“The cfi in glaxo collapses the concepts of object and effect. this is contrary to the existing case law and is disastrous for the commission.” discuss.
1038 mots
5 pages
Restriction of competition by object or effect is probably the most important condition to be met for an agreement to infringe Article 81(1) EC. The concept of restriction by object was first introduced in the landmark case Consten and Grundig , where the European Court of Justice (ECJ) held that all agreements limiting parallel trade between Member States were in principle regarded as restrictive of competition by object . Moreover, it was found there is no need to take account of the concrete effects of an agreement once it appears that it has as its object the restriction of competition . The ECJ adopted this view due to the great importance placed on the single market objective of the EC Treaty, despite the fact that trade was actually increased and had it not been for the agreement Grundig would not have been able to penetrate the market at all. This reasoning was followed in almost all subsequent case-law of the European Courts, until the unexpected and controversial decision of the Court of First Instance (CFI) in GlaxoSmithKline v Commission . The case started when Glaxo, under the old system of notification procedure , notified the Commission of its ‘General sales conditions of pharmaceutical specialities to authorised wholesalers’. The contract introduced dual pricing for pharmaceuticals sold in Spain with the aim to prevent parallel exports to the UK where the same products were sold more expensively. Glaxo argued that in order to invest money into the development of new drugs, it needed to retain the profits from the parallel trade, as in the pharmaceuticals industry the real competition is not in price but in innovation.The Commission´s findings – that there was restriction by object and the infringement under Article 81(1) was not eligible for an exemption under Article 81(3) – resulted in Glaxo challenging the decision before the Court of First Instance (CFI).
The CFI found that the agreement was a restriction by effect and ordered the Commission