Competition Comm penalises Esaote for unfair business ways

The Competition Commission has penalised Italy's Esaote SpA and its group entity Esaote Asia Pacific Diagnostic for unfair business practices in supply of certain MRI machines, according to an order.

Besides imposing a fine of Rs 9.33 lakh on the two entities, the watchdog has directed them to "cease and desist" from indulging in anti-competitive practices.

The Competition Commission of India (CCI) has found that the two entities abused their dominant position in supplying dedicated standing/tilting MRI (Magnetic Resonance Imaging) machines.

The order has been passed on a complaint filed by House of Diagnostics LLP, which is into medical diagnostics and diagnostic imaging services.

It was alleged that Esaote charged huge sum of money for supplying spare parts and refused to perform its obligations under the contract.

Among others, the regulator found that Esaote acted unfairly and thereby abused its dominant position by refusing to provide head coils with the machines to the informant, an official release said Thursday.

"The CCI also found Esaote to have demanded arbitrary charges in derogation of its contractual obligations for comprehensive maintenance contract in respect of G-Scan MRI machines," it added.

The fine amount of Rs 9.33 lakh translates to 10 per cent of the average relevant turnover of the preceding three financial years from the sale of G-Scan MRI machines in India only.

The majority order was passed by CCI members Augustine Peter and U C Nahta, while Chairperson Sudhir Mittal gave a dissent note.

In the dissent note, Mittal said that the relevant market cannot be narrowed to standing/tilting MRI machines alone as any market delineation would have to necessarily include all MRI machines irrespective of some additional features or functionalities.

He noted that in the absence of market power, the question of abuse of dominance did not arise.