Italian Council of State reinstates abuse fine on Bayer Cropscience Srl and Bayer Cropscience AG

Last 29 January 2013, the Italian Council of State published its ruling that quashed the Regional Administrative Court of Lazio’s judgment of 16 May 2012 in the Bayer Cropscience case.  The TAR Lazio annulled the Italian Competition Authority’s decision that fined Bayer Cropscience Srl and Bayer Cropscience AG (together “Bayer”) Euro 5,124 million for abuse of dominant position in the market for the production and commercialization of fosetyl-based fungicides in breach of Article 102 of the Treaty on the Functioning of the European Union (see Newsletter 3/2012 p. 10 and Newsletter 4-5/2011, p. 11 for additional background). As a result the Council of State reinstated the fine imposed on Bayer.

It may be recalled that Bayer’s abuse consisted of the refusal to provide Sapec Agro S.A. (“Sapec”), and other companies grouped under the European Union Fosetyl-Aluminium Task Force (the “Task Force”, i.e. a group of companies formed to share the costs of the fosetyl-based products dossier required to obtain the market authorizations in Italy and in other EU countries) access to certain studies in its possession (“Bayer’s studies”). The Authority considered Bayer’s studies as an essential facility (EU and Italian laws prohibit duplication of studies on vertebrate animals where such studies had already been carried out) to which access was necessary in order to acquire market authorization for fosetyl-based products. Without access to such studies, Sapec and the other companies belonging to the Task Force were forced out of the market insofar as their market authorizations in Italy had expired or been withdrawn.

According to the Council of State, the Italian Competition Authority rightly defined the relevant market (even if a narrow one) and, as a result, was correct in finding that Bayer held a dominant position and that it committed an abuse insofar as it refused to provide access to the Bayer’s studies on vertebrate animals. The Council of State also held that indeed without such studies, competitors could not obtain the market authorization for fosetyl-based products and were forced out of the market. [Gabriele Accardo]

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