Reckitt Benckiser reduces its competition law heartache in the UK / takes some of its own medicine

19.05.2014

As per our tagline, The CLIP Board is intended to be a blog covering anything and everything on the competition law/IP interface, and not just the TTBE… So returning to other issues, I spotted last week that Reckitt Benckiser has agreed to settle some more of the follow on claims it is facing since being fined by the OFT in 2010 for its conduct in relation to Gaviscon. Having already settled with the English health authority, Reckitt Benckiser has now also settled with the Scottish, Welsh and Northern Irish authorities.
This announcement hasn’t come as a surprise – not because of any ‘inside information’, but because of the many difficulties parties face in relation to follow on actions. We’ve commented before on the difficulty in this sector, not only in determining the amount of an award, but also in apportioning the damages amongst claimants – see here.
Given these difficulties, it remains to be seen what will happen to the claims brought by rivals: Teva, Sandoz and Pinewood Laboratories. Reckitt Benckiser’s settlement with the health authorities might in practice make issues of apportionment between these claimants (slightly) easier, given that only rivals’ claims now persist. Had the health authorities remained in the case, they would have been expected to argue that the entry of rivals and competition between rivals would have driven prices down significantly and quickly, i.e. that they had suffered significant financial harm in overpaying for Gaviscon. In contrast, each individual rival can be expected to argue that although prices would have fallen, they would only have fallen slightly, i.e. that its profits would have been substantial and therefore the damages it can claim larger (than had there been a significant and quick downward spiral in price).
Complex issues around whether rivals were ready to enter at all to drive down prices ‘but for’ Reckitt Benckiser’s behaviour will remain to be debated. Perhaps further settlements might be around the corner…

Sophie Lawrance

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