The Competition Commission of India (CCI) has imposed a penalty of Rs 32,724 on the Chemists and Druggists Association of Baroda (CDAB) for indulging in restrictive trade practices. "The Commission imposed a penalty of Rs 32,724 calculated at the rate of 10 per cent of the average relevant income of CDAB for the relevant period," the Ministry of Corporate Affairs said in a statement on Wednesday.
The CCI has found the CDAB to be acting in contravention of the provisions of the Competition Act, 2002 and has accordingly directed it to "cease and desist" from indulging in the anti-competitive practice, under Section 27 of the Act. A complaint, filed with the Monopolies and Restrictive Trade Practices Commission (MRTPC) in 2009, alleged that the CDAB, through its practices, was limiting and controlling the supply of drugs and medicines in the market.
CDAB restricted the supply by mandating "No Objection Certificate" prior to the appointment of stockists and payment of "Product Information Service" charges prior to the introduction of new products in the market by pharmaceutical companies. Besides, there were allegations that CDAB was fixing trade margins for wholesalers and retailers, the Ministry said. MRTPC transferred the case to the CCI, it added. The Commission after forming a prima facie opinion directed the Office of Director-General to conduct the investigation into the matter. The investigation carried out by the DG established contravention on the part of CDAB, it said.
In 2012, the Commission imposed a monetary penalty, in addition, to cease and desist directions. Pursuant to an appeal filed by CDAB, the erstwhile Competition Appellate Tribunal (COMPAT) set aside the Commission's order in 2016 on a procedural issue and remanded the matter back to the Commission for fresh adjudication.
(With inputs from agencies.)