Anticompetitive unilateral conduct

Abuse of dominance

In what circumstances is conduct considered to be anticompetitive if carried out by a firm with monopoly or market power?

A firm with monopoly or market power would be participating in anticompetitive conduct if it were to abuse its position, for example, if it:

  • imposes, directly or indirectly, unfair purchase or selling prices or other unfair trading conditions;
  • limits production, markets or technical development to the detriment of consumers;
  • applies dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
  • makes the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which, by their nature or according to commercial usage, have no connection with the subject of such contracts; or
  • refuses access to another undertaking to a network or other essential facilities that it controls, when appropriate payment is available, in a situation where the other undertaking cannot act as a competitor of the firm, upstream or downstream, unless the latter can demonstrate that, for operational or other reasons, such access cannot reasonably be provided.
De minimis thresholds

Is there any de minimis threshold for a conduct to be found abusive?

Nor does Portuguese law foresee any such threshold nor are there any guidelines on this subject. If the conduct is distorting the market, the size of market or number of customers or tenders concerned do not affect the qualification of such conduct as abusive.

Market definition

Do antitrust authorities approach market definition in the context of unilateral conduct in the same way as in mergers? If not, what are the main differences and what justifies them?

The way the relevant market is defined obeys the same principles, whether in the context of unilateral conduct or in a merger.

Establishing dominance

When is a party likely to be considered dominant or jointly dominant? Can a patent owner be dominant simply on account of the patent that it owns?

The current Competition Legal Regime, unlike the former Competition Act, no longer provides a definition for dominant undertakings. However, the AdC has maintained its understanding that an undertaking is dominant when it has sufficient market power to act independently on the market, with no or limited influence of clients, competitors or any third party.

IP rights

To what extent can an application for the grant or enforcement of a patent or any other IP right (SPC, etc) expose the patent owner to liability for an antitrust violation?

In general terms, a simple application for the grant of a patent or any other IP right would not expose the patent owner to liability for an antitrust violation unless this is deemed an abuse of a dominant position.

In the same way, the enforcement of a patent or any other IP right does not make the patent owner liable for an antitrust violation. However, the particular conditions of the case would need to be assessed to establish whether this enforcement is an abuse of a dominant position.

When would life-cycle management strategies expose a patent owner to antitrust liability?

If the purpose of such strategies is preventing or delaying the entry of generics into the market, life-cycle management strategies are highly likely to expose the patent owner to liability for an antitrust violation. However, if the strategies have objective and reasonable motives that can be demonstrated, there should be no liability for antitrust violation.

Communications

Can communications or recommendations aimed at the public, HCPs or health authorities trigger antitrust liability?

Normally, these types of communications and recommendations would not trigger antitrust liability. The issues that normally arise concern the rules of publicity since medicines are subject to stricter rules. As long as the communications contain truthful, updated and accurate information, it is not likely that any concerns arise regarding antitrust liability.

That would not be the case if the communications or recommendations are aimed at preventing a new player entering the market.

Authorised generics

Can a patent owner market or license its drug as an authorised generic, or allow a third party to do so, before the expiry of the patent protection on the drug concerned, to gain a head start on the competition?

There is no direct prohibition that prevents a patent holder from marketing its drug as an authorised generic before the expiry of the patent protection. However, from a competition perspective, this situation may raise some concerns, since it may be deemed to delay or prevent the market entry of generics. Since there is no publicly known decision on a similar case, it is difficult to foresee the position of the AdC on this matter.

Furthermore, medicines are generally prescribed by reference to the active substance, and consumers may choose to buy generic drugs, which are normally less expensive. Therefore, changing to generics may not be an economically attractive solution when the patent protection is still in force.

Restrictions on off-label use

Can actions taken by a patent owner to limit off-label use trigger antitrust liability?

This limitation arises from Portuguese law. It would not be possible in Portugal to promote off-label use. Only the approved label use may be promoted.

Pricing

When does pricing conduct raise antitrust risks? Can high prices be abusive?

Only medicines that are not subject to prescription or co-paid by the state may have their price established without a specific threshold. If prices are considerably higher than in other European countries (especially the reference countries), this could be seen as abusive if the pharmaceutical company has a dominant position in the market and makes use of it to determine higher prices. Otherwise, a company is free to establish its own prices (when not subject to legal maximums). If the high price results from a concerted action by two or more companies, this would be anticompetitive.

Sector-specific issues

To what extent can the specific features of the pharmaceutical sector provide an objective justification for conduct that would otherwise infringe antitrust rules?

The possible justifications for conduct that would otherwise infringe antitrust rules should not be affected by the specific features of the pharmaceutical sector. The AdC analyses each case, requests opinions when required or deemed relevant, and verifies if the conduct in the pharmaceutical sector may be considered justified.