Competition Commission of India (CCI) has found Dr. L.H. Hiranandani Hospital, Mumbai in contravention of Section 3 of the Competition Act, 2002. The informant Mr. Ramakant Kini had approached CCI alleging anti-competitive conduct by Dr. L.H. Hiranandani Hospital in not allowing any other stem cell bank to enter its premises to collect stem cell of the child except M/s Cryobank with whom it had an exclusive agreement.

Consequent upon detailed investigation by Director General, the Commission concluded that the exclusive agreement between the Dr. L.H. Hiranandani Hospital and M/s Cryobank was anti-competitive being in contravention of the provisions of section 3(1) of the Act as it had caused an appreciable adverse effect on competition in the stem cell banking market.

Accordingly, CCI, under Section 27 of the Act, has passed the following order:-

         “(a) The agreement of OP hospital with Cryobank for the years 2011-12 and 2012-13 are declared null and void.

         (b) The OP hospital shall not enter into a similar agreement with any stem cell bank in future.”

CCI also imposed a penalty of Rs. 3,81,58,303/- calculated at the rate of 4% of the average turnover of OP hospital. The penalty is to be deposited within 60 days of receipt of the order.

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

Exclusive agreement prohibition: hospital exclusivity struck down and future exclusive arrangements barred, with a monetary penalty imposed. The hospital's exclusive agreement with a single stem cell bank was found to foreclose competing banks and cause an appreciable adverse effect on competition in the stem cell banking market. Accordingly, the exclusivity agreements for the specified years were declared null and void, the hospital was prohibited from entering similar exclusive arrangements in future, and a monetary penalty based on average turnover was imposed and ordered to be deposited within the prescribed timeline.