Mediq/Eurocept: product market definition
In December 2021, the ACM prohibited the intended acquisition of ambulatory electronic infusion pump supplier Eurocept by rival supplier Mediq. According to the ACM, the transaction would have made Mediq “an unavoidable contracting party” with a market share of 80-90% on the market for ambulatory electronic infusion pumps for deployment at home.
The ACM based this market definition on information it obtained through surveys and interviews with various market players, including health insurers, hospitals, home care organisations, pharmacists, suppliers and manufacturers of infusion pumps. According to the ACM, the market investigation showed that the choice of infusion pump depends on the type of medication and the volume to be administered. As a result, other types of pumps, such as elastomer pumps or stationary pumps, are not fully interchangeable with ambulatory electronic infusion pumps and therefore do not belong to the same product market.
On appeal, the Rotterdam District Court found for the following reasons that the ACM had failed to demonstrate that the relevant product market consists of ambulatory electronic infusion pumps only:
- With regard to the potential interchangeability with elastomer pumps, the court found that the ACM had insufficiently investigated which medication can be administered with which infusion pump, given statements by market parties acknowledging the possibility of administering various medicines with both an ambulatory electronic infusion pump and an elastomer pump.
- With regard to the possible interchangeability with stationary infusion pumps, the court found that the ACM had insufficiently challenged Mediq’s claims, supported by various examples, that stationary infusion pumps are successfully used by various healthcare providers for home deployment.
Bergman Clinics/Mauritskliniek: indispensability
In December 2021, the ACM blocked the intended acquisition of healthcare provider Mauritskliniek by its competitor Bergman Clinics. The ACM ruled that the transaction would further strengthen Bergman Clinics’ bargaining position, thereby making it an indispensable contracting partner for health insurers.
The ACM mainly based this indispensability finding on the input received through surveys and interviews with major health insurers. In the context of these surveys, the ACM shared the outcome of its price analysis into Bergman Clinics’ increased prices following the 2018 merger with NL Healthcare Clinics.
On appeal, the Rotterdam District Court noted that sharing the price analysis may have influenced the health insurers’ answers. It factored in that possibility when finding that the ACM had insufficiently substantiated Bergman Clinics’ indispensability, alongside the following observations:
- The court pointed to survey responses by health insurers showing that shifting care from Bergman Clinics to alternative health care providers is considered difficult but not impossible. Unlike the ACM, the court did not consider selective contracting unrealistic, since health insurers had not actually tried to stop purchasing certain forms of care from Bergman Clinics and Bergman Clinics had disputed that it would not cooperate in selective contracting.
- The court found that the ACM had failed to sufficiently substantiate its finding that health insurers’ customers do not regard other healthcare providers as an acceptable alternative. Even if based on health insurers’ survey responses, that finding is inconsistent with the ACM’s finding in the 2018 Bergman Clinics / NL Healthcare Clinics merger and therefore cannot stand without a new investigation into customer preferences.
If at first you don’t succeed ... try, try again
These court rulings show that a market investigation based on qualitative research requires a careful balancing of the context and content of the questions posed and the manner in which the answers provided should be interpreted.
Even though it is not yet clear whether the ACM will indeed try again with regard to these two overturned merger prohibitions, it is likely to try harder at fact-checking every dissenting response when using qualitative research in its merger assessments.
Companies may therefore be confronted with more – and more elaborate – third-party questionnaires in merger control processes before the ACM.
At the same time, the ACM may be faced with more appeals, particularly when relying on third party responses: its merger prohibition list is getting longer and longer.
This article was published in the Competition Newsletter of June 2023. Other articles in this newsletter: