Introduction
This essay employs the IRAC (Issue, Rule, Application, Conclusion) method to analyse multiple scenarios involving Your Health Germany GmbH, a subsidiary of the multinational pharmaceutical company Your Health Inc., and related entities, in the context of European Union (EU) law. The purpose is to advise Michael, a director of Your Health Inc., on whether the conduct of Your Health Germany and associated parties breaches EU legal provisions. The scenarios cover competition law, data protection, non-discrimination principles, freedom of establishment, and distribution agreements. Each issue will be systematically addressed under the IRAC framework, drawing on relevant EU treaties, regulations, and case law to provide a sound legal analysis. The essay aims to demonstrate a broad understanding of EU law, supported by academic sources, while offering logical arguments and clear explanations.
Scenario 1: Pricing Coordination with No Virus Ltd
Issue: Does the informal agreement between Your Health Germany and No Virus Ltd to coordinate pricing breach EU competition law?
Rule: Under Article 101 of the Treaty on the Functioning of the European Union (TFEU), agreements or concerted practices between undertakings that restrict competition within the internal market are prohibited, especially if they fix prices or share markets (European Union, 2012).
Application: The informal agreement made during the December 2024 Christmas party to inform each other before changing prices, followed by consistent patterns of price increases and reductions since mid-2025, suggests a concerted practice. Your Health Germany (39% EU market share) and No Virus Ltd (30% EU market share) collectively hold a significant portion of the market for antiviral herbal medicines, indicating their agreement likely affects trade between Member States. Price coordination is a restriction of competition ‘by object’, as established in cases like Consten and Grundig v Commission (1966), and does not require proof of actual effect on the market.
Conclusion: The conduct likely breaches Article 101 TFEU. Michael should be advised that such agreements are void and may result in fines or legal action by the European Commission.
Scenario 2: Exclusive Agreements in Sweden
Issue: Does Your Health Germany’s exclusive agreements with Swedish purchasers, including a 30% refund for 90% purchases, breach EU competition law?
Rule: Article 102 TFEU prohibits abuse of a dominant position within the internal market, including imposing unfair trading conditions or exclusionary practices such as exclusive dealing (European Union, 2012).
Application: Your Health Germany holds 39% of the EU market for antiviral herbal medicines, which, alongside its parent company’s global dominance (70%), suggests a dominant position in the relevant market. The exclusive agreements with major Swedish purchasers, tied to a substantial refund, may foreclose competitors by incentivising purchasers to source primarily from Your Health Germany. This resembles the exclusionary conduct condemned in Hoffmann-La Roche v Commission (1979), where loyalty rebates were deemed abusive.
Conclusion: This conduct likely constitutes an abuse of dominance under Article 102 TFEU. Michael should be advised to review and potentially revise these agreements to avoid legal repercussions.
Scenario 3: Data Practices on Your Health Online Platform
Issue: Does Your Health Germany’s tracking of end users and targeted advertising via the Your Health Online platform breach EU data protection law?
Rule: The General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679) mandates that personal data processing must be lawful, transparent, and based on consent or legitimate grounds (European Union, 2016).
Application: Tracking end users outside the platform and using data for targeted advertising raises concerns about transparency and consent. If users are unaware of such tracking or have not explicitly consented, this violates GDPR principles under Articles 5 and 6. Furthermore, the scale of data collection across Europe and America suggests a risk of non-compliance with data minimisation rules. Cases like Google Spain v AEPD (2014) highlight the strict obligations on data controllers.
Conclusion: The practice likely breaches GDPR. Michael should ensure compliance by implementing clear consent mechanisms and data protection policies.
Scenario 4: Discrimination in Employment Practices
Issue: Does Your Health Germany’s refusal to employ third-country nationals based on religious beliefs breach EU law?
Rule: Directive 2000/78/EC establishes a framework for equal treatment in employment, prohibiting discrimination on grounds of religion or belief (European Union, 2000).
Application: Michael’s public statement that third-country nationals cannot be employed due to potential religious conflicts directly contravenes the Directive. Discrimination based on nationality or religion is not justifiable unless it constitutes a genuine occupational requirement, which is unlikely for executive manager roles. Case law such as Feryn (2008) confirms that public statements of discriminatory intent violate EU law.
Conclusion: This policy breaches EU anti-discrimination law. Michael should revise the hiring policy to comply with equal treatment principles.
Scenario 5: Estonian Legislation on Legal Seat
Issue: Does Estonian legislation preventing companies from establishing a legal seat while running business from another Member State violate EU law?
Rule: Articles 49 and 54 TFEU guarantee freedom of establishment, allowing companies to set up in any Member State under the same conditions as nationals (European Union, 2012).
Application: The fictitious Estonian law restricting legal seat establishment while business operations remain elsewhere appears to hinder freedom of establishment. In Centros Ltd v Erhvervs- og Selskabsstyrelsen (1999), the Court of Justice of the EU (CJEU) held that Member States cannot impose unjustified barriers to establishment. Unless Estonia can justify this restriction on public policy grounds, it likely infringes on EU law.
Conclusion: The legislation likely violates Articles 49 and 54 TFEU. Michael should seek further legal advice on challenging this restriction.
Scenario 6: Distribution Agreement with Health for Greece
Issue: Does the distribution agreement between Your Health Germany and Health for Greece breach EU competition law?
Rule: Article 101 TFEU prohibits agreements that restrict competition, while Regulation (EU) 330/2010 provides exemptions for vertical agreements unless they include hardcore restrictions like export bans or price fixing (European Union, 2010).
Application: The agreement’s terms, including exclusivity, export bans, fixed pricing, and online sales restrictions, contain several hardcore restrictions under Regulation 330/2010. Export bans within the EU, as seen in GlaxoSmithKline v Commission (2009), and resale price maintenance are considered serious infringements of competition law. While Your Health Germany holds only 16% of the Greek market, the cumulative effect of these restrictions likely affects intra-EU trade.
Conclusion: The agreement likely breaches Article 101 TFEU and does not qualify for exemption. Michael should renegotiate the terms to align with EU law.
Conclusion
This analysis has identified multiple potential breaches of EU law by Your Health Germany and associated entities across competition, data protection, employment, establishment, and distribution practices. The informal pricing coordination with No Virus Ltd and exclusive agreements in Sweden likely violate Articles 101 and 102 TFEU, respectively. Data tracking practices contravene GDPR, while discriminatory hiring breaches Directive 2000/78/EC. Estonian legislation appears incompatible with freedom of establishment, and the Greek distribution agreement includes prohibited restrictions under Article 101 TFEU. Michael should urgently review these practices, seek specialised legal counsel, and implement compliance measures to mitigate risks of fines, legal challenges, or reputational damage. The implications of non-compliance underscore the importance of aligning multinational operations with EU legal standards.
References
- European Union. (2000) Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation. Official Journal of the European Communities.
- European Union. (2010) Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices. Official Journal of the European Union.
- European Union. (2012) Consolidated Version of the Treaty on the Functioning of the European Union. Official Journal of the European Union.
- European Union. (2016) Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data. Official Journal of the European Union.
