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 19(1) of the GWB prohibits the abuse of a dominant position. This general prohibition does not include a precise legal definition of the term ‘abuse’. Instead, section 19(2) of the GWB provides for five non-exhaustive examples of prohibited abusive behaviour (exclusionary conduct, discriminatory behaviour, exploitative abuse, structural abuse and refusal of access). Section 20 of the GWB extends the prohibition to exclusionary and discriminatory behaviour by enterprises that are dominant only in ‘relative terms’ by enjoying relative market power with respect to small or medium-sized undertakings.

At least in theory, there are no per se abuses of dominance. While all relevant unilateral conduct may - theoretically - be justified, the FCO, as a practical matter, will not generally conduct an in-depth economic effects analysis to establish a prima facie abuse, but only determine whether the conduct at issue may be categorised in broad terms as abusive. It is then up to the companies concerned to provide an objective justification for their conduct, for example, cost efficiencies as justification for rebates.

Abuse of dominance cases have not played a major role in the FCO’s recent practice (the landmark decisions of the BGH date from 1976 - Valium and Vitamin B12). At the time, the BGH held that the largest pharmaceutical wholesalers in Germany were not allowed to refuse to buy and market products from small or medium-sized parallel importers given that those depended on the wholesalers to market their products in Germany. The Higher Regional Court of Frankfurt has found that the common clearing house for the pharmaceutical sector engaged in exclusionary conduct to the detriment of a generics manufacturer by imposing on it the obligation to obtain consent from the manufacturer of the original drug prior to the registration in its data bank, which is essential to market a drug in Germany (OLG Frankfurt, Decision dated 18 May 2010, 11 U 38/09 (Kart)).

De minimis thresholds

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

Not applicable.

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?

Conceptually, market definition is identical throughout the GWB. However, the assessment of whether a firm is dominant may vary depending on whether it is made ex ante in the context of a merger case or ex post in an abuse of dominance case.

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 general dominance test is applicable to pharmaceutical companies. A company will be found dominant if it has significant market shares enabling it to act independently from its competitors, customers and, ultimately, consumers. The mere possession of an IP right is generally not sufficient to establish a dominant position. However, in some circumstances, it may give rise to dominance where it enables an undertaking to prevent effective competition on the market.

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?

Actions relating to an application for the grant or enforcement of a patent or other IP rights are in principle not considered to infringe competition laws even if the holder of the right is in a dominant position. By definition, the holder of the IP right must be allowed to exclude others from the use of the protected right. This includes the right to decide to whom a licence is granted. As such, denying a licence will only amount to abusive behaviour in exceptional circumstances. The BGH has recognised an obligation to grant a licence if access to a downstream market is only possible with the help of a specific right that factually occupies the role of a standard (de facto standard).

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

The FCO has not discussed this question in its published decisions. However, as under EU law, life-cycle management strategies may be considered anticompetitive if they fall outside normal competition on the merits.


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

There are no published cases in which the FCO needed to assess whether communications to the public, HCPs or health authorities could be considered as an abusive behaviour. The FCO will likely apply the European Commission precedents in which it has already been considered that improper communications, in the form of misleading messages conveyed to the public, healthcare professionals or health authorities, may trigger antitrust liability (eg, the AstraZeneca and Roche/Novartis cases).

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?

A patent owner is, in principle, free to market products using patents it owns as well as to grant licences for the marketing of generics prior to the expiry of a patent. The FCO and German courts have yet to decide on possible anticompetitive effects of early entry strategies. However, such strategies may be considered anticompetitive if they have the same effects as a pay-for-delay agreement, in other words, if they incentivise a generic company to give up or delay its entry into the market.

Restrictions on off-label use

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

Actions of patent owners to limit off-label use can be qualified as competition law infringements.


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

The same considerations apply as in the EU. The following pricing strategies may be viewed as anticompetitive if implemented by a dominant undertaking:

  • strategies involving low prices, either in the form of predatory pricing or loyalty rebates; and
  • excessive pricing.
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 same general principles as applied at the EU level are relevant here. For example, it is generally accepted that pharmaceutical companies may implement allocation systems to protect their own legitimate interests, despite the fact that such systems amount to a restriction on parallel trade. Public health or public safety justifications may, however, not always work. For example, as per the Roche/Novartis ECJ judgment, compliance with regulatory obligations relating to pharmacovigilance and safety risks does not justify anticompetitive conduct.