Newsflash_adalat.doc

Newsflash EU / Competition and Regulatory
JUDGEMENT OF THE COURT OF JUSTICE IN THE 'ADALAT' CASE
On 6 January 2004, the Court of Justice
Commission imposed a fine of 3 million ecus. delivered its long-awaited judgement in the Bayer challenged the decision before the Court Bayer ‘Adalat’ case. The judgement confirms a restrictive interpretation of the notion ‘agreement’ within the meaning of Article 81(1) In October 2000, the Court of First Instance
annulled the Commission’s decision (Case T- 41/96, 2000 ECR II-3383). The Court of First The facts of the case relate to the distribution of Instance determined there was no evidence that pharmaceutical products within the European Bayer imposed an export ban on its wholesalers, Union. However, the judgement’s scope is much broader, since it sets the legal standard to compliance with the alleged export ban, or that establish the existence of an ‘agreement’ within Bayer sought any form of agreement from the the meaning of Article 81(1) of the EC Treaty, wholesalers concerning the implementation of its more in particular in vertical relationships. policy. Nor did the Commission prove that the wholesalers adhered to the unilateral policy of As a reminder, the case concerns Bayer’s policy preventing parallel imports adopted by Bayer. of restricting the supplies of its product ‘Adalat’ The Court therefore held that the Commission to the level of the local needs of its French and made an error in the legal assessment of those Spanish wholesalers in an effort to reduce facts by holding it to be established that there parallel imports into the United Kingdom. The was a concurrence of wills between Bayer and wholesalers concerned had reduced their orders the wholesalers to limit parallel exports to the to a given level to give Bayer the impression United Kingdom, justifying the conclusion that they were complying with its declared intention there was an agreement within the meaning of to cover only the needs of their traditional Article 81(1) of the Treaty. Furthermore, the wholesalers continued to try and obtain packets Commission’s argument that the mere finding of of Adalat for export by using different systems, fact that the wholesalers have maintained their such as placing orders indirectly through small business relations with Bayer is sufficient to prove the existence of an agreement. The Court also pointed out that the very concept of an The European Commission in its 1996
Decision (1996 O.J. L201/1) held that the supply quota policy adopted by Bayer constituted an export ban which was incorporated into the The Bundesverband der Arzneimittel-Importeure continuous commercial relations with its eV and the European Commission appealed the wholesalers. Consequently, the Commission judgement mainly criticising the – in their view - took the view that there was an agreement excessively restrictive assessment of the concept of an ‘agreement’ under Article 81 (1) of the EC infringed Article 81(1) of the Treaty. The Rue Neerveldstraat 101-103, 1200 Brussels; Tel. +32 (0)2 743 43 43; Fax +32 (0)2 743 43 10 Frankrijklei 38, 2000 Antwerp; Tel. +32 (0)3 226 50 06; Fax +32 (0)3 213 07 18 Amsterdam, Antwerp, Arnhem, Brussels, Eindhoven, Luxembourg, Rotterdam, Aruba, Curaçao, Frankfurt, Geneva, London, New York, Paris, Singapore, Tokyo



In its judgement, the Court of Justice
distributing orders for export amongst the dismissed the appeal, and provided further various branches, far from establishing the guidance as to the interpretation of the notion ‘agreement’ within the meaning of Article 81(1) constituted an attempt by the wholesalers to turn the application of Bayer's unilateral policy to their advantage, the implementation of which The Court affirmed that the existence of an did not depend on their cooperation. In this agreement within the meaning of Article 81(1) of the EC Treaty can be deduced from the conduct of the parties concerned. However, the Court clarified that such an agreement cannot be The importance of the judgement lies in the based on what is only the expression of a clear demarcation made by the Court between unilateral policy of one of the contracting parties, which can be put into effect without the unilateral policy. Especially in vertical relationships, where there may be a situation of tacit acceptance of a policy defined by the Furthermore, for an agreement to be considered supplier, this distinction is not always properly as having been concluded by tacit acceptance, it made, as the Adalat case illustrates. Ultimately, is, as the Court states, ‘necessary that the the facts in each particular case will be decisive. manifestation of the wish of one of the contracting parties to achieve an anti- Finally, the Court of Justice rightly points out competitive goal constitutes an invitation to the that the Commission decision at stake in the other party, whether express or implied, to fulfil Adalat case ‘confined itself strictly to the that goal jointly, and that applies all the more examination of one complaint, alleging the where, as in this case, such an agreement is not existence of an agreement within the meaning of at first sight in the interests of the other party, Article 81(1) of the Treaty between Bayer and namely the wholesalers’ (point 102 of the its wholesalers, and that it did so in the context of a market defined by reference to the main therapeutic indications for the product in Contrasting the present case with the Sandoz question, namely Adalat’ (point 42 of the case (Case C-277/87, 1990 ECR I-45), Bayer judgement). This holds open other possible was found to require no particular form of approaches by the European Commission, such as the application of different market definitions Furthermore, in the view of the Court, the or scrutinising the practice under Article 82 of wholesalers’ strategy to make Bayer believe that the EC Treaty prohibiting the abuse of a the needs of the national markets had grown by For further information, please contact: This newsflash provides general information on legal developments and is not intended to be comprehensive, nor does it constitute legal advice. Neerveldstraat 101-103 Rue Neerveld, 1200 Brussel Bruxelles. Tel. +32 (0)2 743 43 43 Fax +32 (0)2 743 43 10 Frankrijklei 38, 2000 Antwerpen. Tel. +32 (0)3 226 50 06 Fax +32 (0)3 213 07 18 Amsterdam, Antwerp, Arnhem, Brussels, Eindhoven, Luxembourg, Rotterdam, Aruba, Curaçao, Frankfurt, Geneva, London, New York, Paris, Singapore, Tokyo

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