The Spanish Competition Authority ("CNMC") has fined Advanced Accelerator Applications Ibérica, S.L.U. ("AAA") and Curium Pharma Spain, S.A. ("CURIUM") as well as two directors of those companies for an infringement of the Spanish Competition Act ("SCA"), constituting a bid-rigging cartel for the supply of radiopharmaceutical fluorodeoxyglucose ("18-FDG").
What you need to know - key takeaways
- This case shows once again the interest of the CNMC in addressing collusion in public tenders.
- The CNMC has used its power to ban the infringing companies from participating in public tenders, again leaving the State Public Procurement Advisory Board to determine the scope and duration of the ban.
- The CNMC has also fined directors of the companies involved.
- The conduct was detected by the CNMC thanks to its new economic intelligence unit, which investigated public tenders submitted for the supply of radiopharmaceuticals to hospitals and healthcare centres in Spain.
The CNMC has once again shown its focus in addressing collusion in public tenders by fining the two main companies active on the 18-FDG market in Spain, AAA and CURIUM. The fines amount to EUR 5.76 million and the CNMC has also decided that the companies' respective parent companies (Novartis Groupe France, S.A. and Glo Holdco, S.C.A) were jointly and severally liable for the infringement. Lastly, the CNMC has banned both companies from participating in public tenders and the State Public Procurement Advisory Board will be responsible for determining the scope and duration of the ban.
The conduct consisted of an agreement to deliberately lose bids to supply radiopharmaceuticals to hospitals, as a part of a geographic market sharing agreement, under which the companies had assigned specific hospitals to each other. Thus, hospitals ended up paying higher prices for radiopharmaceuticals than they would have done under competitive conditions. Subsequently, the companies subcontracted services to each other at prices significantly lower than those charged to the hospitals. Furthermore, the companies maintained a non-competition pact in respect of a number of customers. This was implemented through 'self-exclusions' from tenders (e.g., by failing to attend negotiations, or by making deliberate errors in tender submissions, or submitting bids in excess of the maximum price specified in the tender documents).
The CNMC found that the agreements were implemented from at least from June 2014 until November 2018, when the CNMC inspected the headquarters of both companies.
This case shows once again the interest of the CNMC in addressing collusion in public tenders (see for example here and here), as well as the increasing relevance of the economic intelligence unit of the CNMC, which detected the conduct by investigating public tenders submitted for the supply of radiopharmaceuticals to hospitals and healthcare centres in Spain. Furthermore, this case also evidences some divergence amongst regional and national competition authorities in the use of new legal tools to deter anticompetitive conduct, such as the power to ban companies from participating in public tenders. The CNMC remains of the view that the scope of such public bans must be determined by the State Public Procurement Advisory Board, whereas the Spanish regional competition authorities, such as the Catalan Competition Authority, consider that Spanish Competition authorities can determinine the scope and duration of such bans (see, for example, our previous article).
With thanks to Ana Soria of Ashurst for her contribution.
