Our team in Italy obtained a rare closing of an investigation by the Italian Competition Authority involving two multinational pharmaceutical companies specializing in plasma-derived medicines.
The ICA launched its investigation in January 2018, amid complaints that the joint participation of our client Kedrion and its competitor Grifols, through a temporary consortium, in a large tender launched by a regional central purchasing body for the award of the services of collection of blood offered by Italian donors, manufacturing of plasma-derived products and their supply to the national healthcare system, would amount to an anticompetitive arrangement in violation of Art. 101 TFEU. According to these allegations, as it brought together two companies that were formally in possession of the requirements to take part to the tender individually, the temporary consortium would have been set up to avoid competition between the two firms on the economic portion of the offer, thereby allowing them to win the tender at a higher price than those they would have been able to offer in case of individual bids.
Based on the defense developed by the Orrick team, the ICA found that there were no grounds to confirm the initial allegations and theory of harm and therefore decided to close the investigation against the two companies without any finding of infringement of competition rules and thus without the imposition of any fine. In particular, the ICA acknowledged that, while both companies would have been able to individually participate to the tender, one of them would not have had any realistic chance of winning it on its own and could thus not exercise any meaningful competitive pressure within the tender procedure.
This is one of those very rare cases in which, after opening a formal investigation, the ICA is convinced by the merits of the defense of the companies under scrutiny and thus concludes that there are no longer grounds for action. The case also establishes a new important principle with respect to the antitrust assessment of competing firms' joint participation to tender procedures: the mere fact that each firm individually possesses the formal requirements to participate in the tender is no longer sufficient to qualify the joint participation as unnecessary and thus restrictive of competition; to this end one also needs to analyze whether each of the companies at issue represents an effective competitive constraint within the tender.Kedrion was successfully defended through the yearlong investigation by an Orrick team led by Pietro Merlino, supported by Marianna Meriani.