Cinven Capital Management (V) General Partner Ltd & Ors v Competition and Markets Authority [2025] EWCA Civ 578 (08 May 2025)

Cinven Capital Management (V) General Partner Ltd & Ors v Competition and Markets Authority [2025] EWCA Civ 578 (08 May 2025)

The Court held that the CAT did not err in law in upholding the CMA's finding of abuse of dominant position by excessive and unfair pricing of liothyronine tablets, as the Cost Plus methodology, supported by comparables, was a valid and sufficient benchmark for fairness. The alternative pricing benchmarks advanced by the applicants were not dispositive in law and were properly rejected by the CAT. The CAT did not misapply the burden or standard of proof. However, the CAT erred in reducing the penalty for specific deterrence, as it misconstrued the statutory guidelines on penalties.

Citation
[2025] EWCA Civ 578
Parties
Applicant/respondent: Cinven Capital Management (V) General Partner Limited; Applicant/respondent: Cinven (Luxco 1) S.Á. R. L; Applicant/respondent: Cinven Partners LLP; Applicant/respondent: Mercury Pharmaceuticals Limited; Applicant/respondent: Advanz Pharma Services (UK) Limited; Applicant/respondent: Mercury Pharma Group Limited; Applicant/respondent: Advanz Pharma Corp Limited; Respondent/applicant: Competition and Markets Authority
Jurisdiction
England and Wales
Judgment Date
08 May 2025
Procedural Posture
Appeal (competition Law) / Court of Appeal Judgment on Appeal From Competition Appeal Tribunal
Outcome
Appeal by Cinven and Advanz dismissed; CMA's cross-appeal on penalty allowed in part.
Legal Topics
Abuse of Dominant Position, Excessive Pricing, Unfair Pricing, Market Entry Barriers, Penalty Calculation, Cost Plus Methodology, Workable Competition, Legal Certainty
Competition Law Pharmaceutical Regulation Abuse of Dominant Position Excessive Pricing Unfair Pricing Market Entry Barriers Penalty Calculation Cost Plus Methodology +2 more

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Parties

Cinven Capital Management (V) General Partner Limited

Applicant/respondent

Cinven (Luxco 1) S.Á. R. L

Applicant/respondent

Cinven Partners LLP

Applicant/respondent

Mercury Pharmaceuticals Limited

Applicant/respondent

Advanz Pharma Services (UK) Limited

Applicant/respondent

Mercury Pharma Group Limited

Applicant/respondent

Advanz Pharma Corp Limited

Applicant/respondent

Competition and Markets Authority

Respondent/applicant

Procedural Posture

Appeal (competition Law) / Court of Appeal Judgment on Appeal From Competition Appeal Tribunal

Legal Issues

  1. 1 Whether the CAT erred in upholding the CMA's finding of abuse of dominant position by excessive and unfair pricing of liothyronine tablets
  2. 2 Whether alternative pricing benchmarks (workable competition, entry incentivising price, post-entry pricing, multi-firm pricing, portfolio pricing) should have been accepted as dispositive of fairness
  3. 3 Whether the CAT erred in its approach to the burden and standard of proof

Ratio Decidendi

The Court held that the CAT did not err in law in upholding the CMA's finding of abuse of dominant position by excessive and unfair pricing of liothyronine tablets, as the Cost Plus methodology, supported by comparables, was a valid and sufficient benchmark for fairness. The alternative pricing benchmarks advanced by the applicants were not dispositive in law and were properly rejected by the CAT. The CAT did not misapply the burden or standard of proof. However, the CAT erred in reducing the penalty for specific deterrence, as it misconstrued the statutory guidelines on penalties.

Court Disposition

Appeal by Cinven and Advanz dismissed; CMA's cross-appeal on penalty allowed in part.

Orders

  • CAT judgment on liability and abuse upheld; no error in rejection of alternative pricing benchmarks.
  • CAT's reduction of penalty for specific deterrence set aside; penalty recalculated in accordance with statutory guidelines.