(CN) – An adviser to the European Court of Justice backed the lower court’s ruling that pharmaceutical giant GlaxoSmithKline tried to restrict parallel trade in its dealings with Spanish distributors.
In 2001, the European Commission found Glaxo in violation of antitrust laws, because it made Spanish wholesalers agree to pay more for drugs resold outside the country, in an effort to curb parallel trading.
Parallel trading occurs when companies import items at a cheaper price and resell them at a higher price, pocketing the difference.
The Court of First Instance, Europe’s second-highest court, upheld the antitrust ruling, but called for a re-examination of Glaxo’s claim that the higher prices would encourage research.
Advocate General Verica Trstenjak agreed that the lower court’s ruling should stand.
“A pharmaceutical undertaking which stipulates increased export prices in order to restrict parallel trade has as its object the restriction of competition,” Trstenjak wrote.
Trstenjak also advised that the European Commission should examine whether Glaxo’s trade practices could be exempted based on its contributions to research and development.