13 February, 2019
On January 15, 2019, CCI passed an order under Section 27 of the CA02 imposing a penalty on the Chemists and Druggists Association of Baroda (‘CDAB’) for contravention of Section 3 of the CA02 by restricting the supply of drugs. [1]
In 2012, CCI had imposed a fine of INR 53,837 (approx. US $760) following information filed by M/s Vedant Bio-Sciences, Baroda alleging involvement of CDAB in fixing trade margins and mandating no-objection certificates for the appointment of stockists and launch of new drugs. The penalty was set aside by the Competition Appellate Tribunal in 2016 on the basis that CCI had violated principles of natural justice and the case was remanded back to CCI. After hearing the case again, CCI concluded that the pre-requisite for stockists to obtain no-objection certificates and the requirement to pay ‘product information service’ charges prior to the introduction of new products in the market, limits and controls the supply of drugs in the market.
In light of the above, CCI passed an order directing CDAB to cease and desist from such anti-competitive conduct and further imposed a penalty of INR 32,724 (approx. US $460) on CDAB for violation of Section 3(3)(a) and Section 3(3)(b) of the CA02.
[1] Case Number C-87/2009/DGIR.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
