Synergies in enforcement priorities: Switzerland and Australia

Published On 14/08/2014 | By Smriti Arora | Enforcement, Litigation

Our London colleagues at King & Wood Mallesons SJ Berwin have provided an update on interesting developments in activity by the Swiss antitrust regulator targeting exclusive rebate schemes, which has some parallels with enforcement action in Australia.

The Swiss Competition Commission (Comco) recently fined Schweizerische Depeschenagentur (SDA), a predominant news agency, €1.54 million for its rebate scheme. SDA granted particular media companies with exclusive rebates for its basic services on the condition that they were not to purchase similar services from its competitor, AP Schweiz. Comco found that SDA was dominant in the Swiss news agency market and that its rebates obstructed AP Schweiz (the local Associated Press agency) in the domestic market for news in German. The conduct lasted for over a year, beginning in late 2008 and once AP Schweiz closed its offices in 2010, SDA remained the only supplier of a basic German-language news service in the Swiss market.

Comco’s enforcement action reflects its ongoing concern that companies enter into such vertical arrangements in order to gain territorial protection in the Swiss market and thereby raise prices above the level in neighbouring countries. As SDA settled the case with Comco, by agreeing to abandon these exclusive dealings, apply a transparent rebate system and grant non-discriminatory access to its news services, it received a 10% reduction on its possible fine.

In Australia, as we have previously reported, the ACCC has commenced proceedings against Pfizer Australia Pty Ltd in the Federal Court alleging both misuse of market power and exclusive dealing in the lead up to a patent expiry. The ACCC alleges that:

  • Pfizer offered significant discounts and payments of rebates previously accrued on the sale of Pfizer’s patented cholesterol-lowering drug Lipitor, which were conditional on pharmacies purchasing at least 12 months’ supply of Pfizer’s generic atorvastatin product;
  • these offers were made in early 2012, at a time before Pfizer lost its patent protection and when other suppliers of generic medicines were unable to make competing offers to supply a generic atorvastatin product to pharmacies; and
  • Pfizer engaged in this anti-competitive conduct for the purpose of substantially lessening competition.

The case will be of particular interest to the pharmaceutical industry and is scheduled for hearing from September to October 2014.

Each of these matters serve as a reminder to companies, particularly those with a strong market presence, to consider the potentially anti-competitive effects of rebate schemes.

Photo credit: Kesara Rathnayake / Flickr

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About The Author

is a Solicitor in the Competition team at King & Wood Mallesons, based in the Sydney office. She is an avid tennis fan and hopes to attend each grand slam.

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