III. Competition

Abstract

The period under consideration (mid-1995 to March 1998) was a relatively quiet one for Article 85. Note should be taken of the publication in 1997 of the Commission's Green Paper on vertical restraints in competition policy,1 which is likely to lead to a significant overhaul of a number of block exemption regulations. The existing block exemptions on patent licensing and know-how agreements2 were merged into a new single block exemption on technology transfer.3 Perhaps the most interesting and potentially far-reaching development was the Commission decision in Bayer/Adalat,4 in which the Commission characterised as agreements—and so falling within Article 85—attempts by the German chemicals group Bayer to limit supplies of a range of pharmaceutical products from its wholly owned distributors in other member States to wholesalers there in order to stem parallel exports. This was not an Article 86 case (Bayer was not dominant in the relevant product market), of which refusal to sell is more commonly a feature, and an agreement between manufacturer and distributor/wholesaler which prohibits re-export of the contract goods has long been recognised as falling within Article 85(1). But in Bayer/Adalat the wholesalers never agreed to the (alleged) export ban, and in fact resisted Bayer's attempts to limit supplies both directly and by subterfuge. Nevertheless, the Commission found an agreement between the Bayer distributors and the wholesalers, effectively simply in continuing to deal, the former having committed “an infringement of Article 85(1) by imposing an export ban as part of their continuous commercial relations with [the latter]”,5 the ban having “been agreed [sic] as part of their ongoing business relations”.6