In a recent decision, the French Competition Authority (FCA) ruled that Sanicorse, the only medical waste treatment company in Corsica, abused its dominant position by imposing excessively high prices on health care establishments. While very few excessive pricing cases were brought in the past, this decision follows a very recent surge in interest for high prices by competition authorities across Europe.
Sanicorse, a de facto monopolist
Under French law, health care establishments have to dispose of medical waste in a precisely defined manner, using specialist service providers. According to the FCA, the fact that Sanicorse is the only provider of such service on the island of Corsica gives it a de facto monopoly in this market.
Unjustified price increases
In its decision, the FCA fined Sanicorse for increasing abruptly, significantly, durably and in an unjustified manner the prices charged to health care establishments.
First, the increase in price was abrupt as it was suddenly imposed on Sanicorse’s clients without prior notice. Secondly, the increase on previous prices was significant (ranging, on average, from 60% to 88%, and reaching up to 135%). Third, the change in price was persistent as it lasted for 4 years. Finally, the FCA found that none of the arguments put forward by Sanicorse (i.e., the threat of potential entry of a new player in the market and increases in its costs and investments) could justify such change in its prices.
In a nutshell, the FCA found that the unjustified, long-lasting and significant increase of Sanicorse’s prices constituted excessive pricing and could be considered as an abuse of dominant position.