Introduction
The Portuguese Competition Authority (PCA) has recently seen a decision finding the infringement of competition rules by abuse of a dominant position as a result of a margin squeeze upheld by the Portuguese specialized Court of Competition, Regulation and Supervision (TCRS). The ruling was adopted on October 20, 2016, and will soon be published on the website of the PCA.
The case refers to the markets for the sale of commercial data of pharmacies as well as market studies based on that data, in which the PCA considered there had been an abuse of dominant position involving the National Association of Pharmacies (ANF) as well as three other entities within the same group, notably Farminveste and Farminveste – Investimentos, both active in the sale of the commercial data of pharmacies and HMR – Health Market Research, in charge of the execution of market studies.
The PCA initiated an in-depth investigation into these markets following a complaint by IMS Health, a competitor in the downstream market, which reported that the prices practiced by the ANF group in the sale of commercial data combined with the prices charged for the market studies rendered it impossible, even for an equally efficient market player, to cover its costs for the sale of market studies.
In its infringement decision of 2015, the PCA found that these entities engaged in margin squeeze practices from 2010 to 2013, leading to the exclusion from the market for the provision of market studies and thus, ultimately, harming consumers, in this case, the pharmaceutical laboratories. The PCA further noted that this was serious exclusionary conduct contrary to both the Portuguese Competition Act and the Treaty on the Functioning of the European Union and, therefore, imposed fines amounting to EUR 10.34 million on the ANF group.
On appeal, the TCRS generally upheld the findings of the PCA but decided to decrease the fines imposed to a total amount of EUR 6.89 million, having taken into consideration the markets affected by the abusive practices.
Comment
This case constitutes, undoubtedly, an important record for the PCA. As can be verified in recent years and is demonstrated by statistics of the PCA’s 2015 Activity Report, the authority has been trying to consolidate its decisional practice in the antitrust field by presenting a better response time to cases and delivering, in general, more detailed investigations and solid decisions.
In the past, the PCA saw its high-profile decisions of abuse of dominance being reversed by the courts and for a long time these unilateral conducts were not targeted anew. The recent case against ANF is the first where a margin squeeze issue arose and the second case of the abuse of dominant position to be upheld by a court, considering that in 2013 the PCA also fined Sport TV € 3.7 million for abusing its dominant position in the market of premium sports channels (both the TCRS and the Lisbon Court of Appeal later confirmed the decision and reduced the penalty to € 2.7 million).
Finally, it should also be noted that the establishment of the TCRS in 2012 has endowed Portuguese jurisdiction with a specialized court for these matters and thus provided a better judicial response both in terms of time for the handling of cases as well as in the quality of the rulings adopted.
