Undertaking in dominant position cannot refuse ordinary orders to prevent parallel exports

Brussels, 16/09/2008 (Agence Europe) - In a ruling on Tuesday 16 September 2008, the Court of Justice states that the pharmaceutical company, GlaxoSmithKline AEVE, may have abused its dominant position by refusing to answer orders, but only if such orders were “ordinary orders”.

Several pharmaceutical wholesalers had taken the matter before the Greek commission on competition (Epitropi Antagonismou) against GSK AEVE, the Greek subsidiary of GlaxoSmithKline (UK), for having refused certain orders between November 2000 and February 2001. These wholesalers supply the national market and other member states, thus benefitting from the relatively low price of medicines in Greece. Evoking the shortage of the medicines in question, GSL amended its distribution system during this period, itself taking on a part of the distribution of the products in Greece and refusing to supply wholesalers. When questioned at the Court of Appeal in Athens, the European Court replied that the refusal to supply may constitute abuse of dominant position, especially if it is in the avowed aim of preventing parallel exports. It adds that these parallel exports allow the consumer to enjoy prices lower than in another member state. The Court considers that it is up to the State to take compensatory measures in the event of shortage and not up to a company, still less if that company is in a dominant position on the market. Finally, it points out that none of this should be applied unless the orders refused are to be considered “ordinary orders”. It refers this analysis back to the Greek court, specifying that it is up to the national court to ascertain whether the orders are ordinary in the light of both the size of those orders in relation to the requirements of the market in the first member state and the previous business relations between that undertaking and the wholesalers concerned. It would therefore appear that the Greek court may rule out from its analysis the orders for products intended for immediate exportation or parallel exports (Cases C-468/06 to C-478/06). (C.D./transl.jl)