CCI Issues Cease And Desist Order Against Chemists Associations For Indulging In Anti-Competitive Practices

The Competition Commission of India (‘CCI’) issued an order on 23.08.2023 against district and tehsil level chemists associations in Sriganganagar district, Rajasthan (‘OPs’) which were found to have contravened the provisions of Section 3(3) read with Section 3(1) of the Competition Act, 2002 (the ‘Act’).

The case was initiated on the basis of information filed by Solar Life Sciences Medicare Private Ltd. (‘Solar’). It was alleged that chemists associations had indulged in anti-competitive practices by collectively boycotting the pharmaceutical products of Solar. The modus operandi of the OPs, inter alia, was to collectively decide and suggest margins and incentive schemes for the manufacturers/suppliers of pharmaceutical products. In the event of failure to offer such margins and incentive schemes to the chemists, the products of Solar were boycotted.

Based on the evidence on record as well as depositions of the Presidents of these associations, the CCI found OPs to be in contravention of provisions of Section 3(3)(a) and Section 3(3)(b) read with Section 3(1) of the Act. The CCI also found the Presidents of these associations liable under Section 48 of the Act.

After considering the mitigating factors, the CCI decided not to impose any monetary penalty. The CCI directed the associations through their respective Presidents to ensure compliance to the provisions of the Act by their respective members.