Spanish mandatory data-sharing ruled illegal by the European Court of Justice
14 July 2010
On 1st July 2010, the Court of Justice of the
European Union ruled that the Spanish national law providing for
mandatory data sharing of non vertebrate animal data is in breach
of Article 13 of the EU Plant Protection Directive 91/414
(Case
C-363/09 Commission v Spain).
Spain must now bring its national laws into compliance or face
the threat of a fine.
Background
To be able to market a plant protection product, a company needs
to seek an authorisation from the relevant Member State. That
authorisation will be granted if the applicant company can
demonstrate that its product is ‘safe’. In order to do that,
it will need to submit a detailed scientific dossier, containing or
referring to a variety of scientific data.
It is the ability to refer to data not owned by the applicant
company but by another company that is the subject of this court
case.
Under Spanish national law (Article 38 of Ley 43/2002 de
sanidad vegetal - referred to below as “the Spanish
phyto-sanitary law”), the holder of a plant protection product
authorisation is obliged to share non-vertebrate animal data with
other authorisation applicants. The non-vertebrate animal data are
classed as “data of social interest” in order to prevent the
creation of a monopoly in the market. In practice this means that
when an application is made to the Spanish authorities (Ministry of
Agriculture, Fish and Food) to obtain an authorisation for a plant
protection product, the data contained in that application may be
used by the Spanish authorities to benefit other applicants.
The European Commission (“Commission”), in its role as guardian
of the EU Treaty, considers that this provision of Spanish law does
not comply with the data protection provisions of Article 13(3) and
(4) of the Plant Protection Directive 91/414. Those provisions
explicitly state that Member States shall not use data contained in
an application for a plant protection product (Annex II and Annex
III data) to benefit other applicants without the data holders
explicit permission (letter of access) or until the applicable
period of data protection (5 or 10 years) has passed. The
Commission wrote to Spain under the “infringement procedure” of
Article 226 of the EC Treaty (now Article 258 of the TFEU) raising
this issue and requesting Spain to bring its national laws into
line with the Directive within two months. Spain responded by
arguing that the law was necessary to prevent a data holder
excluding other companies from entering the market through, i.a.,
abusing a dominant position under competition law.
The Commission did not consider the arguments put forward by
Spain to be convincing and accordingly brought an action before the
Court of Justice for a declaration that the Spanish law is
illegal.
Judgment of 1st July, Case C-363/09 Commission v
Spain
Spain did not contest the Commission’s argument that Article 38
of the Spanish phyto-sanitary law does not conform with Article
13(3) and (4) of the Plant Protection Directive 91/414. Instead,
Spain argued that it is in the process of adopting a new national
law which will amend the provision in question and bring Spanish
law into conformity with EU law. Following case law, such an
argument is insufficient to avoid a declaration that a national law
is in breach of EU law. The Commission had given Spain due warning
to amend its national law and it had failed to do so within the
prescribed deadline. In a short judgment, the Court agreed with the
Commission and declared that by maintaining Article 38 of the
Spanish phyto-sanitary law in force, Spain was in breach of its
data protection obligations under Article 13 of the Plant
Protection Directive 91/414.
Consequences
Spain is legally obliged to take steps to comply with this
judgment which means in practice that it must amend its national
laws to provide data protection for non-vertebrate animal studies
submitted in an application for a national authorisation for a
plant protection product post Annex I listing (Annex II data on the
active substance and Annex III data on the formulated plant
protection product). In the event that Spain fails to do so it
risks the Court imposing a financial penalty, should the Commission
so request.
Comment
This case is an important development for plant protection
product data holders in the EU. It illustrates the Commission’s
willingness to take steps to ensure that the harmonised system
conceived in the Plant Protection Directive 91/414 is not
undermined by disparate national rules on data protection. It is
notable however that this case concerns arguments related to
competition law (the potential for a data holder to hold a monopoly
on the market) and does not concern the Commission objecting to a
Member State’s particular views on steps required to protect human
health and the environment. This is yet another example, after the
recent antitrust complaint lodged by a generic company in Italy,
where competition law concerns are being raised in the context of
pesticides data sharing rules.