Clifford Chance
CMA loses in the Court of Appeal in landmark case on unfair pricing (phenytoin)
10 March 2020
On 10 March 2020, the Court of Appeal dismissed the Competition and Markets Authority's ("CMA") appeal against a previous decision of the Competition Appeal Tribunal on unfair pricing in phenytoin.
In June 2018 the Competition Appeal Tribunal set aside the CMA's decision against Pfizer and Flynn in relation to alleged unfair pricing in phenytoin (the £84.2m fine against Pfizer was also set aside). The CMA appealed that decision to the Court of Appeal. The CMA's key ground before the Court of Appeal, that it had an unfettered discretion to choose between analysing whether a product was unfair "in itself" or "compared to competing products" was rejected. The Court found that these were not true alternatives (according to the leading case United Brands) and, importantly, if a defendant raises other methods or types of evidence then the authority must fairly evaluate them. Two further CMA grounds were rejected, in effect, on the basis that the CMA had attempted to appeal factual findings. While the CMA did succeed on one ground, that there was no requirement in every case to create a hypothetical benchmark price, the Court of Appeal upheld the Tribunal's judgment overall. The CMA has decided not to appeal and the matter will now be remitted to the CMA to reconsider the questions of abuse and penalties in light of both judgments.
Clifford Chance acted for Pfizer during the CMA investigation; in its successful appeal to the Tribunal and in its success before the Court of Appeal.
