EU Competition Law Enforcement: Pharmaceutical Sector Inquiry - Revision history

LMyhre at 20:27, 18 June 2011

2011-06-18T20:27:04Z

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	== Introduction ==		== Introduction ==

LMyhre at 20:25, 18 June 2011

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	== Introduction ==		== Introduction ==
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	== Conclusion		== Conclusion ==
	==

	Gathering thorough and accurate information is the first step in when the EC suspects an entity has enaged in anti-competitve behavior.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Dawn raids, while hard on entities, greatly increase the odds that the EC will be able to collect as much information as possible before it can be destroyed, hidden, or modified. Thorough information can inform further investigations against individual companies, but can also provide a basis for modifying laws to improve business climates and consumer welfare. For example, information uncovered in the pharma sector inquiry has led to serious discussions about creating a single patent system with a dedicated court might help to streamline the introduction of new drugs onto the market.		Gathering thorough and accurate information is the first step in when the EC suspects an entity has enaged in anti-competitve behavior.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Dawn raids, while hard on entities, greatly increase the odds that the EC will be able to collect as much information as possible before it can be destroyed, hidden, or modified. Thorough information can inform further investigations against individual companies, but can also provide a basis for modifying laws to improve business climates and consumer welfare. For example, information uncovered in the pharma sector inquiry has led to serious discussions about creating a single patent system with a dedicated court might help to streamline the introduction of new drugs onto the market.

LMyhre at 20:24, 18 June 2011

2011-06-18T20:24:59Z

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	~~'''~~While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.~~'''~~
			== Introduction ==


			While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.

LMyhre at 20:24, 18 June 2011

2011-06-18T20:24:18Z

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	~~== Introduction ==~~

			'''While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.'''
	While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.

LMyhre at 20:23, 18 June 2011

2011-06-18T20:23:40Z

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	== Introduction ==		== Introduction ==

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	==== Why Dawn Raids ====		=== Why Dawn Raids ===


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	==== Next Steps ====		=== Next Steps ===

LMyhre at 20:22, 18 June 2011

2011-06-18T20:22:58Z

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	~~'''The European Union’s Pharmaceutical Sector Inquiry:~~
	~~Competition Law in the European Union'''~~


	== Introduction ==		== Introduction ==

LMyhre at 20:22, 18 June 2011

2011-06-18T20:22:23Z

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	='''The European Union’s Pharmaceutical Sector Inquiry:		'''The European Union’s Pharmaceutical Sector Inquiry:
	Competition Law in the European Union'''=		Competition Law in the European Union'''

LMyhre at 20:21, 18 June 2011

2011-06-18T20:21:50Z

← Older revision		Revision as of 20:21, 18 June 2011
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	'''The European Union’s Pharmaceutical Sector Inquiry:		='''The European Union’s Pharmaceutical Sector Inquiry:
	Competition Law in the European Union'''		Competition Law in the European Union'''=


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	==== a. Why Dawn Raids ====		==== Why Dawn Raids ====


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	During a dawn raid, the EC can take copies of documents and computer files, and can interview people at the company.<ref>“Application of Articles 81 and 82 of the EC Treaty.” Europa, Feb 21, 2007. Available at http://europa.eu/scadplus/leg/en/lvb/l26092.htm, 8 Jun 2009.</ref> Company officials must assist the search through their files.<ref>“Application of Articles 81 and 82 of the EC Treaty.” Europa, Feb 21, 2007. Available at http://europa.eu/scadplus/leg/en/lvb/l26092.htm, 8 Jun 2009.</ref> Any attempts to block access to the requested information, that cannot be sustained later in court, can be cause for charges of obstructing the inquiry.<ref> Summary of Commission Decision of 20 November 2007 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/38.432 — Professional videotapes). Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:057:0010:0012:EN:PDF. 18 June 2011.</ref>		During a dawn raid, the EC can take copies of documents and computer files, and can interview people at the company.<ref>“Application of Articles 81 and 82 of the EC Treaty.” Europa, Feb 21, 2007. Available at http://europa.eu/scadplus/leg/en/lvb/l26092.htm, 8 Jun 2009.</ref> Company officials must assist the search through their files.<ref>“Application of Articles 81 and 82 of the EC Treaty.” Europa, Feb 21, 2007. Available at http://europa.eu/scadplus/leg/en/lvb/l26092.htm, 8 Jun 2009.</ref> Any attempts to block access to the requested information, that cannot be sustained later in court, can be cause for charges of obstructing the inquiry.<ref> Summary of Commission Decision of 20 November 2007 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/38.432 — Professional videotapes). Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:057:0010:0012:EN:PDF. 18 June 2011.</ref>

	b. Next Steps
			==== Next Steps ====


	After the dawn raids on the pharma sector, the EC consulted with stakeholders in an effort to gain a better understanding of the situation.<ref> European Commission. Press Release: Antitrust: preliminary report of sector inquiry into pharmaceuticals – frequently asked questions. Europa, MEMO/08/746, Brussels, 28th November 2008. Available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/746&format=PDF&aged=0&language=EN&guiLanguage=en, 8 Jun 2009.</ref> Stakeholders included “industry associations at the European level: e.g. the European Federation of Pharmaceutical Industries and Associations (EFPIA) representing the originator companies and the European Generic Medicines Association (EGA) representing the generic companies,” as well as “representatives of consumer and patients associations, insurance companies, doctors, pharmacies, wholesalers, hospitals, parallel traders, patent offices and competition authorities.” The EC also sent questionnaires to many of the stakeholders, and solicited consultations from the public. At least 70 different agencies, businesses, law firms, individuals and organizations responded to the invitation to supply more information that would clarify their perspectives of the business practices of the pharmaceutical sector.<ref> The consultation contributions they submitted to the EC may be viewed by the public and are linked from this EC web page: http://ec.europa.eu/competition/consultations/2009_pharma/index.html, 8 Jun 2009.</ref>		After the dawn raids on the pharma sector, the EC consulted with stakeholders in an effort to gain a better understanding of the situation.<ref> European Commission. Press Release: Antitrust: preliminary report of sector inquiry into pharmaceuticals – frequently asked questions. Europa, MEMO/08/746, Brussels, 28th November 2008. Available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/746&format=PDF&aged=0&language=EN&guiLanguage=en, 8 Jun 2009.</ref> Stakeholders included “industry associations at the European level: e.g. the European Federation of Pharmaceutical Industries and Associations (EFPIA) representing the originator companies and the European Generic Medicines Association (EGA) representing the generic companies,” as well as “representatives of consumer and patients associations, insurance companies, doctors, pharmacies, wholesalers, hospitals, parallel traders, patent offices and competition authorities.” The EC also sent questionnaires to many of the stakeholders, and solicited consultations from the public. At least 70 different agencies, businesses, law firms, individuals and organizations responded to the invitation to supply more information that would clarify their perspectives of the business practices of the pharmaceutical sector.<ref> The consultation contributions they submitted to the EC may be viewed by the public and are linked from this EC web page: http://ec.europa.eu/competition/consultations/2009_pharma/index.html, 8 Jun 2009.</ref>
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	reference=IP/08/1829&format=HTML&aged=0&language=EN&guiLanguage=en, 8 Jun 2009.</ref>		reference=IP/08/1829&format=HTML&aged=0&language=EN&guiLanguage=en, 8 Jun 2009.</ref>

	Patents and Competition Law
			== Patents and Competition Law ==


	One of the important findings of the EC’s preliminary report on the pharmaceutical sector was that dominant firms were abusing their positions in order to block the entry of generic drugs and other new drugs from market.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> This abuse took several forms, including excessive patents on each medication, paying generic manufacturers to delay bringing their products to market, and excessive lawsuits designed to create delays in generic products.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> Taken together, the behaviors of the dominant firms appear to have created a chilling effect on the development and introduction of new medications onto the market.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref>		One of the important findings of the EC’s preliminary report on the pharmaceutical sector was that dominant firms were abusing their positions in order to block the entry of generic drugs and other new drugs from market.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> This abuse took several forms, including excessive patents on each medication, paying generic manufacturers to delay bringing their products to market, and excessive lawsuits designed to create delays in generic products.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> Taken together, the behaviors of the dominant firms appear to have created a chilling effect on the development and introduction of new medications onto the market.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref>
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	Currently, each Member State in the EU has its own patent system. Both originator and generic drug companies agree that a single EU patent process, with a dedicated patent court, would help to improve the patent situation for all concerned.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> Based on its findings so far, which also support a simpler, dedicated, single patent system, it appears likely that the EU may try to move in this direction.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref>		Currently, each Member State in the EU has its own patent system. Both originator and generic drug companies agree that a single EU patent process, with a dedicated patent court, would help to improve the patent situation for all concerned.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref> Based on its findings so far, which also support a simpler, dedicated, single patent system, it appears likely that the EU may try to move in this direction.<ref> European Commission. “Pharmaceutical Sector Inquiry Preliminary Report.” Nov 28, 2008. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf, 8 Jun 2009.</ref>

	Public versus Private Enforcement
			== Public versus Private Enforcement ==


	Generally speaking, competition complaints are filed with the EC or with Member States' Competition Authorities.<ref> European Commission. “Competing Fairly.” Europa, Dec 14, 2008. Available at http://ec.europa.eu/youreurope/business/profiting-from-eu-market/competing-fairly/index_en.htm, 8 Jun 2009.</ref> The relevant competition authorities then conduct inquiries or investigations, and may prosecute any companies found to be engaging in anti-competitive behaviors.<ref> European Commission. “Competing Fairly.” Europa, Dec 14, 2008. Available at http://ec.europa.eu/youreurope/business/profiting-from-eu-market/competing-fairly/index_en.htm, 8 Jun 2009.</ref> Depending on the country, suspected antitrust violators go to trial through courts or competition authorities, which then mete out fines or injunctions to those convicted. This is public enforcement of the criminal law, which is carried on and funded by the government, with the goal of protecting competitors and consumers.		Generally speaking, competition complaints are filed with the EC or with Member States' Competition Authorities.<ref> European Commission. “Competing Fairly.” Europa, Dec 14, 2008. Available at http://ec.europa.eu/youreurope/business/profiting-from-eu-market/competing-fairly/index_en.htm, 8 Jun 2009.</ref> The relevant competition authorities then conduct inquiries or investigations, and may prosecute any companies found to be engaging in anti-competitive behaviors.<ref> European Commission. “Competing Fairly.” Europa, Dec 14, 2008. Available at http://ec.europa.eu/youreurope/business/profiting-from-eu-market/competing-fairly/index_en.htm, 8 Jun 2009.</ref> Depending on the country, suspected antitrust violators go to trial through courts or competition authorities, which then mete out fines or injunctions to those convicted. This is public enforcement of the criminal law, which is carried on and funded by the government, with the goal of protecting competitors and consumers.
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	In addition to compensating victims, private actions also have the potential to increase the amount of anti-competitive practices that are brought to light, and to produce more of certain kinds of evidence required to successfully prosecute or correct violations.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> According to an impact report prepared for the EC, victims often have more accurate and detailed information that the competition authorities.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Studies have also shown that when private enforcement increased enormously in the U.S., public enforcement remained stable and did not decrease.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Instead, a significantly more violations were caught after private enforcement became more common.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Better enforcement leads to a better business environment for competitors, and lower prices for consumers.		In addition to compensating victims, private actions also have the potential to increase the amount of anti-competitive practices that are brought to light, and to produce more of certain kinds of evidence required to successfully prosecute or correct violations.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> According to an impact report prepared for the EC, victims often have more accurate and detailed information that the competition authorities.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Studies have also shown that when private enforcement increased enormously in the U.S., public enforcement remained stable and did not decrease.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Instead, a significantly more violations were caught after private enforcement became more common.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Better enforcement leads to a better business environment for competitors, and lower prices for consumers.

	~~II.~~ Leniency Programs
			== Leniency Programs ==


	Leniency programs often produce the best evidence for an antitrust case, because the parties who take part in them have been personally involved in the illegal behavior.<ref> Directorate-General for Competition of the European Commission. “EU competition policy and the consumer: Making sure companies play fair.” Available at http://www.master.fu-berlin.de/mbl/media/eu_flyer.pdf. 18 June 2011.</ref> However, to date, no company in the pharmaceutical sector inquiry has stepped forward to take advantage of a leniency program.<ref> Directorate-General for Competition of the European Commission. “EU competition policy and the consumer: Making sure companies play fair.” Available at http://www.master.fu-berlin.de/mbl/media/eu_flyer.pdf. 18 June 2011.</ref>		Leniency programs often produce the best evidence for an antitrust case, because the parties who take part in them have been personally involved in the illegal behavior.<ref> Directorate-General for Competition of the European Commission. “EU competition policy and the consumer: Making sure companies play fair.” Available at http://www.master.fu-berlin.de/mbl/media/eu_flyer.pdf. 18 June 2011.</ref> However, to date, no company in the pharmaceutical sector inquiry has stepped forward to take advantage of a leniency program.<ref> Directorate-General for Competition of the European Commission. “EU competition policy and the consumer: Making sure companies play fair.” Available at http://www.master.fu-berlin.de/mbl/media/eu_flyer.pdf. 18 June 2011.</ref>

	~~III.~~ Conclusion
			== Conclusion
			==

	Gathering thorough and accurate information is the first step in when the EC suspects an entity has enaged in anti-competitve behavior.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Dawn raids, while hard on entities, greatly increase the odds that the EC will be able to collect as much information as possible before it can be destroyed, hidden, or modified. Thorough information can inform further investigations against individual companies, but can also provide a basis for modifying laws to improve business climates and consumer welfare. For example, information uncovered in the pharma sector inquiry has led to serious discussions about creating a single patent system with a dedicated court might help to streamline the introduction of new drugs onto the market.		Gathering thorough and accurate information is the first step in when the EC suspects an entity has enaged in anti-competitve behavior.<ref>“Making antitrust damages actions more effective in the EU: welfare impact and potential scenarios.” Report For The European Commission, Contract DG COMP/2006/A3/012, Dec 21, 2007, p. 75. Available at http://ec.europa.eu/competition/antitrust/actionsdamages/files_white_paper/impact_study.pdf, 8 Jun 2009.</ref> Dawn raids, while hard on entities, greatly increase the odds that the EC will be able to collect as much information as possible before it can be destroyed, hidden, or modified. Thorough information can inform further investigations against individual companies, but can also provide a basis for modifying laws to improve business climates and consumer welfare. For example, information uncovered in the pharma sector inquiry has led to serious discussions about creating a single patent system with a dedicated court might help to streamline the introduction of new drugs onto the market.

LMyhre at 20:17, 18 June 2011

2011-06-18T20:17:56Z

← Older revision		Revision as of 20:17, 18 June 2011
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			'''The European Union’s Pharmaceutical Sector Inquiry:
			Competition Law in the European Union'''

	~~The European Union’s Pharmaceutical Sector Inquiry:~~
	~~Competition Law in the European Union~~		== Introduction ==


	While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.		While antitrust laws in the European Union and the United States are similar, the rationale for enforcement of those laws, and the mechanisms for their enforcement, can vary considerably. The recent European Union inquiry into the pharmaceutical sector’s business practices provides a lens for examining how competition law operates in the EU.

	Dawn Raids
			== Dawn Raids ==


	Perhaps the starkest difference between EU and U.S. antitrust enforcement is the use in the EU of so-called “dawn raids” when competition violations are suspected, but evidence is lacking. On January 16, 2008, the headquarters of several pharmaceutical companies throughout Europe experienced surprise “dawn raids” by officials from the European Commission, the EU agency charged with enforcement of EU competition law.<ref> Gow, David and Marianne Barriaux. “EC stages dawn raids on Europe's pharmaceutical companies.” The Guardian, Jan 17, 2008. Available at http://www.guardian.co.uk/business/2008/jan/17		Perhaps the starkest difference between EU and U.S. antitrust enforcement is the use in the EU of so-called “dawn raids” when competition violations are suspected, but evidence is lacking. On January 16, 2008, the headquarters of several pharmaceutical companies throughout Europe experienced surprise “dawn raids” by officials from the European Commission, the EU agency charged with enforcement of EU competition law.<ref> Gow, David and Marianne Barriaux. “EC stages dawn raids on Europe's pharmaceutical companies.” The Guardian, Jan 17, 2008. Available at http://www.guardian.co.uk/business/2008/jan/17
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	In a dawn raid, a company must permit EC officials to take copies of any files or documents that might be relevant to the EC’s inquiry.<ref> Judgment of the Court of First Instance in Joined Cases T-125/03 & T-253/03, Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v. Commission of the European Communities, 17 September 2007.</ref> The information taken will help the EC decide if a full investigation should be opened. This is different from the U.S., where a search warrant must be granted by a court, and only when there is already evidence of wrong-doing. In the recent EU pharmaceutical sector inquiry, there was no evidence, only “indications that competition may not be working as it should be.”<ref> European Commission. Pharmaceuticals Sector Inquiry. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html, 8 Jun 2009.</ref> The raids were not conducted in order to find evidence of wrong-doing by individual entities, only to determine how business practices in general were being conducted in the sector.<ref> European Commission. Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of the Council Regulation (EC) No 1/2003. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/decision_en.pdf, 8 Jun 2009.</ref> At the same time, however, any evidence of wrong-doing that is found during a dawn raid may be used to prosecute companies later.<ref> European Commission. Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of the Council Regulation (EC) No 1/2003.</ref>		In a dawn raid, a company must permit EC officials to take copies of any files or documents that might be relevant to the EC’s inquiry.<ref> Judgment of the Court of First Instance in Joined Cases T-125/03 & T-253/03, Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v. Commission of the European Communities, 17 September 2007.</ref> The information taken will help the EC decide if a full investigation should be opened. This is different from the U.S., where a search warrant must be granted by a court, and only when there is already evidence of wrong-doing. In the recent EU pharmaceutical sector inquiry, there was no evidence, only “indications that competition may not be working as it should be.”<ref> European Commission. Pharmaceuticals Sector Inquiry. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html, 8 Jun 2009.</ref> The raids were not conducted in order to find evidence of wrong-doing by individual entities, only to determine how business practices in general were being conducted in the sector.<ref> European Commission. Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of the Council Regulation (EC) No 1/2003. Available at http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/decision_en.pdf, 8 Jun 2009.</ref> At the same time, however, any evidence of wrong-doing that is found during a dawn raid may be used to prosecute companies later.<ref> European Commission. Commission Decision of 15 January 2008 initiating an inquiry into the pharmaceutical sector pursuant to Article 17 of the Council Regulation (EC) No 1/2003.</ref>

	Defense Protections
			=== Defense Protections ===


	While a search warrant is not required for an EU “dawn raid,” there are some limited protections for entities being investigated in this way. First, EC officials may not force their way into a company’s premises.<ref> Roe, E. “When the chips are down.” Engineering & Technology, Vol 3:8, May 10 2008, pp. 78-79.</ref> Typically, they wait until the business opens its doors in the morning, before entering.<ref> Roe, E. “When the chips are down.” Engineering & Technology, Vol 3:8, May 10 2008, pp. 78-79.</ref>		While a search warrant is not required for an EU “dawn raid,” there are some limited protections for entities being investigated in this way. First, EC officials may not force their way into a company’s premises.<ref> Roe, E. “When the chips are down.” Engineering & Technology, Vol 3:8, May 10 2008, pp. 78-79.</ref> Typically, they wait until the business opens its doors in the morning, before entering.<ref> Roe, E. “When the chips are down.” Engineering & Technology, Vol 3:8, May 10 2008, pp. 78-79.</ref>
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	/449/major-changes-french-competition-law/, 8 Jun 2009.</ref> During the EU’s recent pharmaceutical inquiry, French drug maker Sanofi Aventis refused to allow the EC to search its premises because the EC had not first obtained a court order from a French court.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> The EC has since charged Sanofi Aventis with obstructing the investigation, and the matter is headed to an EU court.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> It is not entirely clear whether EU or national law will prevail on this point.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> If Sanofi Aventis loses, however, it faces fines of up to 1% of its 2007 annual sales.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref>		/449/major-changes-french-competition-law/, 8 Jun 2009.</ref> During the EU’s recent pharmaceutical inquiry, French drug maker Sanofi Aventis refused to allow the EC to search its premises because the EC had not first obtained a court order from a French court.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> The EC has since charged Sanofi Aventis with obstructing the investigation, and the matter is headed to an EU court.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> It is not entirely clear whether EU or national law will prevail on this point.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref> If Sanofi Aventis loses, however, it faces fines of up to 1% of its 2007 annual sales.<ref> Sage, Adam. “French drug giant Sanofi-Aventis obstructed inquiry, say EU officials.” The Times, Jun 3, 2008. Available at http://business.timesonline.co.uk/tol/business/industry_sectors/health/article4053354.ece, 8 Jun 2009.</ref>

	a. Why Dawn Raids
			==== a. Why Dawn Raids ====


	The EC conducts dawn raids during inquiries in order to gather as much complete and accurate information as possible. By surprising entities with the inspections, the EC prevents them from destroying, hiding, or altering many documents and files that could shed light on the issues being investigated.<ref> Gow, David and Marianne Barriaux. “EC stages dawn raids on Europe's pharmaceutical companies.” The Guardian, Jan 17, 2008. Available at http://www.guardian.co.uk/business/2008/jan/17		The EC conducts dawn raids during inquiries in order to gather as much complete and accurate information as possible. By surprising entities with the inspections, the EC prevents them from destroying, hiding, or altering many documents and files that could shed light on the issues being investigated.<ref> Gow, David and Marianne Barriaux. “EC stages dawn raids on Europe's pharmaceutical companies.” The Guardian, Jan 17, 2008. Available at http://www.guardian.co.uk/business/2008/jan/17

LMyhre at 20:16, 18 June 2011

2011-06-18T20:16:39Z

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