Anticompetitive agreementsAssessment framework
What is the general framework for assessing whether an agreement or concerted practice can be considered anticompetitive?
Under the Competition Act, the general framework in assessing whether an agreement or practice can be considered anticompetitive comprises the following:
- a prohibition on agreements by undertakings, decisions by associations of undertakings or concerted practices that have as their object or effect the significant prevention, restriction or distortion of competition (section 5 of the Competition Act). This statute is similar to article 101(1) of the TFEU except that for the prohibition to apply, the restriction need not affect trade between member states; and
- an exemption to the prohibition set out above (section 6 of the Competition Act). This ‘efficiency defence’ exemption is similar to that of article 101(3) of the TFEU. For the exception to apply, the restriction of competition must fulfil the following four cumulative criteria:
- the restriction contributes to improving the production or distribution of goods or promotes technical or economic progress;
- it allows consumers a fair share of the resulting benefit;
- it does not impose restrictions on the parties that are unnecessary to achieve the benefits; and
- it does not afford the undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.
To what extent are technology licensing agreements considered anticompetitive?
The Finnish competition legislation does not provide particular guidance concerning the assessment of technology licensing agreements. The guidance provided in the European Commission’s Technology Transfer Block Exemption Regulation (316/2014) and related guidelines provide further insight into the assessment of technology licensing agreements.Co-promotion and co-marketing agreements
To what extent are co-promotion and co-marketing agreements considered anticompetitive?
Co-promotion and co-marketing agreements have not yet been investigated in detail by the FCCA. However, the same principles that the European Commission has followed in the assessment of such agreements could be expected to be the starting point of the FCCA’s analysis.Other agreements
What other forms of agreement with a competitor are likely to be an issue? How can these issues be resolved?
As the prohibition of agreements restrictive of competition in the Competition Act is a general provision and can apply to all kinds of conduct that have as their object or effect the restriction of competition; in particular, competitors should always carefully assess any cooperation agreements that include restrictive terms or could otherwise be seen to have a restrictive purpose or effect.
Depending on the arrangement, confidentiality provisions may be sufficient to mitigate competition concerns (eg, appropriately limiting the amount of information exchanged between two pharmaceutical companies that engage in joint R&D). However, in many kinds of cooperation between competitors, confidentiality agreements alone may not be sufficient to resolve competition concerns.Issues with vertical agreements
Which aspects of vertical agreements are most likely to raise antitrust concerns?
Similar to the European Commission’s Vertical Block Exemption Regulation (330/2010), the main aspects of vertical agreements that raise concern are provisions relating to the resale pricing of products by a distributor and territorial, or customer restrictions imposed on a distributor. However, a distinctive feature of the Finnish pharmaceutical sector is the extensive regulation concerning the pricing of pharmaceutical products. An assessment of, for example, restrictions in resale pricing by a distributor, should take into consideration the complex regulatory framework, which affects the possibilities of pricing products at the various levels of distribution.
As another distinct feature, currently only two major wholesalers exist in Finland, and manufacturers typically distribute their products only through one of them (the single-channel distribution system). The FCCA has investigated the single-channel distribution system on several occasions and has closed each of its reviews without further measures, most recently in 2012. In a recent merger clearance decision (Kesko Oyj/Oriola Oyj/JV ), some of the market players raised concerns relating to the single-channel distribution system and the possible future development of the retail sale of medicines owing to Oriola’s vertical integration. The FCCA did not see the vertical integration as a threat to competition owing to the uncertainty relating to possible deregulation of the retail sale of medicines.Patent dispute settlements
To what extent can the settlement of a patent dispute expose the parties concerned to liability for an antitrust violation?
The FCCA has not issued any decisions concerning patent settlement agreements. However, the guidance provided in the European Commission’s technology transfer guidelines and the cases investigated by the European Commission and the General Court’s judgment in Lundbeck (T-472/13) would likely be a starting point in the FCCA’s assessment of the competitive effects of a patent settlement agreement entered into by companies in the pharmaceutical sector.Joint communications and lobbying
To what extent can joint communications or lobbying actions be anticompetitive?
The FCCA has not issued any decisions concerning joint communications or lobbying actions in the pharmaceutical sector. The Market Court took a stand on lobbying actions in December 2017 as a result of the FCCA’s fine proposal where it suggested penalty payments for several bus companies: Finnish Bus and Coach Association and travel-services provider Oy Matkahuolto Ab.
According to the Market Court, lobbying actions, negotiations and discussions relating to the ongoing legislative reform were part of normal trade association’s lobbying actions. Whereas, if the parties discuss, agree or decide on anticompetitive measures (eg, collective actions against a market player, possible effects of the legislative reform on the business or future market behaviour in the changed circumstances) alongside the lobbying actions, these would be considered as infringements (Market Court, Decision No. MAO:781/17, 14 December 2017, under appeal in the Supreme Administrative Court).Public communications
To what extent may public communications constitute an infringement?
The FCCA has not issued any decisions concerning public communications in the pharmaceutical sector. In general, public communications of intended future price increases or other future behaviour could constitute an infringement if such communications would lead to coordination between competing companies. The FCCA has, for example, advised the Finnish banks not to indicate their future loan margins of mortgages (which are a significant part of the price of the mortgage for the customers) in press releases as this could constitute an infringement by means of price signalling.
The Finnish case law on public communications as an infringement relates to trade associations and their price recommendations for their member companies. The Finnish courts have issued two recent decisions where they found that the trade association’s public communications on prices and price increases constituted an infringement (the Finnish Bakery Federation, Leipuriliitto ry, Decision No. MAO:121/16, 29 February 2016, and the Finnish Hairdressers’ Association, Hiusyrittäjät ry, Decision No. 1993/2013, 14 June 2013). In addition, the EU case law on public communications (eg, Commission Decision AT.39850 Container Shipping) would likely be taken into account in the FCCA’s assessment.Exchange of information
Are anticompetitive exchanges of information more likely to occur in the pharmaceutical sector given the increased transparency imposed by measures such as disclosure of relationships with HCPs, clinical trials, etc?
The fulfilment of transparency requirements set forth in mandatory legislation is not likely to give direct rise to anticompetitive information exchange caught by the Competition Act, neither should anticompetitive information exchange be considered more likely in the pharmaceutical sector in Finland, as the general guidance provided by the EU Commission regarding information exchange is well known by the Finnish pharmaceutical companies, and they strictly follow applicable competition rules.