April 2025 – On 24 April 2025, the Belgian Competition Authority ("BCA") announced that it had imposed fines totalling EUR 11.2 million on pharmaceutical companies Johnson & Johnson, Boehringer Ingelheim, and Haleon. The sanctions were issued following a settlement in a case concerning anti-competitive practices linked to category management agreements for over-the-counter ("OTC") medicines.
According to the European Commission Guidelines on Vertical Restraints, category management agreements are agreements whereby a distributor delegates to a supplier (the so-called "category captain") the responsibility for marketing an entire category of products. While such agreements are generally considered unproblematic, the Guidelines caution that they may give rise to competition concerns if the supplier is able to limit, disadvantage, or exclude rival products, thereby leading to foreclosure effects.
This concern appears to have materialised in the case examined by the BCA. The authority found that the three pharmaceutical companies participated in a "Space Management Project" through which they collaborated with distributors to determine the placement of OTC medicines in selected pharmacies.
The BCA revealed that this agreement, which spanned over 15 years, resulted in the exclusion of competing products from the planograms used for OTC medicines while favouring their own offerings. Moreover, the arrangement included a monitoring mechanism enabling the parties to verify compliance with the agreed planograms at the pharmacy level.
As the full decision has yet to be published, the precise provisions of the Space Management Project that led the BCA to its conclusions remain unclear. Based on the information disclosed, it can be inferred that the companies exercised decisive influence over critical aspects such as product placement, promotion, and selection, with the objective of favouring their own products and disadvantaging competitors.
An additional point of interest concerns the relationship between the sanctioned companies and the distributors involved. According to the European Commission's Guidelines, distributors typically have little incentive to restrict their range of products, which is why category management agreements do not inherently raise competition concerns. However, in this case, it seems plausible that either the distributors had independent reasons to agree to such limitations or were subjected to pressure or coercion. The existence of a monitoring system lends considerable support to the latter hypothesis.
Another critical factor in assessing the legality of such
agreements is the market power held by the category captain(s). The
Guidelines specify that category management agreements may benefit
from the Vertical Block Exemption Regulation, provided that neither
the distributor nor the supplier exceeds a 30% market share. Beyond
this threshold, the likelihood increases that the category captain
could exert significant influence or constrain the distributor,
thereby raising serious competition concerns.
Impact of the decision on the EU competition landscape
Beyond the particularities of the case, as noted by the BCA's Prosecutor General, enforcement actions concerning category management agreements have been relatively rare within the EU competition framework in recent years.
The potential anti-competitive effects of such practices first attracted significant attention in 2010, when the French Competition Authority published a comprehensive study1 on category management agreements. While offering valuable guidance on how to assess these practices, the French Competition Authority concluded that its findings were preliminary, given the early stage of development of such agreements at that time. It further emphasised that the actual effects of category management practices would need to be reassessed in light of future market developments.
In this context, the BCA's recent decision presents an important opportunity to revisit and update the French Competition Authority's initial findings. A renewed analysis could provide deeper insights into how category management agreements have evolved and their current impact across various EU markets. Moreover, the decision may prompt greater scrutiny from other national competition authorities, particularly as market structures and practices differ significantly across EU Member States.
In light of the evolving enforcement landscape, companies active particularly in the food retail and pharmaceutical sectors are strongly encouraged to reassess their merchandising agreements with pharmacies and shelf-space arrangements with retailers. It is essential to ensure that these agreements comply with competition law, with a particular focus on avoiding practices that could improperly restrict competitors' market access or distort consumer choice.
Footnote
1. https://www.autoritedelaconcurrence.fr/sites/default/files/attachments/2020-07/10a25_en.pdf
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