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Australia – Competition And Consumer Commission Loses Abuse Of Dominance Case.

2 June, 2015

 

Legal News & Analysis – Asia Pacific – Australia – Competition & Antitrust

 

On 25 February 2015, the Australian Competition and Consumer Commission (“ACCC”) lost its case in the Federal Court of Australia against Pfizer Australia Pty Ltd (“Pfizer”). The ACCC took action against Pfizer for an alleged misuse of market power and exclusive dealing practices by Pfizer in respect of its supply of atorvastatin (a drug used to treat cholesterol) to pharmacies.

 

The ACCC alleged that Pfizer offered significant discounts to pharmacies and the payment of rebates conditional on pharmacies acquiring a minimum volume of up to 12 months’ supply of Pfizer’s generic atorvastatin product. The ACCC saw the strategy as a way for Pfizer to fend off increasing competition from other generic atorvastatin products, and ultimately considered that the practice would be in breach of the Competition and Consumer Act 2010 (“CCA”). Specifically, under section 46 of the CCA corporations that have substantial market power are prohibited from taking advantage of that power for certain prescribed purposes (such as eliminating or damaging a competitor, or preventing new entrants into a market, etc).

 

In dismissing the case, the Federal Court found that whilst Pfizer had taken advantage of its market power by engaging in the alleged conduct, Pfizer’s market power was no longer “substantial” at the time the offers were made in January 2012. The Court also determined that the ACCC had failed to establish that Pfizer had pursued its conduct for the proscribed purpose of deterring or preventing competitors from engaging in competitive conduct or for the purpose of substantially lessening competition.

 

It was announced in March that the ACCC intends to appeal the decision to the Full Federal Court.

 

In Singapore:

 

Section 47 of the Singapore Competition Act (Cap.50B) (“Act”) prohibits the abuse of a dominant position. To date, the Competition Commission of Singapore (“CCS”) has only issued one infringement decision in respect of an abuse of dominance (against SISTIC.com Pte. Ltd. in respect of its exclusive contracts with event promoters and venue operator partners). A minimum purchase requirement could potentially amount to an abuse of dominance in Singapore, depending on all of the factors of the case. The key consideration for CCS would be whether the practice has a substantial exclusionary effect (foreclosure effect) on competition within a relevant market.

 

Drew & Napier

  
For further information, please contact:  

Cavinder Bull, Director, Drew & Napier

[email protected]

 

Chong Kin Lim, Director, Drew & Napier

[email protected]

 

Scott Clements, Drew & Napier

[email protected]

 

Homegrown Competition & Antitrust Law Firms in Australia

 

International Competition & Antitrust Law Firms in Australia

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