Competition Appeal Tribunal Quashes the CMA’s Excessive Pricing Decision against Pfizer and Flynn Pharma

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On 7 June 2018, the UK Competition Appeal Tribunal (CAT) held that the UK Competition and Markets Authority (CMA) misapplied the relevant legal test when finding that Pfizer and Flynn Pharma (Flynn) unfairly priced their epilepsy drug. The CAT quashed the record £84.2 million and £5.2 million fines that the CMA imposed on Pfizer and Flynn, respectively. While the CAT quashed the CMA’s fine and its findings of abuse, it did not itself make any finding as to the existence of an abuse. The case is now likely to be remitted to the CMA, which must consider its next steps. More broadly, the judgment sends a clear signal that the excessive pricing cases, which have in recent years become popular with some European competition authorities, including the European Commission, should remain rare and that the authorities should be wary of stepping in the shoes of price regulators, unless this is "soundly based on proper evidence and analysis."