Allegations of anti-competitive conduct against Power Grid Corporation of India Ltd., dismissed

Competition Commission of India: While observing that every consumer/procurer must have freedom to exercise their choice freely in the procurement of goods and services, CIC dismissed charges against Power Grid Corporation alleging that the Corporation abused its dominant position with the policy that materials used in construction of transmission lines should be tested at NABL- approved laboratories. “Such choice is sacrosanct in a market economy as the consumers are in the best position to evaluate what meets their requirements and provides them competitive advantage in provision of their services. While exercising such choice, they may stipulate standards for procurement which meets their requirement and the same as such cannot be held as anti-competitive,” Commission noted.

Earlier, Informant who runs an engineering testing laboratory approached CCI alleging that by insisting testing through NABL accredited labs, Power Grid Corporation has put the laboratory of the Informant and other accreditation bodies out of competition. After perusal of material on record, CCI observed that Power Grid Corporation is an indirect procurer in the market for laboratory services for testing construction materials in India and it cannot be considered as the lone consumers of laboratory services for testing of construction materials in India as the overall consumer base of testing laboratories in India is very wide and testing undertaken for Power Grid Corporation by its contractors would be relatively marginal. Thus, Power Grid Corporation does not enjoy dominant position in the relevant market.

The Commission further noted that although the Informant has alleged the impugned conduct as anti-competitive and contravention of the provisions of Section 4 of the Competition Act, no fact or figure has been provided to demonstrate the purported dominance of Power Grid Corporation in any relevant market. While concluding the judgment, CCI observed that Power Grid Corporation, being a public sector undertaking, has the responsibility to ensure that the civil works undertaken by its contractors adhere to the quality stipulations and facilitate the development of a robust power transmission infrastructure across India. Testing by third party laboratories is mandated by Power Grid Corporation to instill confidence amongst national and international customers. “It is usual for many Government and International organisations to recognise the accreditation framework under the umbrella of ILAC and APLAC. Further, in addition to the labs accredited by NABL, the guidelines issued by OP also recognise Government Labs, Government College and Government Polytechnic, meeting the requirements prescribed therein. Seen in this background, the Commission does not find any unfairness or arbitrariness in the impugned conduct of OP,” added the Commission while closing the matter. [Prem Prakash v. Power Grid Corporation of India Ltd., 2016 SCC OnLine CCI 57, decided on September 21, 2016]

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