ACCC still has Pfizer in its sights

The ACCC is seeking special leave to appeal the dismissal of its allegations against Pfizer Australia

The Australian Competition and Consumer Commission is seeking leave from the High Court to appeal the Full Federal Court’s judgement of 25 May 2018, which upheld the dismissal of its allegations against Pfizer by the trial judge.

The ACCC alleges that Pfizer misused its “substantial” market power and engaged in exclusive dealing conduct for an anti-competitive purpose in breach of the Competition and Consumer Act 2010.

Section 46 of this act was amended by Parliament effective 6 November 2017, but the ACCC had taken action against Pfizer using the pre-amendment section 46, which it says was contravened when a business with substantial market power took advantage of that power for a specified anti-competitive purpose.

The ACCC maintains that the issue raised in the appeal, relating to a proscribed anti-competitive purpose remains relevant after the amendments to section 46.

In early 2012, Pfizer offered significant discounts and the release of rebates accrued on previous sales of Lipitor to pharmacies. Pfizer’s offer was conditional upon pharmacies acquiring a minimum volume of Pfizer’s generic atorvastatin and agreeing to restrict their re-supply of competing genetic atorvastatin products.

The ACCC first instituted proceedings against Pfizer in February 2014, alleging that the company misused its position as a patent holder of atorvastatin to prevent or deter competition from other suppliers selling generic atorvastatin products to pharmacies.

The ACCC also alleged Pfizer’s conduct was exclusive dealing with the purpose of substantially lessening competition in the market for atorvastatin.

Now, “the ACCC is seeking clarity from the High Court on how to assess anti-competitive purpose, an important issue raised by this case,” ACCC Commissioner Sarah Court said.

The Full Court had found that Pfizer took advantage of its substantial market power.

However, the Full Court did not accept the ACCC’s argument that Pfizer had engaged in conduct for the proscribed purpose of deterring or preventing competitors from engaging in competitive conduct or for the purpose of substantially lessening competition.

“This case raises important issues about when a company with substantial market power can be found to have acted with a proscribed anti-competitive purpose,” Ms Court said.

The ACCC is also seeking special leave on the issue of when a “requirements contract” will amount to exclusive dealing for the purposes of section 47 of the CCA.

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