New Delhi, Fair trade regulator CCI on Monday closed a long-running probe into alleged anti-competitive practices against AIOCD, its affiliated associations and several pharma companies, after finding no violation of competition law.
The case pertained to allegations of the All India Organisation of Chemists & Druggists (AIOCD) and its affiliated associations getting engaged in anti-competitive practices.
These practices included making No Objection Certificates (NOCs) or Letters of Consent (LOCs) mandatory for appointing stockists, levying Product Information Service (PIS) charges for launching medicines, fixing trade margins and organising boycotts against pharmaceutical companies.
After examining the Director General’s (DG) investigation, CCI said there was no evidence to establish that NOCs or LOCs were mandatory for stockist appointments or that payment of PIS charges was a precondition for launching pharmaceutical products.
The regulator also found no material to substantiate allegations of organised or systematic boycotts by AIOCD or its affiliated associations against pharmaceutical companies, including Sun Pharma, Pfizer, Glaxo SmithKline and Torrent Pharmaceuticals, among others.
It observed that the evidence relied upon during the investigation was insufficient to prove the existence of an anti-competitive agreement.
“Consequently, the findings recorded by the DG against OP-1, OP-5, OP-6, OP-7, OP-8, OP-10 and OP-11 for alleged contravention of Section 3(3)(b) of the Act cannot be sustained,” the Competition Commission of India (CCI) said in an order.
Section 3 pertains to anti-competitive agreements.
In the case of pharmaceutical companies, CCI said that they could not be treated as parties to any anti-competitive arrangement merely because they had interacted with trade associations.
The Commission observed that the companies appeared to be recipients of the associations’ conduct rather than willing participants in any agreement prohibited under Section 3 of the Competition Act.
In view of these findings, the competition watchdog also held that no liability arose against the office-bearers of the companies under Section 48 of the Competition Act.
Accordingly, CCI concluded that no case of contravention of the provisions of Section 3 of the Act is made out against any of the opposite parties and ordered the closure of the proceedings.
