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?

Under section 7 of the Competition Act, the following conduct in particular, may be considered anticompetitive by a dominant company:

  • directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
  • limiting production, markets or technical development to the prejudice of consumers;
  • applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
  • making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial use, have no connection with the subject of such contracts.

This statute is similar to article 102 of the TFEU. The list of conduct above is not exhaustive and, in principle, all kinds of conduct with an exclusionary, exploitative or distortionary effect on the market could fall within the prohibition on the abuse of a dominant position.

De minimis thresholds

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

The Finnish competition legislation does not include any particular de minimis threshold for a conduct to be found abusive in the pharmaceutical sector or any other industries. However, under the Competition Act, the FCCA is entitled to prioritise the cases it investigates, and can close a case without further measures if it is, for instance, unlikely that the conduct in question would have a significant impact on the conditions of sound and effective competition. The EU case law (eg, C-413/14 P Intel and previous judgments) would likely be taken into account in assessing the coverage of the abusive conduct.

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?

In principle, the approach to market definition by the antitrust authorities is the same in the context of unilateral conduct and mergers. However, similar to the European Commission, in most merger cases the FCCA has left the market definition open and assessed the potential competition effects based on the notifying parties’ view. With regard to unilateral conduct cases, the FCCA pays more attention to the market definition and conducts a thorough assessment on the markets due to the nature of the dominance cases.

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 Finnish competition legislation does not include any particular thresholds for the assessment of dominance in the pharmaceutical sector. However, in general a market share of 40 per cent in a properly defined relevant market, combined with other factors, may lead to a presumption of dominance, and a market share of 50 per cent may, as such, lead to the presumption of dominance.

To date, the FCCA has not found any company in the pharmaceutical industry to hold a dominant market position.

It should not be sufficient to find dominance solely on the basis of ownership of an intellectual property right, such as a patent. However, depending on market circumstances, the ownership of a patent may be a relevant factor in establishing dominance.

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?

The FCCA has not issued any decisions where it would have considered that an application for the grant of a patent would have been an antitrust violation or a part of such a violation. However, the EU Court’s judgment in AstraZeneca v Commission (C-457/10 P) would likely be seen as a relevant precedent in assessing conduct relating to applications for intellectual property protection.

The FCCA has not issued any decision where it would have considered the enforcement of a patent to constitute an antitrust violation or a part of such violation. The FCCA would likely consider the EU Court’s precedent and the European Commission’s practice as relevant, should a case relating to the enforcement of patents come under investigation.

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

The FCCA has not issued any decisions concerning life-cycle management strategies of pharmaceutical companies. Nonetheless, pharmaceutical companies should be careful in assessing whether life-cycle management strategies include any anticompetitive means to exclude competitors from the market. While pharmaceutical companies may legitimately seek intellectual property protection for their innovations to the fullest extent permitted by law, measures to artificially extend protection beyond the purpose of the intellectual property protection might, in particular circumstances, expose the patent owner to liability for an antitrust violation.

Communications

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

The FCCA has not issued any decisions where it would have considered that communications or recommendations aimed at the public, HCPs or health authorities would have been an antitrust violation or a part of such a violation. If communications or recommendation aimed at the public or healthcare professionals would take place during an ongoing tender process, or they would include other recommendations than those aiming at better quality and professionalism of the tender processes, it is likely that the FCCA would assess the possible anticompetitive effects of the communications or recommendations carefully. However, contacting public authorities to indirectly influence the competitive circumstances relating to ongoing legislative reform has been considered normal lobbying actions and thus acceptable (eg, Market Court, Decision No. MAO:781/17, 14 December 2017).

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?

Authorised generics, as such, have not been seen to raise issues under Finnish competition law. However, pharmaceutical companies must always assess whether their conduct could constitute an abuse of a dominant position or whether an agreement concerning generics could have as its object or effect the restriction of competition.

Restrictions on off-label use

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

The FCCA has not issued any decisions where it would have considered that actions taken by a patent holder to limit off-label use would have been an antitrust violation. However, the EU Court’s judgment in Roche and Novartis v Commission (C-176/16 P, Avastin/Lucentis) would likely be seen as a relevant precedent in assessing the possible anticompetitive effects of actions to limit off-label use of medicines.

Pricing

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

Pricing conduct raises antitrust risks when the pricing is predatory, discriminatory or excessive, or where unfair price increases without cost justification take place. In practice, all pricing conduct with an exclusionary, exploitative or distortionary effect on the market could constitute an abuse of dominant position. These are assessed in line with the application of article 102 of the TFEU.

The FCCA has not issued any decisions where it would have considered high prices in the pharmaceutical sector although high prices in general have been assessed several times in other industries. However, these cases are rather old and the assessment has been somewhat formal. It is likely that the FCCA will concentrate more on economic effects in its future assessments on high prices. In addition, the FCCA would likely take the recent case law on excessive pricing (eg, ongoing Commission investigation on Aspen Pharma’s excessive pricing and Italian decision on Aspen Pharma’s unfair price increases) into consideration in assessing high prices in the 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?

The pharmaceutical sector does not enjoy any particular exemption from the application of Finnish competition law. However, the Finnish legislation concerning the pharmaceutical sector should be taken into consideration when assessing whether a particular type of conduct is contrary to competition law. This may be relevant, in particular concerning the distribution of pharmaceutical products in Finland in view of the existing legislation on, for example, pricing and availability.