Sun Pharmaceutical Industries Ltd, anciennement Ranbaxy Laboratories Ltd and Ranbaxy (UK) Ltd v European Commission.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:241
• Date: 25 March 2021
• Docket Number: C-586/16
• Celex Number: 62016CJ0586
• Court: Court of Justice (European Union)

JUDGMENT OF THE COURT (Fourth Chamber)

25 March 2021(*)

(Appeal – Competition – Agreements, decisions and concerted practices – Pharmaceutical products – Market for antidepressant medicines (citalopram) – Settlement agreements concerning process patents concluded between a manufacturer of originator medicines holding those patents and manufacturers of generic medicines – Article 101 TFEU – Potential competition – Restriction by object – Characterisation – Calculation of the amount of the fine )

In Case C‑586/16 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 17 November 2016,

Sun Pharmaceutical Industries Ltd, formerly Ranbaxy Laboratories Ltd, established in Vadodara (India),

Ranbaxy (UK) Ltd, established in Hayes (United Kingdom),

represented by R. Vidal, Solicitor, and B. Kennelly QC, and by L. Penny, Solicitor,

appellants,

the other parties to the proceedings being:

European Commission, represented by F. Castilla Contreras, T. Vecchi, B. Mongin and C. Vollrath, acting as Agents, and by B. Rayment and D. Bailey, Barristers, and by G. Peretz QC, and S. Kingston, Senior Counsel,

defendant at first instance,

supported by:

United Kingdom of Great Britain and Northern Ireland, represented initially by D. Guðmundsdóttir, Z. Lavery and D. Robertson, acting as Agents, and by J. Holmes QC, and subsequently by D. Guðmundsdóttir, acting as Agent, and by J. Holmes QC

intervener in the appeal,

THE COURT (Fourth Chamber),

composed of M. Vilaras, President of the Chamber, D. Šváby (Rapporteur), S. Rodin, K. Jürimäe and P.G. Xuereb, Judges,

Advocate General: J. Kokott,

Registrars: M. Aleksejev, Head of Unit and C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 24 January 2019,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 By their appeal, Sun Pharmaceutical Industries Ltd and Ranbaxy (UK) Ltd seek to have set aside the judgment of the General Court of the European Union of 8 September 2016, Sun Pharmaceutical Industries and Ranbaxy (UK) v Commission (T‑460/13, not published, ‘the judgment under appeal’, EU:T:2016:453), by which the General Court dismissed their action which sought, first, annulment in part of Commission Decision C(2013) 3803 final of 19 June 2013 relating to a proceeding under Article [101 TFEU] and Article 53 of the EEA Agreement (Case AT.39226 – Lundbeck) (‘the decision at issue’), and second, reduction of the amount of the fine imposed on them by that decision.

Legal context

Regulation (EC) No 1/2003

2 Article 23(2)(a) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) provides:

‘The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:

(a) they infringe Article [101 or Article 102 TFEU] …’

3 Article 25(3) and (4) of that regulation provides:

‘3. Any action taken by the Commission or by the competition authority of a Member State for the purpose of the investigation or proceedings in respect of an infringement shall interrupt the limitation period for the imposition of fines or periodic penalty payments. The limitation period shall be interrupted with effect from the date on which the action is notified to at least one undertaking or association of undertakings which has participated in the infringement. Actions which interrupt the running of the period shall include in particular the following:

(a) written requests for information by the Commission or by the competition authority of a Member State;

(b) written authorisations to conduct inspections issued to its officials by the Commission or by the competition authority of a Member State;

(c) the initiation of proceedings by the Commission or by the competition authority of a Member State;

(d) notification of the statement of objections of the Commission or of the competition authority of a Member State.

4. The interruption of the limitation period shall apply for all the undertakings or associations of undertakings which have participated in the infringement.’

The 2001 Guidelines on horizontal cooperation agreements

4 Points 25 and 26 of the Guidelines on the applicability of Article [101 TFEU] to horizontal cooperation agreements (OJ 2001 C 3, p. 2; ‘the 2001 Guidelines on horizontal cooperation agreements’) state:

‘Agreements that almost always fall under Article [101](1)

25. Another category of agreements can be assessed from the outset as normally falling under Article [101](1). This concerns cooperation agreements that have the object to restrict competition by means of price fixing, output limitation or sharing of markets or customers. These restrictions are considered to be the most harmful, because they directly interfere with the outcome of the competitive process. Price fixing and output limitation directly lead to customers paying higher prices or not receiving the desired quantities. The sharing of markets or customers reduces the choice available to customers and therefore also leads to higher prices or reduced output. It can therefore be presumed that these restrictions have negative market effects. They are therefore almost always prohibited.

Agreements that may fall under Article [101](1)

26. Agreements that do not belong to the abovementioned categories need further analysis in order to decide whether they fall under Article [101](1). The analysis has to include market-related criteria such as the market position of the parties and other structural factors.’

2006 Guidelines on the method of setting fines

5 Points 6, 13 and 22 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2; ‘the 2006 Guidelines on the method of setting fines’) state:

‘6. ‘The combination of the value of sales to which the infringement relates and of the duration of the infringement is regarded as providing an appropriate proxy to reflect the economic importance of the infringement as well as the relative weight of each undertaking in the infringement. Reference to these factors provides a good indication of the order of magnitude of the fine and should not be regarded as the basis for an automatic and arithmetical calculation method.

…

13. In determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within [the European Economic Area (EEA)]. It will normally take the sales made by the undertaking during the last full business year of its participation in the infringement (hereafter “value of sales”).

…

22. In order to decide whether the proportion of the value of sales to be considered in a given case should be at the lower end or at the higher end of that scale, the Commission will have regard to a number of factors, such as the nature of the infringement, the combined market share of all the undertakings concerned, the geographic scope of the infringement and whether or not the infringement has been implemented.’

The 2014 Guidelines on technology transfer agreements

6 Under the heading ‘Pay-for-restriction in settlement agreements’, points 238 and 239 of the Guidelines on the application of Article 101 [TFEU] to technology transfer agreements (OJ 2014 C 89, p. 3; ‘the 2014 Guidelines on technology transfer agreements’) are worded as follows:

‘238. “Pay-for-restriction” or “pay-for-delay” type settlement agreements often do not involve the transfer of technology rights, but are based on a value transfer from one party in return for a limitation on the entry and/or expansion on the market of the other party and may be caught by Article 101(1).

239. If, however, such a settlement agreement also includes a licensing of the technology rights concerned by the underlying dispute, and that agreement leads to a delayed or otherwise limited ability for the licensee to launch the product on any of the markets concerned, the agreement may be caught by Article 101(1) and would then need to be assessed in particular in the light of Articles 4(1)(c) and 4(1)(d) of [Commission Regulation (EU) No 316/2014 of 21 March 2014 on the application of Article 101(3) [TFEU] to categories of [technology transfer agreements]… If the parties to such a settlement agreement are actual or potential competitors and there was a significant value transfer from the licensor to the licensee, the Commission will be particularly attentive to the risk of market allocation/market sharing.’

Background to the dispute and the decision at issue

7 The present appeal is one of six related appeals against six judgments of the General Court delivered following the actions for annulment brought against the decision at issue, namely, in addition to the present appeal: the appeal in Case C‑588/16 P (Generics (UK) v Commission) against the judgment of 8 September 2016, Generics (UK) v Commission (T‑469/13, not published, EU:T:2016:454); the appeal in Case C‑591/16 P (Lundbeck v Commission) against the judgment of 8 September 2016, Lundbeck v Commission (T‑472/13, EU:T:2016:449); the appeal in Case C‑601/16 P (Arrow Group and Arrow Generics v Commission) against the judgment of 8 September 2016, Arrow Group and Arrow Generics v Commission (T‑467/13, not published, EU:T:2016:450); the appeal in Case C‑611/16 P (Xellia Pharmaceuticals and Alpharma v Commission) against the judgment of 8 September 2016, Xellia Pharmaceuticals and Alpharma v Commission (T‑471/13, not published, EU:T:2016:460), and the appeal in Case C‑614/16 P (Merck v Commission) against the judgment of 8 September 2016, Merck v Commission (T‑470/13, not published, EU:T:2016:452).

8 The background to...