On March 30, 2021, the Italian Competition Authority (the “ICA”) closed an investigation against three equipment manufacturers in the market for maintenance of high-tech diagnostic imaging devices, without finding any abuse of dominant position. The ICA found that the evidence collected during the investigation did not allow to confirm the allegations put forward at the beginning of the investigation.
On January 31, 2018, the ICA initiated proceedings for an alleged abuse of dominant position against GE Medical Systems Italia S.p.A. and its parent companies GE Healthcare Italia S.r.l. and GE Italia Holding S.r.l. (“GE”), Siemens Healthcare S.r.l. and its parent company Siemens Healthineers Holding III B.V. (“Siemens”), and Philips S.p.A. and its parent companies Philips SAECO S.p.A. and Koninklijke Philips N.V. (“Philips”, and together with GE and Siemens, the “Parties”).
The proceedings were initiated following a complaint by Althea Group S.p.A. (formerly Pantheon Healthcare Group), a company active in the provision of integrated medical device management and maintenance services. In the decision to start the proceedings, the ICA alleged that the three main original equipment manufacturers (“OEMs”) of high-end diagnostic imaging devices (e.g., computed tomography and magnetic resonance devices; “DI Devices”), namely Philips, GE, and Siemens, could have implemented, each with respect to their own brand devices, exclusionary strategies aimed at hindering the provision of maintenance services by parties other than the manufacturers (Independent Service Providers, “ISOs”). The contested practices consisted, among other things, in the refusal to provide access to service software and information, and the refusal to supply spare parts.
In September 2020, the Parties received the Statement of Objection (“SO”), which confirmed the concerns expressed in the decision to open proceedings.
The ICA identified a primary market for the production and commercialization of DI Devices, on the basis of a number of characteristics deemed to be common to all DI Devices (e.g., technological complexity capable of delivering sophisticated diagnoses, high prices, significant installation and replacement costs which cannot be recovered, etc.).
As for the secondary market for DI Devices maintenance services, the ICA defined three distinct markets, each one related to the OEMs’ respective brand (“branded” aftermarkets). According to the ICA, the high complexity of the DI Devices and the lack of standardisation in production technologies had prevented the development of “standard” maintenance services that could be equally used on DI Devices of different brands.
No interdependence between primary market and aftermarkets
The Parties argued for the existence of a “systems market” comprising the primary market for the production and commercialization of DI Devices and the secondary markets for maintenance services. In the Parties’ view, the primary and secondary markets were interrelated, since, inter alia, healthcare providers in the primary market, often faced with severe budgetary constraints, were well aware of the substantial expected costs of maintenance services and, thus, of the overall lifecycle costs, and took them into account when purchasing the devices.
However, the ICA held that DI Devices maintenance services were not part of a single “systems market”, since they are mainly purchased much later than the device itself. Therefore, it would be impossible for a healthcare facility to correctly estimate the amount of maintenance costs for the entire lifecycle of the DI Device.
The ICA found that the primary market for the production and commercialization of DI Devices was highly concentrated, with stable market shares over time. Furthermore, each OEM – with a market share of over 90% in the sale of branded maintenance services – was dominant in its branded aftermarket.
In the assessment of the OEMs’ dominant position, the ICA emphasized the lack of interdependence between decisions to purchase DI Devices and maintenance over their entire lifecycle, as well as the fact that healthcare facilities were likely to be locked-in, as they could not react promptly to a possible exploitation of downstream market power by the dominant OEM by replacing the upstream DI Device with another.
The lack of sufficient evidence
In the analysis of the contested conduct, the ICA concluded that the evidence collected during the proceedings was insufficient to demonstrate an abuse of dominance under Article 102 TFEU.
First, the ICA excluded the existence of an abusive conduct consisting in the refusal to grant access to the maintenance software of the so-called “minimum set” and the supply of spare parts.
Second, the ICA held that the OEMs’ policy of reserving access to the maintenance software of the so-called advanced set (software and service manuals) to their technicians and business partners was compatible with antitrust rules, as the “advanced set” software was covered by intellectual property (“IP”) and, in any case, was not indispensable for third parties to carry out maintenance activities on the OEM’s DI Devices.
The ICA reasoned that, where a conflict between the protection of IP rights and the safeguard of competition arises, the latter can only prevail when it is proven that the good or service protected by an exclusive right is not in any way replicable by potential competitors because of objective reasons related to technical, legal or economic obstacles. If this was not the case, in the ICA’s view, there would be no incentive to develop alternatives based on innovation, but merely “competition by imitation” without investments in R&D.
In addition, the OEMs’ refusal to license the “advanced set” software and information did not constitute an abuse of dominant position, as the refusal was connected with the exercise of an exclusive right, in a sector in which investments are essential for technological innovation. The ICA reasoned that, in light of established EU case-law on refusal to supply, the OEMs’ refusal to license the “advanced set” software and information was justified by the need to promote development and innovation in disease prevention and medical treatment. The ICA concluded that the protection of health is guaranteed through the protection of the incentive to invest, which is necessary for the development of advanced software and, therefore, through the protection of intellectual property rights, thus fostering competition based on innovation, rather than competition by imitation.
 ICA, Decision of March 30, 2021, No. 28620, Case A517 – Mercati di manutenzione di dispositivi diagnostici.
 On August 8, 2018, the ICA decided to extend the proceedings also against General Electric Co., GE Medical System S.C.S., Siemens AG and Philips Medical System Nederland B.V.
 It is noteworthy that the SO’s conclusions on market definition contrast with past EU and national decisional practice, which have defined the primary markets as those for the production and commercialization of each DI Device. Commission Decision of January 21, 2004, Case COMP/M.3304, GE/Amersham; Commission Decision of March 2, 2001, Case COMP/M.2256, Philips/Agilent Health Care Solutions; Commission Decision of October 17, 2001, Case COMP/M.2537, Philips/Marconi Medical Systems; and Commission Decision of September 2, 2003, Case COMP/M.3083, GE/Instrumentarium.