Baxter Fined $4.3 million for Attempt to Stifle Competition in Australia

Baxter Fined $4.3 million for Attempt to Stifle Competition in Australia
By Joe Schneider - Aug 25, 2010 10:15 PM PT

Baxter Healthcare Ltd., the Australian unit of Baxter International Inc., must pay A$4.9 million ($4.3 million) in fines for misusing its market power in the sale of fluids used by kidney patients, a court ruled.

Australia Federal Court Judge John R. Mansfield imposed the fines at a hearing today and ordered Baxter to pay the legal costs of the Australian Competition and Consumer Commission.

The Federal Court of Australia ruled in 2008 that Baxter broke the competition law by attempting to leverage its market power in sterile fluids to prevent competitors from winning contracts for peritoneal dialysis products.

Baxter, the sole supplier of certain sterile fluids in Australia, attempted to stem competition between 1998 and 2001 for peritoneal dialysis products, used by people with kidney failure, by offering discounts to the governments of the Australian Capital Territory, New South Wales, Queensland, South Australia and Western Australia if they purchased the package, the court said.

“Baxter used its market power in the sterile fluids market to achieve exclusive dealing by means of bundling to endeavor to snuff out competition,” Judge Roger Gyles wrote in the 2008 ruling.

Baxter had appealed the ruling to the High Court of Australia.

The court refused to hear the case before a decision on penalties was made by the lower court.

Baxter has the only Australian manufacturing plant for certain types of sterile fluids in Sydney, according to court documents.

The case is ACCC v. Baxter Healthcare Ltd. NSD1153/2002. Federal Court of Australia (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net.

http://www.bloomberg.com/news/2010-08-26/baxter-fined-4-3-million-for-attempt-to-stifle-competition-in-australia.html