CCI finds no violation of competition norms in Maharashtra chemists' association case

The Competition Commission has found no evidence of Mumbai-based Retail and Dispensing Chemists Association (RDCA) indulging in anti-competitive practices with respect to charging fee for product information services from pharmaceutical companies.

After taking into consideration the report of its investigation arm Director General (DG) and views from various entities, the regulator has ruled that there is "no cogent evidence on record" to suggest that collection of Product Information Services (PIS) charges by the association was mandatory.

Generally, PIS is in the nature of a fee charged by chemists and druggists associations for introducing a new product/drug launched by the pharmaceutical companies in their bulletins and newsletters.

The CCI also said that implementation of the decision in the present case would be subject to proceedings before the Delhi High Court.

After the regulator ordered a detailed probe into the matter on August 25, 2015, the RDCA had moved the Delhi High Court as it was aggrieved by the decision.

On March 19, 2018, the court said that if any final order is passed by the CCI, it would be subject to the orders in the writ petition.

The watchdog said that the decisive test of whether PIS charges is anti-competitive or not depends on whether it has been collected on mandatory or voluntary basis.

"... there is no cogent evidence on record to suggest that collection of PIS charges by the Opposite Party (RDCA) from pharmaceutical companies was mandatory," the CCI said.

Companies, which were directly affected, have come forward during investigation to say that there has been no compulsion to pay such charges, post the CCI's previous orders and directives. The regulator had found such mandatory seeking of charges by various retailers associations to be anti-competitive, as per the 30-page order dated November 8.

Further, the regulator said evidence on record does not suggest that PIS charges were mandatory for introduction of new drugs in Mumbai.

There is no contravention of provisions under Section 3 of the Competition Act and subsequently "no question of liability of the office bearers of the opposite party arises in the present case", it added.

RDCA is affiliated to the Maharashtra State Chemists and Druggists Association (MSCDA). The latter is affiliated to All India Organisation of Chemists and Druggists (AIOCD).