Competition Commission of India (CCI) has imposed a penalty of Rs.55.42 lakhs on Chemists and Druggists Association, Ferozepur(CDAF) and its office bearers. Penalty has been imposed on the basis of information filed by M/s Arora Medical Hall, Ferozepur alleging contravention of the provisions of Competition Act. The informant had alleged that the CDAF had imposed conditions to take an NOC and Letter of Credit from the CDAF. Further, CDAF directed its members to stop purchasing goods from the informant vide their resolution on 26.5.2012 and directed all the wholesalers to stop dealings with the retailers who continued to purchase goods from the informant. The informant alleged that such actions were creating barriers to new entrants in the market but also driving existing competitors out of the market.

After a detailed investigation, CCI came to the conclusion that the acts of the CDAF were anti-competitive and the conduct needs to be penalized to act as a deterrent in future for any other association/office bearer who engaged in such type of actions.

The Commission has imposed the penalty on the basis of 10% of the average income/receipts on the Association and its office bearers amounting to a total of Rs.55.42 lakhs. CCI has also directed CDAF and its office bearers to “Cease and Desist” from indulging in such anti-competitive practices. The Commission also directed CDAF to file undertakings to this effect within a period of 30 days from the date of receipt of the order.

The Commission directed the opposite parties to deposit the penalty amount within the 60 days of receipt of the order.

Detailed order can be seen at CCI’s website www.cci.gov.in

Anti-competitive practices: penalty imposed and directions to cease and desist, plus requirement to file undertakings and deposit penalty. CCI found that the Chemists and Druggists Association, Ferozepur and its office bearers engaged in anti-competitive practices by conditioning trade on association-issued NOCs and letters of credit and by directing members and wholesalers to stop dealing with a competing retailer, creating barriers to entry and excluding a competitor. The Commission imposed a monetary sanction based on a percentage of the Association's average receipts, directed them to Cease and Desist, required undertakings within a set period, and ordered deposit of the penalty within a prescribed timeframe.