The EU Commission Decision against Servier – a New Dimension to European Pharmaceutical Antitrust?

July 11, 2014

(by Sven Gallasch) On 9 July 2014 the European Commission announced its decision to impose a fine of €427.7 million on French drug maker Servier and five generic companies in relation to so-called ‘pay for delay’ settlements concerning Servier’s bestselling blood pressure drug perindopril. The case differs from the Commission’s earlier decisions against Lundbeck and Johnson & Johnson in a number of rather notable aspects, which will be addressed in this blog post. Read the rest of this entry »

Does Every Little Supermarket Price Guarantee Help?

November 22, 2013

(by Morten Hviid) Last week, Asda’s marketing chief was reported as saying: “It is strange to me that our competitors are touting how much they match prices and are working towards parity. I find it almost anti-competitive that large competitors are talking about and proud to be matching each other’s prices. We are the only ones standing up and saying we’ll be 10 per cent cheaper” (Marketing Week, 15 November).  I have previously pointed out the potential anti-competitive effects of price guarantees, so it is unsurprising that I agree with him on the first point.  I will spell out one overlooked implication of the guarantee offered by Sainsbury’s and partially copied by Tesco below.  However, he is a bit too quick to absolve Asda’s price guarantee from potential anti-competitive blame. Read the rest of this entry »

Chinese Milk Powder Case: How Should We Interpret a Price Cut on the Announcement of an Antitrust Investigation?

July 16, 2013

(by Andreas Stephan) Earlier this month, China’s National Development and Reform Commission (NDRC) announced an investigation into foreign manufacturers of infant milk formula. The very next day, two of the firms in question did something that would be unthinkable in Europe or the US – they announced they would lower their prices and other firms have since followed. Is this the behaviour of remorseful cartelists?  Or is antitrust being used by the Chinese government in the pursuit of non-competition goals?   Read the rest of this entry »

Does the closure of the EU “pay-for-delay” investigations against AstraZeneca and GSK mark the end of pharmaceutical antitrust in Europe?

April 11, 2012

(by Sven Gallasch) Last month the European Commission closed its antitrust investigations into AstraZeneca/Nycomed and GlaxoSmithKline/Synthon BV. These centred on possible anticompetitive agreements to delay generic entry into the market. The investigations had been launched following the European Commission’s Pharmaceutical sector inquiry in 2009. The decision to end the investigations may come as a surprise given comments made at the time by Commissioner Kroes: The inquiry has told us what is wrong with the sector, and now it is time to act. […] We will not hesitate to apply the antitrust rules where such delays result from anticompetitive practices”. So why did the investigation run out of steam? Read the rest of this entry »

Vertical Integration by Software Giants into Manufacturing

February 28, 2012

(by Bruce Lyons)  To business strategists and industrial economists, as well as competition practitioners, it is interesting to reflect on a recent trend in vertical integration.  Google, Microsoft and even Amazon have been positioning in manufacturing, at least in part inspired by the success of Apple’s integrated business model.  Could this eventually lead to vertical silos that ossify each group’s dominance in segments of software and web retailing? Read the rest of this entry »

No Smoke Without Fire? Was the CAT right to quash the OFT decision on the alleged tobacco price fixing conspiracy?

December 16, 2011

(by Bruce Lyons) On 16th April 2010, the OFT imposed a record total fine of £225m on two tobacco companies and ten retailers who they decided had engaged in practices that breached competition law.  The heart of the case was around ‘parity and differential requirements’ (PDR) of the form that, say, Imperial Tobacco requires that the retailer should not price Imperial’s brand A more than 3 pence higher than Gallagher’s brand B.  Rather loosely, I call this ‘price matching’ for ease of exposition but it should be taken to include ‘restoring price differentials’.  Earlier this week, the Competition Appeals Tribunal threw out the case in a decision that will see the OFT repaying the fine and paying huge costs.  Even more importantly, what does it mean for the enforcement of antitrust policy in the UK? Read the rest of this entry »

Supermarket Price Guarantees – and then there were three

October 14, 2011

(by Morten Hviid) Sainsbury’s has now joined its two larger rivals, Tesco and Asda, in offering consumers a price guarantee with an associated possible refund. An interesting aspect of the three guarantees is that they differ on fundamental aspects. Asda promises to beat the rivals by 10% and the guarantee is valid even if Asda has the lower price, so long as this is not 10% below the lowest price rival. Tesco for a short while offered to refund double the difference, though they have now restructured the offer to simply match. Sainsbury’s also promise to match, but their added twist is that rather than the consumer having to do something actively, such as getting onto a website to key in details about their receipt, the refund is printed out at the till when checking out. Sainsbury’s guarantee thus takes the direct hassle out of claiming any refund. The indirect hassle of actually storing and remembering the coupon still remain.  What are the likely effects of the guarantee introduced by Sainsbury’s? Read the rest of this entry »


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