In Belgium’s first hybrid cartel case Van Bael & Bellis assists CERP in obtaining a significantly more favourable outcome than that offered to the settling parties

• 27/10/2023
• News

In Belgium’s first hybrid cartel case, involving both settling and non-settling parties, Van Bael & Bellis assisted CERP, one of the three pharmaceutical wholesalers on the Belgian market, in obtaining a significantly more favourable outcome than that offered to the settling parties in the settlement procedure that ended in February 2022 with the imposition of a relatively high fine on one of the settling wholesalers (see press release).

CERP, along with the two other Belgian pharmaceutical wholesalers, was alleged to have infringed Belgian and EU competition law in connection with an agreement for the distribution of pharmaceutical products via “transfer orders” (TO), involving the wholesalers providing a supporting delivery and invoicing service for direct sales by pharmaceutical companies to pharmacies. A separate infringement was alleged in relation to the annual pre-sales of flu vaccines.

In 2021, the Belgian Competition Authority (BCA)’s Prosecutor General initiated a settlement proceeding in which all the Belgian pharmaceutical wholesalers participated. CERP withdrew from those proceedings in view of the Prosecutor’s insistence on computing the fine for the alleged TO infringement by reference to the direct sales of products negotiated directly between the pharmaceutical companies and the pharmacists which the wholesalers merely invoiced to the pharmacists. CERP considered that this methodology was manifestly wrong as those sales could not reasonably be imputed to wholesalers who were not in any way involved in the negotiation of the underlying transaction. The only sales connected with the alleged TO infringement were those of the transfer order services provided by the wholesalers to the pharmaceutical companies.

Following CERP’s withdrawal from the settlement procedure, the Belgian Prosecutor initiated a “standard’ infringement procedure against CERP in which he called for a fine of EUR 18,439,828 to be imposed on CERP for both infringements, of which EUR 17,727,222 was attributable to the TO infringement.

In its decision of 23 October, the Belgian Competition College dismissed the case against CERP in relation to the flu vaccine agreement on the ground that it was time-barred and accepted CERP’s argument about the methodology to be applied the calculation of the fine for the TO infringement. As a result, the fine imposed on CERP for the TO infringement was EUR 778,000, that is, less than 5 % of the fine claimed by the Prosecutor.

The case reveals fundamentally different methodologies for the calculation of fines being applied by the Competition College in the standard procedure and by the Prosecutor General in the settlement procedure. On the basis of the methodology which the College found to be incorrect in the standard procedure, a second wholesaler, Pharma Belgium-Belmedis, which had remained in the settlement procedure, received a fine of EUR 29.8 million (the third wholesaler was the immunity applicant and therefore escaped any fine).  In Belgium, settlement decisions are issued by the Prosecutor General without any supervision or involvement by the Competition College and without any possibility of appeal.

Van Bael & Bellis was represented by partner Jean-François Bellis assisted by Valérie Lefever and Quentin Declève.