The Competition commission of India has passed a path breaking order against Dr. Hiranandani Hospital in the case relating to abuse of dominant position under section 27 of the competition act, 2002. The facts of the case are that a lady was registered with Dr. Hiranandani Super Speciality Hospital for delivery of her second child and at the same time she had made arrangements with Life Cell India Private Limited for banking of her stem cells. The Hospital had made an exclusive arrangement with Cryobanks International India and therefore refused to entertain the lady’s plea to allow Life Cell representatives to visit the hospital in order to collect the stem cells.
1) The hospital was found to be a dominant player in the relevant market of provision of maternity services.
2) Due to its dominance in the relevant market, the hospital was able to influence the consumers by imposing unfair conditions
3) The agreement between the Hospital and Cryo Banks was in violation of section 3(4) of the Competition Act, 2002 being an anti competitive agreement which had an appreciable adverse effect on competition.
The CCI passed an order, gist of which is as follows:
(a) The agreement of hospital with Cryobank for the years 2011-12 & 2012-13 are
declared null & void.
(b) The hospital shall not enter into a similar agreement with any stem cell bank in
This para 34 of the order clinches the issue completely
34. The plea advanced by the counsel is misconceived in as much as it is not the case of OP hospital that the patients were free to avail the services of any stem cell bank. The OP hospital’s only argument is that if a patient was not willing to take services of Cryobank, the patient was free to leave the hospital and avail maternity services of another hospital. In fact, this is not a mitigating factor rather it is another aggravating factor. The hospital knew the difficulty of a patient in leaving the hospital where the patient had all along been taking services of maternity consultant and had developed a bond with the consultant. In fact, most of such patients are afraid of going to another consultant and resign to the fate.
Order was passed for Rs.3.82 crores penalty. Since there are not many stem cell banks in India, I believe this is the first of its kind order of CCI in that category.
Copy of the CCI order can be found here http://www.cci.gov.in/May2011/OrderOfCommission/27/392012.pdf