On 23 October 2023, the Competition College of the Belgian Competition Authority (the BCA) handed down a decision condemning and imposing a fine of EUR 778.777 on one of Belgium’s last three pharmaceutical wholesalers, CERP SA (CERP) for participating in anticompetitive practices in the pharmaceutical distribution sector between April 2003 and November 2016.
This case is particularly interesting because it constitutes the first hybrid cartel proceedings by the BCA. In February 2022, the BCA had already adopted a settlement decision with Pharma Belgium-Belmedis and Febelco, the two other pharmaceutical wholesalers still active in Belgium. In that settlement decision, the BCA imposed a fine of EUR 29.8 million on Pharma Belgium-Belmedis whilst Febelco benefited from full immunity given its role as leniency applicant. CERP was the only company to have opted out of the settlement.
In its decision of 23 October 2023, the Competition College of the BCA examined two allegedly anti-competitive practices:
First, the Competition College of the BCA found that CERP (together with Pharma Belgium-Belmedis and Febelco) had colluded to set the terms and conditions that applied to the so-called ‘Transfer Orders’ service. Whilst in the traditional pharmaceutical distribution model pharmaceutical companies sell their products to pharmaceutical wholesalers, which then in turn sell and deliver those products to local pharmacies, in the Transfer Orders model, however, the wholesalers organise the entire logistics process (delivery, invoicing, etc.) of the sales made directly by pharmaceutical companies to local pharmacies. According to the BCA, by agreeing on a common set of terms and conditions in order to stimulate the use of Transfer Orders by pharmaceutical companies, the pharmaceutical wholesalers violated Article 101 TFEU and Article IV.1 of the Wetboek Economisch Recht (Belgian Code of Economic Law).
Interestingly, whereas in the settlement decision the BCA based the amount of the fine to be paid by Pharma Belgium-Belmedis and Febelco on the turnover generated by their wholesale activities (including the traditional pharmaceutical distribution business), in its decision of 23 October the Competition College accepted a calculation of CERP’s fine based only on the turnover generated by the fees paid by the pharmaceutical companies to CERP for the services offered by the latter as part of the Transfer Order. This turnover constituted a fraction of the turnover generated by its wholesale activities. In addition, CERP also benefited from a 50% fine reduction for its role as second leniency applicant.
Second, the BCA Prosecutor also alleged that the pharmaceutical wholesalers colluded to set common conditions that applied to the pre-sales of influenza vaccines to local pharmacies. However, under Article IV.91 of the Belgian Code of Economic Law, an investigation by the BCA cannot relate to facts that date back more than five years. In the case at hand, however, whilst the investigation of the BCA had begun in 2016, the BCA Prosecutor could not demonstrate that CERP’s participation in the infringement had continued after 2010. The Competition College of the BCA therefore found that this alleged infringement was time-barred with respect to CERP.
Quentin Declève
