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?

Section 11 of the Competition Act mirrors Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement and prohibits the abuse of an undertaking's dominant position. The Competition Act provides no definition of abuse, but mentions the same examples as the corresponding TFEU and EEA prohibitions – namely:

  • setting unreasonable purchase or sales prices or other unreasonable business terms;
  • limiting production, output or technical development to the disadvantage of consumers;
  • imposing different terms for equivalent goods or services and therewith disadvantaging competition; and
  • tying and bundling.

In practice, all exclusionary and exploitative market behaviour by a dominant market player may fall foul of Section 11 of the Competition Act in the same manner as under Article 102 of the TFEU and Article 54 of the EEA Agreement.

De minimis thresholds

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

There is no formal de minimis threshold for conduct to be found abusive pursuant to Section 11 of the Competition Act. Based on statements in the preparatory works to the act regarding the importance of competition in local and niche markets, the Norwegian Competition Authority (NCA) has previously applied the act in small and local markets on occasion.

However, like EU and EEA competition law, Norwegian competition law takes an effect-based approach to whether conduct is considered abusive. Further, the European Commission's rules on enforcement priorities set out in Article 102 of the TFEU are used as guidelines when applying Article 11 of the Competition Act.

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?

There is no practice from Norway addressing this issue. In general, investigations of alleged abusive conduct focus on the effects that the abuse has had from the time that it occurred until the present, while analysis in the context of a merger investigation will take a more prospective approach and focus on likely future effects in the market.

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?

Dominance for the purpose of Section 11 of the Competition Act is established on a case-by-case basis. Market shares are generally considered a good proxy for whether dominance can be established but are not decisive. Dominance will be less likely if the undertaking has a market share of less than 40% and is presumed if its market share exceeds 50%.

Patent owners may sometimes be dominant based on a patent alone. The fact that ownership of a patent can result in dominance is presupposed in the system of compulsory licences pursuant to the Patent Act, under which the NCA can order a patent owner to grant licences to a third party if certain conditions are fulfilled. The preparatory works of these provisions suggest that the rules on abuse of dominance in Section 11 of the Competition Act can apply to patent owners simply on account of the patent, but only in special circumstances.

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?

As in the European Union, a patent application filed in bad faith can expose the patent owner to liability for an antitrust violation. Strategies such as misleading patent offices and legal steps in bad faith in order to keep competitors out can amount to a violation of Section 11 of the Competition Act.

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

In general, a good-faith life-cycle business strategy should not amount to abuse of a dominant position in violation of Section 11 of the Competition Act. However, the NCA will consider each case on the merits. Relevant factors in the assessment may be whether available evidence supports that the management strategy was made in good faith and that pricing decisions reflect a reasonable business plan covering the life-cycle of the product in question.

Communications

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

Communications or recommendations aimed at the public, healthcare professionals or health authorities may trigger antitrust liability. This may be the case (for example) if a patent owner seeks to dissuade patients, HCPs or authorities from switching to a generic on expiry of the patent.

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?

As far as is known, this issue has not been considered by the NCA. In general, discriminating between different market players or taking steps to marginalise future competition may constitute abuse under Section 11 of the Competition Act. However, this must be balanced against the patent owner's right to take steps to protect its legitimate business interests and the fact that competition law does not exist to protect free riding.

Restrictions on off-label use

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

As far as is known, this issue has not been addressed by the NCA. In general, factually and legally correct objections made in good faith by a patent owner regarding the legality of and risks associated with off-label use of its patented drug should not be viewed as abuse under Section 11 of the Competition Act.

Pricing

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

Low prices may fall foul of Section 11 of the Competition Act to the same extent as under Article 102 of the TFEU and Article 54 of the EEA Agreement. As pharmaceuticals are subject to maximum prices established by the Norwegian state, abusively high prices are not a practical issue in the Norwegian pharmaceutical sector.

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?

In general, it is unlikely that safety concerns or other specific features of the pharmaceutical sector can amount to an objective justification for conduct that would otherwise infringe antitrust rules. In line with European Court of Justice case law, the NCA is likely to take the view that it is up to the legislature or the Norwegian Medicines Agency – and not a private market player – to ensure that such objectives or concerns are addressed.