CCI Imposes Penalty on Pharma Companies and Trade Bodies

The Competition Commission of India (CCI) has imposed penalties on pharma companies as well as Madhya Pradesh Chemists and Druggist Association (MPCDA) and Indore Chemists Association (ICA) for indulging in anti-competitive trade practices.

What was the case?

The Madhya Pradesh Chemists and Distributors Federation had complained that associations like MPCDA and ICA had mandated the practice of issuing No Objection Certificates and Letter of Consent, prior to the appointment of stockists.

CCI noted that the practices were stifling competition in the market by limiting access of consumers to various pharmaceutical products and controlling the supply of drugs in the market.

Competition Commission of India

Competition Commission of India (CCI) is a statutory body established to meet the objectives enshrined under the Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007.

The CCI is required to:

• Eliminate practices having an adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.
• Give an opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007 prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and mergers and acquisitions) which causes or likely to cause an appreciable adverse effect on competition within India.