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Belgian Competition Authority fines the Order of Pharmacists

18/06/2019
Belgian Competition Authority fines the Order of Pharmacists
Photo: i viewfinder/Shutterstock.com

On 28 May 2019, the Competition College of the Belgian Competition Authority (“BCA”) imposed a fine of one million euros on the Order of Pharmacists (l’Ordre des pharmaciens – Orde der apothekers) for implementing restrictive practices aimed at hindering the MediCare-Market group’s development on the market for pharmacists’ services, or even expelling it from this market.

Unsuccessful request for interim measures in 2017

The BCA’s decision of 28 May 2019 follows a complaint by MediCare-Market of 2 June 2016 against the Order of Pharmacists as well a request of 28 April 2017 by MediCare-Market to impose interim measures on the Order of Pharmacists.

On 19 June 2017, the BCA found, regarding the request for interim measures, that there were prima facie indications that the Order of Pharmacists may have committed an infringement of the rules of competition by opposing Medicare-Market’s discount policy, its opening hours and the organisation of its pharmacy and parapharmacy activities. The BCA however, ultimately considered that it had not been established that Medicare-Market suffered a serious, imminent and difficult to repair prejudice, or that the general economic interest had been harmed in the sense of the provisions on interim measures, as Medicare-Market had been able to continue its commercial policy. Consequently, the BCA rejected the request for interim measures.

Successful complaint on the merits in 2019

In its decision of 28 May 2019, the BCA made a declaration on the merits of the case. This time, the BCA ruled in favour of MediCare-Market; it held that the Order of Pharmacists had infringed Article IV.1 Code of Economic Law and Article 101 Treaty on the Functioning of the European Union (concerning prohibitions on restrictive agreements) between October 2015 and January 2017 by adopting a strategy and implementing it in order to defend the economic interests of the majority of the Order’s members.

The Order of Pharmacists – which is responsible for developing the Code of Ethics and for safeguarding the non-commercial nature of the pharmacy profession – had opposed the development of the MediCare-Market group, in particular, by referring the matter in October 2015 to all disciplinary councils who were then concerned by the opening of a MediCare-Market brand; and, at the same time, applying for a judicial injunction, by essentially alleging the existence of confusion between the MediCare-Market group's pharmacies and parapharmacies, particularly where they were physically adjacent.

The BCA considered that the Order’s disciplinary and judicial actions were in fact intended to hinder the development of the MediCare-Market group on the market for pharmacists’ services, or even to expel such services from this market. Importantly, the BCA stressed that the legal actions brought by the National Council of the Order were not anti-competitive in themselves, but that they were part of a series of measures aimed at implementing an anti-competitive strategy to oust the MediCare-Market’s model or to prevent its development and that of comparable business models. This overall strategy was based on a series of actions identified in the competition prosecutor's analysis, including the referral to disciplinary councils, the initiation of a judicial injunction, and the public dissemination of threatening information regarding MediCare-Market. The BCA considered that these decisions by the Order restricted competition by object and were not intended to achieve a legitimate objective or, at the very least, were not necessary and proportionate to the achievement of such an objective. The Order thus committed a serious infringement of competition law. 

Fine of one million euros

The BCA used the relevant turnover achieved by Belgian pharmacies throughout Belgium as the basis for calculating the fine in this case. The BCA considered that a fine of one million euros was sufficient to take into account the seriousness of the infringement found and to act as a deterrent, without being excessive. The BCA noted, for the sole purpose of providing perspective here, that this amount corresponded to the average annual turnover achieved by a single pharmacy out of a total of some 5,000 pharmacies.

Contact

Carmen Verdonck

Partner

Beatrijs Gielen

Associate

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