Big Firms, Be Careful What You Say: First UK Competition Disparagement Decision Puts Large Companies On Notice

Overview

The UK Competition and Markets Authority (“CMA”) has recently published a decision accepting commitments from Vifor Pharma (“Vifor”). This brings to a close an unprecedented abuse of dominance investigation based on claims of disparagement, from which companies active on innovative markets, especially in the pharma sector, can draw valuable lessons. Key takeaways centre on the increased risk of disparagement being treated as a competition law violation, and the importance of resolving cases with competition authorities with outcomes which work across different countries.

In the Vifor case, the CMA, like the European Commission (“Commission”) a few months before, looked into possible abuse of dominance concerns related to the disparagement of a competitor's product. The Vifor case was the CMA's first decision based on behaviour characterised as disparagement and is especially striking a) in its own right due to the nature of the behaviour Vifor has promised to adopt, and b) from a bigger picture perspective, since it forms part of a growing trend in disparagement cases being tackled by competition authorities. Regulators are looking beyond classic orders to stop problematic behaviour and seem increasingly prepared to require companies to take uncomfortable measures that they apparently view as necessary to give smaller players a fair chance to compete. In the United States (“US”), in contrast, private plaintiffs seem to be the first to test the waters on how courts will respond to antitrust-based disparagement claims. A global perspective in this context is therefore particularly important since this increased interest in disparagement by antitrust regulators could easily travel from one continent to another and create potential exposure in both Europe and the US.

This Legal Update digs deeper into the latest developments in this space and provides key takeaways regarding the increasing interest by competition authorities around the world with respect to allegedly disparaging conduct.

Background to Vifor: European Commission Investigation

In June 2022, the Commission launched an investigation into concerns that, between 2010 to 2024, Vifor had made potentially misleading claims about the safety of a high-dose intravenous iron product, "Monofer", manufactured by its competitor Pharmacosmos. Monofer competed with Vifor's own high-dose IV iron product, "Ferinject," the two being the only real options for this treatment. Monofer and Ferinject are used to treat iron deficiency and iron deficiency anaemia. The potentially misleading claims centred around Monofer being a "dextran-based" product, whilst Ferinject was dextran-free (potentially connecting Monofer to "historical negative safety connotations" of older dextran-based products), and an association of Monofer with a higher number of hypersensitivity reactions in patients than Ferinject.

To close this investigation, Vifor offered commitments to the Commission, which were adopted in July 2024. These comprised binding promises:

• To undertake a communications campaign rectifying the effects of the claims;
• Not to engage in external communications about Monofer's safety profile using information neither based on its label nor derived from clinical trials designed to compare Ferinject and Monofer across the EEA; and
• To implement a number of internal mechanisms to ensure compliance of relevant external communications and internal training materials.

In line with its standard approach to commitments, the Commission found no infringement of competition law. Nevertheless, it made very clear that Vifor's behaviour had to change going forward and that it must, via a series of external communications, attempt to undo the damage of the misleading claims previously made.

Vifor Comes to the UK: the CMA Investigation

In October 2024, Vifor provided very similar commitments to the CMA in respect of its investigation which was almost identical to the Commission's bar the UK focus. After a consultation to consider views of third parties, the CMA decided that the commitments addressed its competition concerns and closed its  investigation.

The specificities of the UK commitments focus on the fact that in the United Kingdom (“UK”), the National Health Service (“NHS”), NHS Trusts and hospitals are the main customers for products such as Monofer and Ferinject. The willingness of healthcare professionals in such customer organizations to select treatments for patients includes consideration of the safety, efficacy and convenience of the products. The advertising of prescription-only medicines in the UK is governed by regulations overseen by the Medicines and Healthcare products Regulatory Agency and the Association of the British Pharmaceutical Industry Code of Practice of the Pharmaceutical Industry (the “ABPI Code”). These regulations acknowledge the importance of information being presented to healthcare professionals in advertising to be "balanced, fair, objective and unambiguous" and "complete". Although the CMA's decision is based purely on competition law grounds, rather than medical regulations, these naturally formed an important context.

The CMA noted that Vifor held a dominant position in the market for the supply of high-dose IV iron in the UK during 2010-2024. In making this finding, the CMA identified:

• Vifor’s market shares, with the Ferinject product having a market share of more than 50% by value and volume throughout 2010-2024;  
• its alleged ability to sustain a constant price premium for Ferinject over Monofer; and
• the allegedly high barriers to entry in the market.

The CMA explained that, in such a context, an allegedly dominant pharmaceutical company that makes misleading statements about the safety of a rival product, does not compete on the merits, i.e. “normal” competition. It decided that conduct by a dominant undertaking can constitute an abuse of a dominant position where it consists in the dissemination of objectively misleading information, and when it is capable of restricting competition. The CMA took the view that the claims made in this case may have been objectively misleading, as they were inconsistent with findings and decisions by health authorities and contradicted by scientific or clinical evidence. The CMA also took the view that the claims were specifically intended to influence decisions by healthcare professionals as to whether to select Monofer or Ferinject, and that they were capable of influencing those decisions and therefore of effecting competition between the products. In other words, the CMA went into quite a detailed legal analysis of the facts which, whilst officially falling short of an infringement finding, seems to give ample ammunition for future litigation.

Closely following the commitments given to the Commission, Vifor's commitments to the CMA include a detailed communications campaign correcting any misinformation about Monofer and the implementation of compliance measures to reduce the risk of this happening going forward. The lengths to which Vifor has been required to go to in this regard is quite extraordinary, with even draft emails to NHS trusts being included in the CMA's decision.

The term of the UK commitments runs until 22 July 2034, falling into line with the ten-year duration agreed to by the Commission. Non-compliance with these commitments during this time is likely to lead to significant penalties, even without the CMA having to reopen its investigation into the abuse of dominance per se.

In addition, Vifor offered to make an ex-gratia payment of £23 million to the UK Department of Health and Social Care. Although this is not the first time this kind of payment to the NHS has formed part of a CMA decision, the payment in the current case seems especially significant given the government's recent Strategic Steer calling for the CMA to “tackle as swiftly as possible…anti-competitive conduct which harms businesses and consumers.”Having a payment going to the NHS, rather than a fine payment being made to the CMA, gives the impression of a very clear step in this direction. 

Wider Disparagement Context

Vifor was the Commission's first case which focused uniquely on allegedly disparaging conduct. A few months later, in its second decision about disparagement campaigns, the Commission imposed a fine for both patent-related and disparagement tactics.

At the level of national competition authorities in the European Union (“EU”), some have developed disparagement abuse cases for a long time. Amongst these, the French Competition Authority ("FCA") has a particularly important track record. The FCA has imposed significant fines on dominant companies it considers to have abusively disparaged competitors' products, particularly in the pharma industry. Enforcement cases are also found in a range of other sectors, such as the electric supply sector, the sector for the sale of fresh dairy products (in the French West Indies), and the broadband Internet access sector. These cases reflect growing enforcement activity on the national level within the EU by targeting anti-competitive disparagement practices. Although the Commission's ongoing update to its abuse of dominance guidance focuses uniquely on exclusionary abuses, not exploitative ones—and, as such, disparagement cases are out of scope—some might consider this a missed opportunity to bring recent experience in this area together.

Although the US has established avenues to address false and misleading statements via the Lanham Act, the bar to reach liability under the Sherman Act, the US’s primary antitrust law, is distinct. This topic was explored in Mercatus Grp., LLC v. Lake Forest Hosp., 641 F.3d 834 (7th Cir. 2011), in which the Court of Appeals affirmed the District Court’s summary judgment holding in favor of the defendant. The plaintiff initially brought suit against the defendant, claiming that the hospital’s extensive, multi-pronged campaigns in response to the plaintiff announcing its intention to open a physician center were attempts to monopolize the markets for “comprehensive physician services” and “diagnostic imaging services” in the area. The Seventh Circuit, which has arguably taken a stricter view than other circuits, emphasized that “absent an accompanying coercive enforcement mechanism of some kind, even demonstrably false ‘[c]ommercial speech is not actionable under the antitrust laws.’” The opinion further explained that trade disparagement or false speech does not result in an injury to competition such that it would be actionable under the Sherman Act because “genuine anticompetitive effects of false and misleading statements about a competitor are minimal, at best.” The court concluded that even if  “a falsehood results in some harm to a competitor, that is a matter better suited for the laws against unfair competition or false advertising, not the antitrust laws, which are ‘concerned with the protection of competition, not competitors.’”

Key Takeaways

The Vifor case was the first pure disparagement investigation for both the Commission and the CMA, forming part of an increasingly important trend. Key takeaways from these investigations include:

• There is now a clear line of authority across Europe establishing that disparagement can be tackled under the rules prohibiting abuse of dominance. The boundaries of what is legitimate discussion of the merits of your product and what turns into illegal disparagement will depend on the facts of each case. Large players need to be careful that their behaviour is not caught by the constant extension of the abuse of dominance rules. Even though in the US, courts are more sceptical of these claims in the antitrust context, businesses should be mindful regarding comparative advertisement, particularly towards smaller players.
• Given the ongoing calls for competition authorities around the world to make sure markets work fairly and consumers have real choice, disparagement cases are likely to remain on the enforcement list especially in sectors where integrity of information is particularly important and significantly effects market dynamics. Businesses should check that their communications about competitors comply with competition law. Specific training for PR and external communications teams might be beneficial.
• In the UK, anti-competitive conduct in the pharmaceutical sector which affects the NHS and citizens' health is a particularly sensitive and priority area for the CMA. Likewise, "the Commission contributes to keeping drugs affordable, preserving choice of treatment and fostering innovation, to the benefit of EU patients and national healthcare systems." The FCA also follows this approach. The FTC has similarly renewed its commitment to keeping the healthcare sector at the forefront, believing that rigorous oversight of pharmaceutical companies is crucial to helping the American people as prices continue to rise. Notwithstanding the shifting economic and political climate in which competition authorities work, pharmaceutical markets remain in focus.
• The communication campaign which Vifor must enact across Europe is striking. Most businesses would cringe at the notion of speaking highly of competitor's products, let alone having to admit they were wrong to say otherwise. Many would prefer to just pay a fine. In contrast, competition authorities are determined not only to stop the abuse, but try and undo the effect of the abuse. When dealing with competition authorities, businesses need to strategically plan ahead to ensure solutions are found which work for all at the table.
• The Vifor case in the UK moved relatively quickly compared to other CMA abuse of dominance cases, a cause of which may have been the amount of EU work being copied across. Although this might have saved some duplication, it also demonstrates the potential risks for businesses of increased information sharing between competition authorities. If the recently agreed EU-UK Competition Cooperation Agreement is ratified, businesses operating in Europe will need to consider how to handle a more joined-up approach from all relevant authorities and consider reducing the scope of waivers or even refusing to sign them depending on the circumstances of each case.

The Antitrust team at Mayer Brown can assist with all aspects of competition law and liaison with competition authorities around the world. Given these developments in the use of antitrust to address disparagement of competitors, and the precedent set by the Vifor case for significant commitments from businesses subject to investigation, it is important to seek legal guidance if your company has questions regarding these kinds of conduct. Please do not hesitate to reach out to any of the authors for future information about this topic and additional developments.