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COMPETITION: COMMISSION DROPS CASE AGAINST CANADIAN MOLYBDENUM PRODUCER

Summary:

The European Commission decided on July 9 to drop its Article 86 case for alleged abuse of dominant market position against Nordion, a Canadian company that produces and sells Molybdenum 99 (Mo-99), a base product for radiopharmaceuticals used in nuclear medicine. The Commission's move was triggered by Nordion's announcement that it would renounce the exclusivity clauses contained in its sales contracts with European customers which the EU executive had felt was hindering competition in the radiopharmaceuticals sector. "This opening up of the market will have an immediate positive effect insofar as European purchasers will henceforth be completely free to purchase Mo-99 from any other supplier", the Commission said when announcing its decision to drop the case.

In 1996, the Commission had received a complaint by a Belgian company, IRE (Institut National des Radio l ments), Nordion's main competitor, which was directed in particular against the conclusion of exclusive and long-term supply agreements for Mo-99 between Nordion and its principal world-wide customers. This complaint triggered an Article 86 procedure in February 1997 and the Commission then sent a formal statement of objections to the Canadian producer for abuse of a dominant position concerning the conclusion of the exclusive contracts, by preventing the only European competitor, IRE, from developing, with the risk of squeezing the Belgian company out of the market in the long term and, moreover, by making the entry of potential new competitors impossible. In response to the Commission's objections, Nordion decided not to implement exclusive rights in contracts with its European customers and IRE withdrew its complaint.

However, the Commission said it would be watching closely to see that Nordion sticks to its promise to end exclusive rights and that there is no further distortion of competition in this particular sector, which is of the highest importance for public health (the Mo-99 a radio-isotope used mainly for early detection and diagnosis of cancer, cardiovascular problems and AIDS).

In addition, the Commission said it had learnt of the inquiry carried out in Japan by the Japanese Fair Trade Commission, which led to a JFTC Recommendation on June 24 to end exclusivity clauses tying Nordion's Japanese customers. The EU executive also said it was prepared to inform the competition authorities in the United States of this matter, as well as of its concerns regarding the existence of exclusivity clauses in Nordion contracts with its American customers.

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Publication:European Report
Date:Jul 15, 1998
Words:396
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