UPDATE 2-Reckitt fined 10.2 mln stg for mkt position abuse
* Fine relates to Reckitt's Gaviscon heartburn medicine
* First OFT fine over abuse of dominant position in 7 yrs
* Fine reduced after Reckitt co-operated with authorities
(Rewrites with lawyer and Reckitt comment, shares)
By David Jones
LONDON, Oct 15 (Reuters) - Reckitt Benckiser (RB.L) was fined 10.2 million pounds ($16.35 million) on Friday after admitting abuse of its dominant position in Britain for the supply of its heartburn medicine Gaviscon.
The penalty was handed out by Britain's competition watchdog, the Office of Fair Trading (OFT), in its first fine handed down for abuse of a dominant position since 2003 and followed complaints from a generic producer of the medicine.
Reckitt admitted infringing British and European competition law by withdrawing and delisting Gaviscon Liquid original from Britain's National Health Service (NHS) prescription service in 2005 and replacing it with a different-formula Gaviscon Liquid advance, for which there is no generic rival.
It meant that when family doctors searched for the product under the Gaviscon brand, the NHS prescription database would find only the advance version -- which is still patent protected -- and no cheaper generic alternatives.
Irish generic medicine maker Pinewood helped bring the action because the move affected sales of its Gaviscon alternative, Acidex.
"This shows that big companies cannot abuse a dominant position and escape unpunished for anti-competitive behaviour," said Marc Israel, competition lawyer at law firm Macfarlanes which acted for Pinewood in the action.
"Acidex is widely available but Reckitt's conduct resulted in market penetration of the cheaper generic alternative being severely limited."
The OFT, which first highlighted in February the possible abuse by Reckitt, said the fine was reduced from 12 million pounds to reflect the British consumer goods group's admission and decision to co-operate with the OFT.
"Vigorous competition between firms supplying the public sector is vital to ensure taxpayers get the best value for money," OFT chief executive John Fingleton said.
Reckitt replied in a statement: "This OFT investigation relates to an infringement that took place a number of years ago under a highly complex area of competition law, on which there have only more recently been clarifying cases.
"Therefore, while the company believed at the time it was acting within the law, as is always our intent, we respect the view of the OFT and have agreed to settle."
Reckitt shares were 0.1 percent higher at 34.54 pounds by 1200 GMT, valuing the group, which also makes Nurofen painkillers, Finish dishwasher products and Air Wick air fresheners, at around 25 billion pounds.
(Reporting by David Jones; Editing by Dan Lalor and David Hulmes)
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