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2013 (5) TMI 296 - Commission - Companies LawAbuse of dominance – Determination of relevant market - Contravention of provisions of sections 3 and 4 of the Act - The informant pleaded the following three types of agreements were in contravention of the provisions of the Act: (a) Voluntary non-exclusive agreements entered into by the OP directly with Indian Pharmaceutical companies since 2006 for production and distribution of TDF and FTC medicines and their combinations. (b) Licence agreement of the OP with MPP which allowed MPP to have sub-licences with Indian pharmaceutical companies. (c) The sub-license tripartite agreement among the OP, MPP and the Indian pharmaceutical companies. (all three agreements collectively referred to as 'license agreements'. Held that:- OP first entered into the voluntary license agreement LA-2006 with the Indian pharmaceutical companies and allowed them to manufacture and sell the drugs as per terms and conditions of the agreement. However, it was not clear whether LA-2006 was still effective or continued to have any continuing effect post 20.05.2009 as the substantive provisions of the Act came into force on this date, whereas LA-2006 was signed prior in time. Therefore, the agreement between the OP and the Indian pharmaceutical companies could not be examined for the agreement was entered into much prior to the enforcement of the provisions of the Act. The second agreement was between the OP and MPP i.e. LA-2011 which allowed MPP to sub-license the manufacture and sale of the drugs to Indian pharmaceutical companies. This agreement will not fall within the ambit of section 3(4) of the Act since MPP is nowhere in the production chain. The last agreement i.e. the tripartite agreement falls within the contours of section 3(4) of the Act vis-à-vis the OP and the Indian pharmaceutical companies who are placed in different stages of the production chain and therefore, appreciable adverse effect on competition needs to be examined keeping in view the factors in section 19(3) of the Act. The explanation to section 4 of the Act defines dominant position to mean a position of strength enjoyed by an enterprise in the relevant market in India which enables it to operate independent of competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour. On examining the dominant position of the OP, it was seen that the OP had no legal existence in India and did not engage in any business in India. Accordingly, the OP was not a dominant player in the relevant market in India and therefore, no abuse as envisaged under section 4 of the Act could exist. In the light of aforesaid discussion, the Commission finds that no prima facie case was made out against the opposite party u/s 3 or 4 of the Act for referring the matter to DG for investigation. It was a fit case for closure under section 26(2) of the Act.
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