Dismissing the information provided to it alleging the violation of Competition Act by the Union Health & Family Welfare Ministry and Central Medical Services Society (CMSS) in the procurement of male condoms. The informant before the CCI was Cupid Limited. It is the company which won the bid to supply the male condoms to CMSS which acts as the procurement agency for the Union Ministry of Health and Family Welfare. The procured condoms are to be provided to the lower-income groups as part of the birth-control policies of the government. It has been alleged that CMSS has abused its dominance by providing for a standard contract for the transaction with unilateral conditions on the informant violating the Section 4 of the Competition Act, 2002. It has also put restrictions on the informant in exercising its right to deal with the other buyers. It is violation of the Sections 3(4)(b) & 3(4)(d) of the Act.
The CCI bench which concluded the matter comprised of Ashok Kumar Gupta, Augustine Peter and U C Nahata. It said that the ministry is not an “enterprise” within the meaning of the Section 2(h) of the Act. Its work is related to framing policies and guidelines for the public health sector. It is not involved in any commercial activities. However, CMSS was found to be an enterprise under the Section. The CCI called the relevant market as the “market for male condoms in the territory of India”. It applied the concept of “demand side substitutability” inversely by assessing the availability of the suppliers. It said that suppliers have the option of supplying their products either to the government or in the commercial spaces or in exports.
It also said that CMSS acts with social objective and had no reason to influence the market in its favor when it can procure 75% of its products from HLL at much cheaper rates. CMSS has not restricted the supplier from transacting with the other dealers and the specific requirements are imposed only with respect to the products which are to be supplied to CMSS. Therefore, no provision of the Competition Act has been violated.
Tags : #CCI #Condom #Procurement #CMSS #Cupid #Ltd #MHA