The Hellenic Competition Commission (HCC), in plenary, unanimously adopted Decision No 722/2020 and concluded that the Karditsa Pharmaceutical Association (FSK) violated article 1 of law 3959/2011 by adopting practices (other than legal) of determination of the opening hours of the Karditsa pharmacy concerned from November 2011 to December 2013. According to the grounds of the Decision, the HCC imposed on the FSK a fine amounting to two thousand ninety-six euros and eighty-three cents (€ 2,096.83)
Facts
On 14.02.2013 a pharmacy lodged a complaint against (a) the Karditsa Pharmaceutical Association (FSK), for violation of article 1 of law 3959/2011, as in force, and / or article 101 of the TFEU and (b) the Pharmacists Supply Cooperative of Karditsa Perfecture. (SYFAK), for violation of articles 1 and 2 of the above law and / or articles 101 and 102 of the TFEU, in the market of medicines and other pharmaceutical and parapharmaceutical products in the Prefecture of Karditsa.
In the context of the investigation of the above complaint, an on-site inspection (dawn raid) was carried out by the General Directorate of Competition (GDA) on 03.04.2013 at the offices of FSK and SYFAK in the city of Karditsa, while, additional information was requested from SYFAK, FSK and the complainant, respectively. Furthermore, the DGC sent requests for information - questionnaires to twenty eight (28) pharmaceutical wholesalers in Trikala, Thessaloniki, Larissa, Volos, Arta, Agrinio and Athens, all of which are active in the market of distribution of drugs and other pharmaceutical and para-pharmaceutical products, as well as to fourteen (14) retail pharmacies in the Prefecture of Karditsa, non-members of SYFAK.
The complaint and the subsequent DGC’s investigation concerned a concerted practice implemented by FSK against the complainant’s pharmacy in order to deter and prevent it from operating during the extended opening (trading) hours of pharmacies that was applicable at that time. According to the complainant, this practice was implemented through:
- decision-making practices (Board of Directors/General Assembly), in addition to the legal competence of FSK and the imposition of a very high fine by the relevant Disciplinary Board of Pharmacists,
- the change of duty-pharmacy service and, consequently, the extended opening (trading) hours new scheme without good reason and the non-listing of the complainant's pharmacy on the duty-pharmacy service list for a specific period of time, despite the relevant applications for inclusion in the extended opening hours new scheme,
- relevant reports in newspapers and on the internet, TV interviews, and text messaging to the mobile phones of the other FSK members and
- the filing of more than 15 lawsuits against the complainant, as well as several requests for the imposition of sanctions against it by various competent bodies. It also concerned the suspension of the complainant's pharmacy operation during extended opening hours on Tuesdays and Thursdays (from March 2012 to May 2012), due to the imposition of a very high fine by the local Disciplinary Board of Pharmacists.
As a result, the FSK prevented, effectively, in the end, a number of pharmacies of Karditsa from implementing the extended opening hours new scheme at their discretion, during the years 2011, 2012 and 2013.
With regard to SYFAK, the complaint alleged an abuse of a dominant position by refusal to sell drugs during the extended opening hours of the complainant's pharmacy, a time schedule considered unlawful by SYFAK, which was fully in line with FSK.
Relevant Market
Market definition is not a critical element for the establishment or non-establishment of the violation of article 1 of law 3959/2011.
In the present case, the relevant market is defined as the market for the provision of pharmaceutical services in the Prefecture of Karditsa and, in any case, a further definition of the relevant product market may be deemed unnecessary at the discretion of HCC. Regarding the assessment of the case within the scope of article 2 of law 3959/2011 and, in particular, for the determination of a dominant position holding by SYFAK, the relevant market is defined as the wholesale and distribution of pharmaceutical and parapharmaceutical products in the prefectures of Karditsa and Trikala.
Legal assessment
The provision of Article 101 TFEU does not apply to this decision.
Regarding FSK
According to the decision of the HCC, pharmacists, as liberal professionals, exercise an economic activity (distribution of drugs and "para-pharmaceutical" products) in consideration for payment while assuming financial risks associated with it, and this activity is autonomous. Consequently, pharmacists constitute "undertakings" falling within the scope of article 1 par. 1 of law 3959/2011.
FSK is the professional association of pharmacists active in the prefecture of Karditsa. According to the grounds of the decision, the concept of an undertaking under competition law and, therefore, the scope of the competition rules, also cover the associations of undertakings and especially the pharmaceutical associations provided that they serve the financial commercial interests of their members. Therefore, in this case, the FSK constitutes an "association of undertakings", falling within the scope of article 1 par. 1 of law 3959/2011. In adoption its Decision, the HCC examined if, in the exercise of its regulatory competence, the FSK’s management had complied with the public interest criteria set by law and subject to effective state control over the exercise of that competence in order to determine whether the assessed practice actually falls within the scope of the regulatory competence set by law and not within the scope of competition rules.
A professionals association acts as an association of undertakings for the purposes of article 1 of law 3959/2011 when it establishes a regulation that concerns the business (financial) conduct of its members. According to the decision, there is no substantial and systematic state control of the decision-making power at last instance, especially for the decisions of the General Assembly and the Board of Directors of the FSK. FSK Decisions no 121 and no 122 combined and, mainly, Decision no. 122 independently fall within the meaning of a decision of an association of undertakings, in the light of article 1 of law 3959/2011.
In this case, the making of the decisions of the FSK members at issue constitute an anti-competitive practice, which prevented potential competitors of the on-duty pharmacists from operating during the extended opening hours. This decision sought to inactivate the system of optional on-duty hours (extended opening hours) which, during the critical period, had been fully linked to the compulsory duty schedule.
As a means to that end, the modification of the (compulsory) duty hours schedule was used and, in particular, the extension thereof in time to a degree that made it difficult for the interested pharmacists to be included in the extended operating hours new scheme. The 24-hour on-duty period introduced by the decision of FSK led to the physical exhaustion of the pharmacists operating on compulsory duty.
Especially if these pharmacies do not have the necessary staff (a sufficient number of pharmacists per pharmacy), other pharmacists would be discouraged from voluntarily joining the extended opening hours new scheme, as they would have to be on-duty 24 hours a day. In addition, this regulation circumvented the statutory distinction between day and overnight duty operation (–full-time or part-time), and in each case it actually abolishes the legislative purpose of extending the trading hours schedule.
In conclusion, FSK made a decision aiming at influencing the competitive parameters in the relevant market and, therefore, a decision which is by object restrictive and sufficiently capable, due to its nature, to restrict and distort competition, so that there is no need to further assess the occurrence of any actual restrictive effect in the market under consideration.
Regarding SYFAK
Regarding SYFAK, the Decision, in principle, concluded that, considering the particularities and all the relevant circumstances of the present case, assessed as a whole and in combination with each other, SYFAK's dominant position in the relevant and geographical market cannot be substantiated in the present case. In any case, the refusal to supply alleged by the complainant is not considered capable of excluding it from the market in which it operates, i.e., in the next level of the retail market for medicines and other pharmaceutical and parapharmaceutical products in relation to the market level in which SYFAK operates. The complainant was in any case able to cover its supplies, during the usual supply hours (in the morning hours daily) and to maintain a stock of products for use during the extended opening hours. In addition, and mainly, as demonstrated during the hearing, the complainant had easy access to alternative sources of supply and, therefore, no abuse of a dominant position was found.
Fine/Penalties
According to the grounds of the decision, the HCC found that FSK violated article 1 of law 3959/2011 for the period from 26.11.2011 to 18.12.2013 and imposes a fine amounting to two thousand ninety-six euros and eighty-three cents (2,096.83 €), taking into account the statutory maximum level of 10% of the total gross income of the FSK of the financial year in which the violation ended.
HCC also imposes the following conditions on FSK:
- to send the press release that HCC will issue regarding its decision to its members, as well as to the pharmaceutical associations, members of the Panhellenic Pharmaceutical Association, within forty-five (45) days from the issuance of the said press release, submitting to HCC the relevant evidence of dispatch,
- to post the above press release on its website and, in case it does not have its own website, on the website of the Municipality of Karditsa and the Regional Unit of Karditsa, for a period of one (1) year, within twenty (20) days from its issuance.
Finally, the HCC rejected the complaint regarding the part of the complaint that is directed against SYFAK according to article 1 and article 2 of law 3959/2011.