Federal Cartel Office fines pharmacists associations EUR 1.2 million for call to boycott

03 August 2009

Dr Jörg Witting, Fabian von Busse

The Federal Cartel Office has fined the Federal Union of German Associations of Pharmacists (FUGAP), three regional Pharmacists Associations and various natural persons EUR 1.2 million for repeatedly requesting their members to stop purchasing from pharmaceutical wholesaler GEHE. Prior to the request, GEHE’s parent company CELESIO had acquired DocMorris, a possible competitor of local pharmacists, the associations’ members.

At the time of the call to boycott, CELESIO/DocMorris legally operated one pharmacy in the city of Saarbrücken and aimed to establish a pharmacy chain in Germany to compete with local pharmacists. Many local pharmacists feared increased competition if CELESIO/DocMorris was allowed to establish a pharmacy chain in Germany. The Federal Cartel Office found that the pharmacists associations and their representatives had called local pharmacists to boycott purchases from GEHE in speeches and in publications, such as the “Pharmazeutische Zeitung”, a journal published by the FUGAP.

A request for refusal to purchase infringes Section 21 of the German Act against Restraints of Competition if it is expressed with the intention to unfairly harm another undertaking (i.e. without objective justification). The Federal Cartel Office found that this was the case given that GEHE/CELESIO would be harmed. After CELESIO’s acquisition of DocMorris many local pharmacists stopped purchasing from CELESIO’s affiliate wholesaler GEHE. According to the Federal Cartel Office the call was at least one cause of this conduct.

The Federal Cartel Office found two types of anti-competitive conduct: firstly, the statements of the associations’ representatives and, secondly, as far as statements in the “Pharmazeutische Zeitung” were concerned, the disregard of the publisher’s obligatory supervision. The Federal Cartel Office stressed that the scope of freedom of press and freedom of association is exceeded when anti-competitive calls to boycott occur. The FUGAP has filed an objection against the fine.

After the Federal Cartel Office’s last year’s decision against the German Federal Dairy Farmers Association, this is the second decision within eight months addressing a call to boycott. This shows that the Federal Cartel Office takes these cases very seriously even if they – like in the Dairy Farmers Association case – do not lead to a fine. However, even if no fine is imposed, the citation of a company in a Federal Cartel Office’s press release can lead to considerable brand damage and loss of reputation.

Source:

http://www.bundeskartellamt.de