2002/165/EC: Commission Decision of 3 July 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (Case COMP D3/38.044 — NDC Health/IMS Health: Interim measures) (notified under document number C(2001) 1695) (Text with EEA relevance.)

• Published date: 28 February 2002
• Date of Signature: 06 December 2002
• Subject Matter: posizione dominante,concorrenza,posición dominante,competencia,position dominante,concurrence,Libertad de establecimiento,relaciones exteriores,Acuerdo de Asociación
• Official Gazette Publication: Gazzetta ufficiale delle Comunità europee, L 59, 28 febbraio 2002,Diario Oficial de las Comunidades Europeas, L 59, 28 de febrero de 2002,Journal officiel des Communautés européennes, L 59, 28 février 2002,Diario Oficial de la Unión Europea, L 38, 13 de febrero de 2003

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2002/165/EC: Commission Decision of 3 July 2001 relating to a proceeding pursuant to Article 82 of the EC Treaty (Case COMP D3/38.044 — NDC Health/IMS Health: Interim measures) (notified under document number C(2001) 1695) (Text with EEA relevance.)

Official Journal L 059 , 28/02/2002 P. 0018 - 0049

Commission Decision

of 3 July 2001

relating to a proceeding pursuant to Article 82 of the EC Treaty

(Case COMP D3/38.044 - NDC Health/IMS Health: Interim measures)

(notified under document number C(2001) 1695)

(Only the English text is authentic)

(Text with EEA relevance)

(2001/165/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation No 17 of 6 February 1962, first Regulation implementing Articles 85 and 86 of the Treaty(1), as last amended by Regulation (EC) No 1216/1999(2), and in particular Articles 3 and 16 thereof,

Having regard to the Commission Decision of 8 March 2001 to initiate proceedings in this case,

Having given the firm concerned the opportunity to make known its views on the objections raised by the Commission in accordance with Article 19 of Regulation No 1 and Article 2 of Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of the parties in certain proceedings under Articles 85 and 86 of the EC Treaty(3),

Having given the Advisory Committee on Restrictive Practices and Dominant Positions the opportunity to deliver an opinion on 19 June 2001,

Whereas:

I. THE FACTS

1. THE NATURE OF THE PRESENT DECISION

(1) This Decision provides for interim measures pending a final decision on the application made under Article 3 of Regulation No 17 by National Data Corporation Health Information Services (NDC) of Atlanta, United States of America, alleging that an infringement of Article 82 of the EC Treaty had been committed by IMS Health Incorporated (IMS) of Westport, United States of America.

2. THE UNDERTAKINGS

(2) The companies referred to below are all involved in tracking sales in the pharmaceutical industry and in the healthcare products sector. They supply pharmaceutical firms with data on the sales performance of pharmaceutical products recorded by pharmacies and on doctors' prescriptions.

IMS

(3) Intercontinental Marketing Services Health Inc. (IMS), a US company, is the world's number one supplier of information to the pharmaceutical and healthcare industry. IMS Health describes itself as "the world's leading provider of information solutions to the pharmaceutical and healthcare industries".

IMS is active in 100 countries. IMS' turnover was USD 1,4 billion in 2000 with an increase of 1,9 % compared to 1999. The healthcare activity revenue increased 9,1 % to USD 1,1 billion in 2000 from USD 1 billion in 1999. Operating income for this activity was higher by 3,7 % in 2000, USD 344315.

IMS' European headquarters are located in London. IMS' German subsidiary is IMS GmbH & Co. OHG located in Frankfurt am Main.

NDC

(4) National Data Corporation Health Information Services (NDC), also a US company, supplies database services mainly in the United States, specialising in the pharmaceutical sector. Like IMS, NDC also offers an information service in various countries aimed at the pharmaceutical and healthcare sector. In 1998, NDC entered the EU market via two acquisitions in the UK, specifically having acquired Hadley Hutt and John Richardson Computers. In June 2000 NDC concluded an agreement for the purchase of PI Pharmaintranet ("PI"), thereby giving NDC an operational platform in the German market under the name of NDC Health GmbH. PI was established by a former IMS employee, Mr Roland Lederer in February 1999. Following an internal restructuring in January 2001, National Data Corporation's health and banking services have been separated into NDC Health and Global Payment Systems. NDC Health had a worldwide turnover of USD 289,3 million in 2000.

3. THE COMPLAINT AND APPLICATION FOR INTERIM MEASURES

(5) NDC lodged a complaint on 19 December 2000 requesting the Commission to:

- initiate a procedure to establish the existence of an infringement of Article 82, and

- grant interim measures.

(6) NDC considers that IMS is abusing its dominant position by refusing to grant it a licence to use the "1860 brick structure", a segmentation of Germany into 1860 geographical areas, used to report sales information. Without this licence NDC claims it cannot provide regional sales reports based on this structure for Germany (hereinafter "regional sales data services"), the largest pharmaceutical market of the EU, and is also prevented from making contracts for multi-jurisdictional coverage because it would be unable to provide German reports. Furthermore, NDC claims that the German Court has strengthened IMS' dominant position through its interim judgements which prohibited PI from using the 1860, 2847 or 3000 brick structures or any other brick structure derived from the 1860 brick structure on the basis that they constitute a personal intellectual creation belonging to IMS. For violation of this order NDC may be fined a maximum of DEM 500000 and that IMS' procedure represents vexatious litigation. The latter two points are not related to this Decision and will not be examined further.

(7) The interim measures requested by NDC are an order compelling IMS to grant NDC a licence to the 1860 structure and all of its derivatives, upon non-discriminatory, commercially reasonable terms, with such licence to be extinguished (and royalties to be reimbursed to NDC) as and when NDC is able to prove that IMS does not own a copyright in any of said structures.

4. THE INVESTIGATION

(8) The complaint was sent to IMS on 20 December 2000. Two requests for information under Article 11 of Regulation 17 were sent to IMS on 20 December 2000 and 19 January 2001. IMS commented on the complaint in its letter of 12 January 2001 and replied to the requests for information by letters of 15 and 26 January and 7 March.

(9) Requests for information to pharmaceutical companies under Article 11 were initially made to a sample of 20 firms, amongst whom were 17 of the 20 largest pharmaceutical companies in Germany and nine members of the Working Group (see recital 76 et seq.). Meetings took place with eight pharmaceutical companies. Further requests pursuant to Article 11 were made to other information providers such as NDC, AzyX, Cégédim and Suomen LääkeData Oy (SLD).

(10) On 9 March 2001 the Commission sent a statement of objections to IMS Health. IMS replied by letter dated 2 April 2001 and requested an oral hearing, which took place on 6 April 2001. The Commission sent a further request for information on 3 May to which IMS replied on 14 May. IMS also provided the Commission with four supplementary memoranda dated 18 April, 15 May, 16 May and 5 June. In its written response dated 2 April 2001, during the oral hearing and in subsequent submissions, IMS commented on the statement of objections and put forward a number of counter-arguments, which are responded to in the appropriate section of the legal assessment.

(11) In order to clarify further certain assertions raised by IMS in its written and oral replies to the statement of objections, requests for information were sent to the original 20 companies and to a further 90 pharmaceutical companies (110 in total). 85 replied, of which 11 did not buy regional sales reports. Further contacts also took place with information providers such as NDC, AzyX, Cégédim, Farmastat, SLD and GESDAT, the data-marketing facility of three German wholesalers. This new information was communicated to IMS on 22 May and 7 June 2001 for their comments. IMS responded by letter of 14 June. A meeting took place between IMS and the Commission services on 18 June 2001.

5. THE FACTS

5.1. REGIONAL DATA SERVICES

(12) Pharmaceutical companies use regional data services to build their sales territories, to develop and implement incentive schemes for their sales representatives and to gain knowledge of market developments (market shares of their products, comparison with previous time periods, etc.).

(13) Regional sales reports are based on data delivered by pharmaceutical wholesalers to report providers, such as IMS, NDC and AzyX(4). These data represent the purchases of the individual pharmacies from the wholesalers(5). It is assumed that these purchases are a good proxy(6) for pharmacy sales and therefore for doctors' prescriptions. Wholesalers commonly have data-supply agreements with providers of regional sales reports, whereby wholesalers provide data on sales to an aggregation of pharmacies within geographic segments to the report providers. Providers of regional sales reports require from wholesalers the data broken down in a predefined structure (the input structure). IMS licenses this structure to the wholesalers only for the reporting of their data and not for other uses. This input structure differs between providers: IMS' structure has 2847 segments, NDC's originally had 3000, though this was replaced by a 3942 (formerly 3944) segment structure, and the AzyX structure has 2881 segments.

(14) This input segmentation structure is a grid superimposed on a country map, grouping communities of doctors, pharmacies and patients and contains among others the following data: postcodes of the German post office, information of the Federal Statistical Office (political boundaries, number of residents), distribution of physicians and pharmacies, mapping materials (topographic and street maps) and information about the regional organisation of the physicians' billing associations. The purpose of the segmentation is to allow reporting of sales data broken down into a small, useful geographic area, called a "brick", while avoiding the identification of sales to individual pharmacies. The latter is necessary for data privacy...