Allergan PLC & Ors v The Competition and Markets Authority

An appeal against a competition infringement decision is a unitary process. The Competition Appeal Tribunal must determine it on the evidence and submissions before it. An anti-competitive agreement may be inferred from the circumstances, but an understanding must cross the line between undertakings; unilateral incentives are insufficient. Chapter I liability is strict. Intentional infringement and section 36(3) of the Competition Act 1998 do not make dishonesty an element, and the CMA need not allege or put dishonesty to a witness where its substantive case is clear. A tacit restriction may continue after personnel or ownership changes if the evidence supports continuation at undertaking level. The Court restored the dismissal of the companies’ appeals while overturning additional findings concerning dishonesty.

The CMA found that Auden and Actavis supplied 10mg hydrocortisone tablets to Waymade and AMCo at substantial discounts in exchange for their staying out of the market, contrary to the Chapter I prohibition. The companies appealed to the Competition Appeal Tribunal.

In H2, reported at [2023] CAT 57, the Tribunal provisionally upheld the infringement findings but made additional findings concerning dishonesty and adjourned for a further due-process hearing. In H3, reported at [2024] CAT 17, it allowed the companies’ appeals, holding that the CMA had not fully put its case to the witnesses. The CMA appealed H3 and sought permission to appeal H2. The companies also sought permission to appeal H2. The central issues were whether the CMA’s case was clear and properly put, and whether the Tribunal had adopted a permissible appellate procedure.

1. Disposition. The CMA’s appeal against H3 was allowed. The CMA was granted permission to appeal H2 and its appeal was allowed. The companies’ applications for permission to appeal H2 were dismissed. The companies’ appeals from the CMA’s infringement decision were finally dismissed.
2. Chapter I prohibition. Section 2 of the Competition Act 1998 requires an agreement or understanding between undertakings having an anti-competitive object or effect. The agreement may be inferred from all the circumstances, but something must cross the line between the undertakings. Unilateral conduct or an attempt by one undertaking to incentivise another to act uncompetitively is insufficient. This was consistent with BAI and EU Commission v Bayer AG (Joined Cases C-201 P & C-301 P) and CMA v R (VW AG) and BMW AG [2023] EWCA Civ 1506.
3. Dishonesty and cross-examination. An infringement is a matter of strict liability. Section 36(3) concerns the mental state required before a penalty may be imposed; intentional infringement is not equivalent to dishonesty. The CMA therefore did not need to allege or prove dishonesty, misconduct or that a witness was lying. Its case was sufficiently put to Mr Beighton through detailed questioning about the value transfer, the commercial negotiations, the threat of market entry, the written agreements and the alleged understanding. The reference to a supply agreement as a sham did not make the CMA’s case one under the traditional concealment analysis discussed in Snook v London & West Riding Investments Ltd [1967] 2 QB 786.
4. Tribunal procedure. Under section 46(1) and paragraph 3(2) of Schedule 8 to the Competition Act 1998, the Tribunal had to determine the appeals as a unitary process. It was procedurally inappropriate and unjust to issue a provisional decision containing substantive findings, reopen fundamental questions, permit a second round of argument and then reverse the outcome. If residual concerns remained after argument, the Tribunal should have sought focused further submissions before giving judgment or decided the appeals on the evidence already heard.
5. Continuing infringement and other grounds. An anti-competitive understanding could continue after Mr Amit Patel left Auden and Actavis acquired the business. Liability operates at undertaking level, and continuation could be inferred from the unchanged advantageous supply terms and AMCo’s continued absence from the market without proof that later directors knew how the arrangement had originated. An understanding between actual or potential competitors to keep a product off the market was capable of being a by-object infringement. The Tribunal’s findings that the skinny-label and full-label products were substitutes disclosed no arguable point of law.
6. Final order. The provisional dismissal of the companies’ appeals in H2 was finalised and reinstated. The additional findings concerning dishonesty, dishonest shams and the specific inferred conversation between Mr Amit Patel and Mr Beighton were overturned. No rehearing was required.

1. Court of Appeal (Civil Division). In the present judgment, the court allowed the CMA’s appeals, dismissed the companies’ applications for permission to appeal, reinstated the substantive dismissal of the companies’ appeals and overturned the additional findings concerning dishonesty.
2. Competition Appeal Tribunal. H3, [2024] CAT 17, allowed the companies’ appeals on the basis that the CMA had failed to put its case fully to the witnesses.
3. Competition Appeal Tribunal. H2, [2023] CAT 57, provisionally upheld the infringement findings, made additional findings concerning dishonesty and adjourned for further argument on due process.
4. Competition and Markets Authority. On 15 July 2021, in Case 50277, the CMA made the infringement decision under the Competition Act 1998 which the companies challenged.