Edited By Elina Saviharju

In this issue:

  • Finnish Government Defines Its Policy on the Availability of Broadband Networks
  • Revised Rules on Marketing to Consumers Enter into Force
  • Pharmaceutical Packaging Constitutes Marketing in the Sense of the Swedish Marketing Act
  • ECJ: Pharmaceutical Company's Refusal to Meet Ordinary Orders by Wholesalers in Order to Prevent Parallel Exports Constitutes Abuse of Dominant Position
  • User Fee Planned for Mobile TV
  • New Authorization and Supervision Authority for Social Welfare and Health Begins to Operate at the Beginning of Year 2009
  • Canadian Court Confirms that Copyright Holders Entitled to Royalties for Ringtones
  • Finland Drops Three Places in the Latest E-Readiness Ranking

IT & COMMUNICATIONS

Finnish Government Defines Its Policy on the Availability of Broadband Networks

The Finnish Government has recently published its updated policy on the availability of a high-quality broadband networks in Finland. According to the new policy, fast broadband connections should be available to nearly all permanent residencies in Finland as well as companies and the public administration by the end of the year 2015. The Government intends to issue a more detailed policy on the steps to achieve this goal.

The construction of the network would be principally based on commercial decisions of the market actors. However, where market-based solutions would not be available, public funds, i.e., funding from the State, provinces, municipalities and the EU would be used to build the network. The purpose is that provincial unions would request bids in order to make telecommunications companies compete over the construction of the network. The aim of the policy is to assure that the communications networks correspond with the needs of the society now and in the future, and that no one would be left without the technical possibility to enjoy the benefits from the information society in Finland.

MARKETING & CONSUMER

Revised Rules on Marketing to Consumers Enter into Force

As was reported in our 19 June 2008 newsletter, Government Bill 32/2008 concerning implementation of the Unfair Commercial Practices Directive 2005/29/EC was passed by the Finnish Government in June. The implementation required amendments mainly to Chapter 2 of the Consumer Protection Act (38/1978, as amended) concerning marketing to consumers. The revised provisions have entered into force on 1 October 2008.

The amendments extend the applicability of Chapter 2 of the Consumer Protection Act to cover also commercial practices taking place after a commercial transaction has been made, such as after-sales services. The underlying principles of business-to-consumer marketing regulation have not been changed as such, but the amended provisions are written in significantly more detail than before.

The amended Chapter 2 of the Consumer Protection Act contains, inter alia, specific provisions detailing marketing or practices contrary to good practice, as well as specifying when marketing shall be considered inappropriate. Also an express prohibition on the use of aggressive commercial practices is among the amended provisions.

The regulation on inappropriate commercial practices is purely domestic in nature. As a main rule, marketing is considered inappropriate if it is in clear conflict with commonly accepted social values. Typical inappropriate marketing practices include such that insult human dignity or religious or political convictions. Also marketing that is discriminatory towards gender, ethnic origin or sexual orientation or that encourages activities that threaten health, public security or the environment without any proper relation to the marketed product are generally inappropriate. The amendments concerning inappropriate conduct also contain special provisions regulating commercial practices directed at minors or practices that commonly attract minors.

Pharmaceutical Packaging Constitutes Marketing in the Sense of the Swedish Marketing Act

The Swedish Market Court overruled a District Court's decision to grant interim injunction in a case concerning essentially the packaging of parallel imported pharmaceuticals on 15 September 2008. The Market Court confirmed that pharmaceutical packages constitute marketing under the Swedish Marketing Act, but due to inadequacies in the definition of the relevant market concluded that an injunction was not justified.

The key issue on trial was a claim by an original manufacturer that a parallel importer sold pharmaceuticals in packaging confusingly similar to the packaging of the original manufacturer. The pharmaceutical in question was only available from pharmacies and sold on prescription.

The District Court found that the parallel importer's packaging was misleading and ordered an interim injunction on the sale of the pharmaceuticals in such packaging. The parallel importer appealed the decision to the Market Court primarily on the grounds that the District Court had incorrectly found the packaging to constitute marketing. The Market Court rejected the parallel importers primary argumentation and confirmed that packaging of pharmaceuticals indeed constitutes marketing in the meaning of the Swedish Marketing Act and the Marketing Act is applicable.

The Market Court was not satisfied with the manner in which the original manufacturer had determined the relevant market. According to the market investigations presented by the original manufacturer, the relevant group of customers was pharmacists. However, further investigation indicated that the relevant group could be broader than just pharmacists, and include also consumers, for example.

As the definition of the relevant market was inadequate, the Market Court found that, at this stage of the process, the original manufacturer had not been able to show that probable cause of harm necessary to order an interim injunction. On these grounds the Market Court revoked the interim injunction rendered by the District Court.

LIFE SCIENCE

ECJ: Pharmaceutical Company's Refusal to Meet Ordinary Orders by Wholesalers in Order to Prevent Parallel Exports Constitutes Abuse of Dominant Position

In a recent preliminary ruling the European Court of Justice ("ECJ") held that a company in a dominant position on the relevant market for medicinal products is abusing its dominant position if it refuses to meet ordinary orders of wholesalers in order to stop parallel exports. In the case GlaxoSmithKline AEVE ("GSK AEVE"), a Greek subsidiary of GlaxoSmithKline plc ("GSK"), which imports and distributes GSK pharmaceutical products and holds marketing authorizations for certain medicines in Greece, had stopped meeting the orders of Greek wholesalers who buy the medicines in question for distribution in Greece and export to other Member States. The wholesalers brought an action claiming that GSK AEVE's sales policy breached both Greek and Community competition law, and the Athens Court of Appeals referred its questions on the compatibility of the practices in question with the community rules to the ECJ.

The ECJ held that by refusing to meet the orders, GSK AEVE aims to limit parallel exports to the markets of other Member States in which the medicines in question are sold for higher prices. The ECJ noted that parallel exports of pharmaceuticals products from a lower-price Member State to higher-price Member States can benefit consumers. The ECJ analyzed the possible effect of State regulation on the prices of medicines and held that the Community competition rules cannot be interpreted in such a way that, to defend its own commercial interests, the only choice for a pharmaceutical company in a dominant position would be to not place its products on the market in a lower price Member State.

The ECJ held that a company in a dominant position must be able to take reasonable and proportionate steps to protect its own commercial interests. In order to evaluate whether such steps are reasonable and proportionate, the ECJ held that it is for the national court to decide whether the wholesalers' orders are ordinary in the light of their previous trading relations with the pharmaceutical company in question and the size of the orders in relation to the requirements of the market in the relevant Member State.

IN BRIEF

User Fee Planned for Mobile TV

Teleoperators offering mobile TV services in Finland are contemplating to collect a fee from consumers for the use of the service in order to cover distribution costs. This would mean that no channels could be viewed for free on mobile TV. Digita, the Finnish distributor of mobile TV services, is currently negotiating with several operators and content suppliers on defining the fee. The negotiations are planned to be concluded by the end of fall 2008. The current coverage of the mobile TV network is approximately 40% of the Finnish population.

New Authorization and Supervision Authority for Social Welfare and Health Begins to Operate at the Beginning of Year 2009

The Government is proposing that a new Authorization and Supervision Authority for Social Welfare and Health would begin its operations on 1 January 2009. The new Authorization and Supervision Authority would take over the tasks of both the National Product Control Agency for Welfare and Health (STTV) and the National Authority for Medicolegal Affairs (TEO). As a new task the Authorization and Supervision Authority would be assigned the guidance and supervision of welfare services. The Authority would also manage the guidance and supervision of issues relating to alcohol, tobacco, and chemical legislation.

Canadian Court Confirms that Copyright Holders Entitled to Royalties for Ringtones

The Supreme Court of Canada has recently refused to grant leave to appeal in a case concerning the obligation to pay royalties to copyright holders for ringtones. The case had been decided by the Copyright Board of Canada which found that the Society of Composers, Authors and Music Publishers of Canada can retroactively collect royalties from telecommunication operators for ringtones downloaded during 2003―2005. Bell Mobility, Telus Mobility and the Canadian Wireless Telecommunications Association appealed to the Federal Court and stated that the sale and download of ringtones was not public communication but actually a private transaction because downloading did not guarantee that the ringtone would be played. The Federal Court upheld the Copyright Board's decision which is final after the leave to appeal was denied.

Finland Drops Three Places in the Latest E-Readiness Ranking

Finland drops three places in the Economist Intelligence Unit's latest ranking. The average e-readiness score of the 70 countries surveyed increased to 6.39 (on a scale of one to ten) from 6.24 in 2007. However, Finland was unable to maintain its previous ICT spending levels or to improve an already impressive record of public and corporate access to digital channels. Finland dropped three places down to the 13th rank and was displaced in the top ten by Austria. Countries in the top ten had made significant improvements in both fixed and wireless broadband access, as well as in their innovation environments. The conclusions of the ranking were, inter alia, that wide broadband accessibility and legislation protective of intellectual property are factors of great importance for the future development of competitiveness.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.