector in 2010, the agency has issued a decision against four pharmaceutical wholesalers for cartel activities in contravention of Article 101 of the Treaty on the Functioning of the European Union and its Slovenian equivalent, Article 6 of the Prevention of Restriction of Competition Act. The agency has also issued a new decision on the abuse of a dominant position in the telecommunications sector that contravened Article 9 of the act.
Neither decision is final and the undertakings can appeal before the Administrative Court.
Bid rigging in pharmaceutical sector
In July 2010 the agency instigated a procedure against four wholesale traders in the pharmaceutical sector – Kemofarmacija, Salus, Fermadent and Geopharm – and their joint venture Nensi (although the case was later dropped against the latter). On October 14 2013 the agency established that the implicated undertakings had agreed and/or acted in concert with respect to:
- wholesale prices for pharmaceuticals;
- public tender offers to supply public pharmacies; and
- market/tender allocation.
According to the agency, the facts of the case supported the conclusion that the undertakings had in most cases submitted similar bids in relation to the prices and discounts offered. Even though the prices of pharmaceuticals are regulated in Slovenia, the agency has taken the view that this could not have led the parties to submit such bids, as they were all allowed to offer a price lower than the regulated price. Furthermore, the agency opined that the evidence of the case supported the argument that such actions went beyond mere parallel behaviour. The agency also established that the undertakings had allocated the public tenders according to their current market shares.
Abuse of dominant position in telecommunications sector
Following an administrative court ruling setting aside a 2008 decision in which the agency established that Telekom Slovenije had abused its dominant decision, on October 30 2013 it reached the same conclusion after a renewed procedure.
The agency has not yet published an official press release, but Telekom Slovenije has announced that the decision establishes that it abused its dominant position on the bit stream broadband access interconnection market through the copper network in Slovenia, by restricting ADSL connections for operators (internet providers) to end users with a prior ISDN connection lease. By doing so, the agency argued that Telekom Slovenije has breached Article 9 of the act, the Slovenian equivalent of Article 102 of the Treaty on the Functioning of the European Union.
Slovenian procedural competition law is rather particular and in none of the above-mentioned procedures has the agency yet imposed any fines.
Both decisions are so-called 'administrative decisions', through which the agency establishes an infringement of Slovenian and/or EU competition law whereby fines must be imposed through a separate misdemeanour procedure. As under EU competition law, both infringements may be penalised with a fine of up to 10% of the worldwide turnover of the undertaking concerned. However, due to the specific rules on the misdemeanour procedure, there are convincing arguments that the cap should be calculated against the turnover of the legal entity that committed the breach only, and not that of the single economic entity, as under EU rules.
Judging from existing agency practice, the misdemeanour procedures will be instigated only after the administrative decisions become final. It may therefore take some time before both proceedings come to a (proper) end.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription
