The Competition And Markets Authority v Flynn Pharma Ltd & Anor (Rev 3) [2020] EWCA Civ 339 (10 March 2020)

The Competition And Markets Authority v Flynn Pharma Ltd & Anor (Rev 3) [2020] EWCA Civ 339 (10 March 2020)

The Court held that the legal test for excessive and unfair pricing under Article 102 TFEU and Chapter II prohibition is not confined to rigid alternatives; competition authorities must fairly evaluate all relevant evidence, including that adduced by defendant undertakings, and cannot ignore exculpatory evidence. The Tribunal's approach, requiring a structured and fair assessment of evidence and comparators, is consistent with United Brands and subsequent case law. The meaning of 'economic value' is contextual and not a term of art.

Citation
[2020] EWCA Civ 339
Parties
Appellant and Respondent to the Appeal of Flynn: The Competition and Markets Authority; Appellant and Respondent to the Appeal of the CMA: Flynn Pharma Limited; Appellant and Respondent to the Appeal of the CMA: Flynn Pharma (Holdings) Limited; Respondent to the Appeal of the CMA: Pfizer Inc.; Respondent to the Appeal of the CMA: Pfizer Limited; Intervener: The Commission of the European Union
Jurisdiction
England and Wales
Judgment Date
10 March 2020
Procedural Posture
Appeal From Competition Appeal Tribunal / Judgment on Appeal
Outcome
appeal allowed in part; remitted to the Competition and Markets Authority for reconsideration in accordance with the Court's judgment
Legal Topics
Abuse of Dominant Position, Excessive Pricing, Unfair Pricing, Article 102 TFEU, Chapter II Prohibition, Market Definition, Burden of Proof, Economic Value, Cost Plus Analysis
Competition Law Pharmaceutical Regulation EU Law Abuse of Dominant Position Excessive Pricing Unfair Pricing Article 102 TFEU Chapter II Prohibition +4 more

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Parties

The Competition and Markets Authority

Appellant and Respondent to the Appeal of Flynn

Flynn Pharma Limited

Appellant and Respondent to the Appeal of the CMA

Flynn Pharma (Holdings) Limited

Appellant and Respondent to the Appeal of the CMA

Pfizer Inc.

Respondent to the Appeal of the CMA

Pfizer Limited

Respondent to the Appeal of the CMA

The Commission of the European Union

Intervener

Procedural Posture

Appeal From Competition Appeal Tribunal / Judgment on Appeal

Legal Issues

  1. 1 What is the correct legal test for determining excessive and unfair pricing as an abuse of dominance under Article 102 TFEU and Chapter II prohibition?
  2. 2 What is the duty of a competition authority to evaluate evidence adduced by a defendant undertaking?
  3. 3 Are the 'in itself' and 'competing products' tests in United Brands true alternatives or evidential examples?

Ratio Decidendi

The Court held that the legal test for excessive and unfair pricing under Article 102 TFEU and Chapter II prohibition is not confined to rigid alternatives; competition authorities must fairly evaluate all relevant evidence, including that adduced by defendant undertakings, and cannot ignore exculpatory evidence. The Tribunal's approach, requiring a structured and fair assessment of evidence and comparators, is consistent with United Brands and subsequent case law. The meaning of 'economic value' is contextual and not a term of art.

Court Disposition

appeal allowed in part; remitted to the Competition and Markets Authority for reconsideration in accordance with the Court's judgment

Orders

  • The issue of abuse and any consequential matters, including penalties and directions, are remitted to the CMA for reconsideration.
  • The Tribunal's findings on market definition and dominance are upheld.