On October 19, 2023, the Commission imposed fines totalling €13.4 million on five pharmaceutical companies (Alkaloids of Australia, Alkaloids Corporation, Boehringer, Linnea, and Transo-Pharm) for their participation in a cartel in relation to an active pharmaceutical ingredient.[1]  This is the Commission’s first-ever cartel decision in the pharmaceutical sector, adding to the Commission’s extensive enforcement action against pharmaceutical companies.

The decision involves the companies listed above and immunity recipient C2 PHARMA, all of which are producers and/or distributors of N-Butylbromide Scopolamine/ Hyoscine (“SNBB”), an input for the production of abdominal antispasmodic drugs.  The Commission found that the six firms exchanged commercially sensitive information and agreed to: (i) fix the minimum sales price of SNBB to distributors and generic drug manufacturers; and (ii) allocate sales quotas.  The Commission found that the conduct constituted a single and continuous infringement, which lasted from November 1, 2005 to September 17, 2019.

The decision was adopted under the Commission’s settlement procedure:[2] all six firms acknowledged their participation in the cartel and ensuing liability, in order to qualify for a 10% fine reduction.  Three of the participants benefitted from further fine reductions under the Commission’s leniency program:[3]  C2 PHARMA received full immunity for revealing the cartel, while Transo-Pharm and Linnea benefitted from fine reductions of 50% and 30% respectively for their cooperation with the Commission.

The Commission had also opened proceedings against a seventh company, Alchem, but this company decided not to participate in the settlement.  The Commission will therefore continue its investigation against Alchem under the standard procedure.  The Commission’s use of such hybrid settlements has repeatedly raised concerns around the presumption of innocence of non-settling parties.[4]  The Commission’s confidence in proceeding with a “staggered” hybrid settlement—meaning that the Commission settles with some parties to an infringement, while continuing to investigate other parties under the standard procedure[5]—will have been bolstered by the Court of Justice’s recent endorsement of this procedure, subject to thoughtful drafting on the part of the Commission so as to protect the rights of non-settling parties.[6]

Editor: Julia Blanco

[1]              Commission Press Release IP/23/5104, “Commission fines pharma companies €13,4 million in antitrust cartel settlement,” October 19, 2023.  

[2]              Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases, OJ 2008 C 167/01.

[3]              Commission Notice on immunity from fines and reduction of fines in cartel cases, OJ 2006 C 298/11.

[4]              This line of case law began with the judgment in Icap v. Commission (Case T-180/15) EU:T:2017:795, which was subsequently confirmed and refined in a series of judgments, including: Pometon SpA v. Commission (Case C-440/19 P) EU:C:2021:214; Scania and Others v. Commission (Case T-799/17) EU:T:2022:48; and HSBC Holdings and Others v. Commission (Case C-883/19) EU:C:2023:11.

[5]              In contrast, “simultaneous” hybrid settlements occur where, as a result of the same investigation, the Commission simultaneously adopts a settlement decision and a standard infringement decision in relation to the same conduct.

[6]              HSBC Holdings and Others v. Commission (Case C-883/19) EU:C:2023:11.  For an analysis of the HSBC Holdings judgment, see our January 2023 EU Competition Law Newsletter, pp. 1–4.