Is disparaging a competitor considered a violation of competition?

Cihan Bilaçlı

Disparaging a competitor's product or service is often considered unfair trade rules. However, the decisions taken by the French and Danish competition authorities stating that disparaging a competitor could result in abusing a dominant position seem to have influenced the Commission. In a notice published last week, commitments made by a pharmaceutical manufacturer to address abusive behavior were accepted by the Commission¹.

It is mentioned that Vifor, which emphasizes that it may be dominant in the intravenous iron deficiency treatment market, may have restricted competition for many years by spreading misleading information about the reliability of an iron deficiency drug, Monofer, marketed by Pharmacosmos, the closest competitor of Vifor. The commitments presented below by Vifor for implementation for a period of 10 years have been deemed sufficient to resolve the problems:

a. A comprehensive and multi-channel communication campaign will be launched by Vifor to correct and eliminate the effects of previously disseminated misleading information about Monofer's reliability.

b. No written or oral external promotional and medical communication will be made about the reliability of Monofer using information that is not based on Monofer's Product Characteristics Summary or not obtained from controlled one-on-one studies.

c. To ensure compliance, a number of measures and assurance systems will be implemented, including all relevant external promotional and medical communications, as well as annual internal training of personnel and a compliance certification system.

Practice in Türkiye

It is seen that the Competition Board has analyzed the disparaging behavior in some of its decisions before² the current EAE Asansör³ decision, in which the issue has been considered in the most detailed way. In these decisions, it was stated that behaviors such as disparaging an opponent and slander are not covered by the Law No. 4054. In addition, it was stated that the realization of abusive behavior by dominant undertakings or associations of undertakings alone will not be considered as abuse and will not lead to the application of Article 6. The Competition Board has also maintained this view in its EAE Asansör decision.

In our opinion, it should not be inferred from these decisions that disparaging behavior can never be evaluated in the context of competition law. In many parts of the decision, it was emphasized that it was not expected or possible for the behavior to have an impact on the competitive structure of the market. Therefore, if the market characteristics and dynamics allow the disparaging behavior to have consequences favorable for the exclusion of the competitor, it may be possible to adopt a different approach. Especially in stationary markets where there are dominant undertakings, violation detection can be made if there is a possibility that the behavior may have a negative impact on the market structure. Of course, in this case, many criteria will have to be considered together, such as whether there is a structure of the market that is conducive to negative consequences, whether a consistent and strong causal link can be established between the position of the undertaking performing the action in the market and its behavior and consequences and whether disparaging occurs systematically or not.

 

 

Explanations in this article reflect the writer's personal view on the matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any responsibility in respect of the information and explanations in the article. Please be advised to first receive professional assistance from the related experts before initiating an application regarding a specific matter, since the legislation is changed frequently and is open to different interpretations.

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