On 15 May 2012, Advocate General (AG) Mazak gave an opinion on the appeal by AstraZeneca against a judgment by the General Court that upheld the European Commission’s decision to fine AstraZeneca for abusive patent misuse.
In 2005, the EU Commission fined AstraZeneca €60 million for having abused its dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission found two separate abuses, which it viewed as part of AstraZeneca’s strategy to exclude generic competitors from its ulcer drug and to restrict parallel imports of the drug.
AstraZeneca appealed the Commission’s decision to the General Court, seeking annulment of that decision, but the General Court upheld the majority of the findings of the Commission. AstraZeneca subsequently appealed the ruling of the General Court to the Court of Justice of the European Union (CJEU). Its argument is that the General Court made a number of errors of law in its assessment of the two abuses. AstraZeneca has also challenged the level of fine.
With respect to the first finding of abuse (providing misleading information to national patent offices, which caused uncertainty, delay and disruption to generic firms’ preparations for market entry for generic products), the AG concluded that the General Court had made detailed and clear findings of fact about AstraZeneca’s actions and had found objectively that its representations to the patent offices were lacking in transparency and highly misleading. The AG took the position that the General Court did not have to examine AstraZeneca’s subjective beliefs on the interpretation of law; it only had to assess its actual conduct.
With respect to the second finding of abuse (selective deregistration of marketing authorisations specifically in countries where generic companies had applied for marketing authorisations covering generic versions of the drug, which prevented the generic companies from using a simplified and faster procedure to obtain their authorisation), the AG upheld the finding of abuse and found that the main feature of the abuse was AstraZeneca’s selective deregistration in Denmark, Norway and Sweden. What constituted the abuse was the context in which deregistration took place and not the mere fact of deregistration.
The AG also dismissed AstraZeneca’s claim that the fine imposed on it was excessive and should have been reduced owing to the novelty of the infringements and their minimal effects on competition. The AG reiterated that the General Court concluded that the actual substance of the abuses was not novel and clearly were highly anti-competitive and capable of having a significant effect on competition.
The judgment of the CJEU is expected by the end of this year and although the opinion of the AG is not binding on the CJEU, in the majority of cases the judgment does follow the opinion.
The AstraZeneca case is the first in which abuse of regulatory process has been held to be an abuse of a dominant position under EU competition law. In the event that this approach is adopted by the CJEU, then it can be expected that more cases of this nature will be brought and not necessarily just against the pharmaceutical sector. If the CJEU's final judgment follows the recommendations of the AG, this will confirm that an abuse of regulatory procedures can constitute an abuse of a dominant position under EU competition law.