Italian Antitrust Authority fines Bayer for abuse of dominance

This article was first publiched in Agropages on July 8th 2011.

On 5 July 2011 the Italian Antitrust Authority has issued its final decision in an investigation against Bayer CropSciences AG (“BCS”) and Bayer Italia SpA (“Bayer Italia”), regarding their refusal to grant a letter of access to fosetyl-al data to generic companies led by Sapec Agro SA (“Sapec”).

By way of background, the generic company Sapec lodged an antitrust complaint further to BCS’s denial to grant a letter of access to two vertebrate studies on fosetyl-al necessary to re-register plant protection products containing it.  Sapec complained in particular that BCS imposed certain pre-conditions before entering into data sharing negotiations with the clear intention to prevent competitors from remaining on the market. Those pre-conditions related in particular to having Sapec’s files checked by an external consultant designated by BCS in order to assess compliance with the "Step 1" requirements under Directive 91/414/EEC (i.e., technical equivalence and completeness of the non-vertebrate animals data). 
 
After more than one year of investigation the Authority concluded, amongst others, that the two studies constituted an “essential facility” as they could not be duplicated pursuant to relevant EU legislation. Accordingly, BCS's behaviour in imposing pre-conditions, delaying negotiations and ultimately refusing to grant a letter of access to those studies constituted an abuse of dominant position contrary to Article 102 TFEU. Furthermore, the Antitrust Authority found that BCS’s behaviour prevented the development of new product formulations, including combinations of fosetyl-al with other molecules (so-called “2-way mixes). On that basis, the Authority concluded that:

a) BCS and Bayer Italia have abused their dominant position (thereby violating Article 102 TFEU) by refusing to give a letter of access to two studies on vertebrate animals (namely, "Marshall" and "Van Dijk");
b) BCS and Bayer Italia must refrain from having a similar behaviour in the future; and
c) Bayer Italia must pay an administrative sanction of 5,124,359 Euro. The reason for applying a fine only to Bayer Italia (and not BCS) is that fosetyl-al sales in 2010 were conducted only by Bayer Italia.

The finding under point b) above is significant as it provides that BCS must refrain from adopting similar behaviour in the future. This will have implications in the context of future data sharing negotiations between generics and data owners. 
 
This decision is an important precedent as it recognizes for the first time that data owners commit an abuse of dominance when imposing certain pre-conditions and refuse to grant a letter of access to third parties during so-called “Step 1” data sharing negotiations following the inclusion of an active substance in Annex I to Directive 91/414/EEC. 
 
BCS has 60 days to appeal this decision before the Italian administrative Court and has already declared that it is exploring all its options.