CCI dismisses complaint against health ministry, CMSS

The CCI Wednesday dismissed a complaint alleging unfair business practices against the Ministry of Health and Family Welfare and the CMSS with regard to agreement for providing male contraceptives.

The Central Medical Services Society (CMSS) acts as the central procurement agency for health sector goods and services as required by the ministry.

The competition watchdog dismissed the complaint after finding no 'prima facie' contravention of the Competition Act, the CCI said in an 11-page order.

On allegation of violations of the Competition Act, the regulator observed that the ministry did not fall within the definition of 'enterprise' under the competition norms as it is engaged in forming policies for health and public welfare.

The ruling came on a complaint filed by Nashik-based Cupid Ltd, a company which is engaged in manufacturing and supply of male contraceptives and has been supplying it to the ministry since 2002.

It was alleged that CMSS abused its dominant position by forcing Cupid to sign the agreement for supplying the contraceptives without negotiation and the agreement contains one-sided and unfair terms.

Besides, by imposing varied printing requirements on the product, the company alleged anti-competitive practices by CMSS, so that the products cannot be sold to any other customer.

For the case, the Competition Commission of India (CCI) considered "the market for male condoms in India as relevant" and found that CMSS cannot be considered to be a dominant player.

Regarding anti-competitive practices, the CCI said the printing and packing requirements are only in respect of the product that is to be supplied to CMSS by the company.

Moreover, conditions of the agreement neither restrict the company from dealing in goods other than those supplied to the ministry nor impose any restriction on the company to sell its goods to any buyer other than the ministry.

Hence, "the Commission finds no prima facie case of contravention of the provisions of Section 3(4) or Section 4 of the Act" against the ministry and the CMSS.

Sections 3 and 4 of the Competition Act pertain to anti-competitive practices and abuse of dominant market position, respectively.