Rs 64 crore penalty imposed upon GlaxoSmithKline Pharmaceuticals and Sanofi Pasteur India by CCI, set aside

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Competition Appellate Tribunal (COMPAT): While declaring the fine of about Rs 64 crore imposed upon GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India by CCI as “legally unsustainable”, the Competition Appellate Tribunal set aside the order of CCI imposing the penalties.

Earlier in June 2015, CCI imposed a total fine of about Rs 64 crore on GlaxoSmithKline Pharmaceuticals Ltd. and Sanofi Pasteur India for alleged collusive bidding in supply of a meningitis vaccine to the government for Hajj pilgrims and subsequently plotting to charge higher prices in the government tender for the said vaccine. The matter relates to supply of polysaccharide Quadrivalent Meningococcal Meningitis (QMMV).

After perusal of material on record, COMPAT observed, “There is no evidence direct or indirect of any meeting between the two appellants, the bids given by them were not identical inasmuch as the quantity quoted by GSK was 1,00,000 doses and the quantity quoted by Sanofi was only 90,000 doses. While giving an additional reason to quash the penalties, COMPAT observed, “Even if we were to assume that the Commission had taken a deliberate decision to impose penalty at three per cent of the turnover of the appellants based on the financial statements filed by them, the same is legally unsustainable because the Commission has taken into consideration the entire turnover of the appellants of which QMMV is a miniscule fraction.” “We hold that the finding recorded by the Commission that the appellants are guilty of collusive conduct and violated Section 3(3)(d) read with Section 3(1) of the Act is legally unsustainable and the impugned order is liable to be set aside in toto,” noted the Tribunal.  [GlaxoSmithKline Pharmaceuticals Ltd. v. Competition Commission of India, 2016 SCC OnLine Comp AT 400, decided on November 8, 2016]

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