CAT final judgment in paroxetine appeals

18/05/21

On 10 May 2021, the Competition Appeal Tribunal (CAT) delivered a final  judgment in the appeals against a decision of the Competition and Markets Authority (CMA) that found that GlaxoSmithKline (GSK), Alpharma Limited and Generics (UK) Limited (GUK) had breached EU and UK competition law by entering into a series of agreements to settle patent disputes that delayed generic entry of the drug paroxetine.
 
This judgment follows a preliminary ruling of the Court of Justice on questions referred by the CAT in relation to the existence of potential competition from manufacturers of generic medicines who had not yet entered the market, whether the settlement agreements restricted competition by object and/or by effect, and whether the settlement agreements can constitute an abuse of dominance.
 
On the basis of the CAT's findings of fact in an earlier judgment and the guidance provided by the Court of Justice, the CAT has dismissed all outstanding grounds in each of the appeals against liability. In particular, the CAT has concluded that (1) GUK and Alpharma were potential competitors of GSK at the time that they entered into the settlement agreement; (2) the  settlement agreements were restrictive of competition by object or by effect and (3) GSK had abused its dominant position in relation to the supply of paroxetine, having upheld the CMA’s definition of the relevant market on a different basis from the CMA’s decision.
 
The CAT held that the CMA had been entitled to impose fines as the parties ought to  have been aware of the anti-competitive nature of the agreements. The CAT also held, however, that the CMA should not have imposed a fine for abuse of dominance, given the novelty of the case.
 
Finally, the CAT reduced the fines imposed: from £37,606,275 to £22,200,602 for GSK, from  £5,841,286 to £3,894,191 for Merck/GUK and from £1,542,860 to £1,028,574  for Alpharma; in order to reflect the novelty of the case and the lapse of time between the infringements and the start of the investigation. 

The judgment is here.