Competition Commission Closes Case Against 12 Hospitals, Rejects Enforcement Directorate's Investigation Findings

Competition Commission Closes Ten-Year-Old Case Against 12 Hospitals

The Competition Commission of India (CCI) has closed a decade-long case against 12 hospitals in the national capital, citing a lack of evidence of abuse of dominance. The decision was made after examining the investigation and supplementary investigation reports submitted by the Director General (DG).

The case, which was initiated in November 2015, was closed despite the DG's findings of violations of competition norms. Typically, cases with prima facie evidence of anti-competitive practices are referred to the DG for detailed probes. The CCI's decision to close the case is unusual, given the extensive investigations conducted by the DG.

The 12 hospitals involved in the case are Max Super Specialty Hospital, Patparganj, Max Smart Super Specialty Hospital, Saket, and Max Super Specialty Hospital, Shalimar Bagh, among others. The list of hospitals also includes BLK Max Super Specialty Hospital, New Delhi; Max Multi Specialty Centre, Panchsheel Park; Max Multi Specialty Centre, Pitampura; Fortis Flt. Lt. Rajan Dhall Hospital, Vasant Kunj; Fortis Escorts Institute and Research Centre Ltd, New Delhi; Sir Ganga Ram Hospital, New Delhi; Indraprastha Medical Corporation Ltd. (Indraprastha Apollo Hospital); St. Stephen's Hospital Delhi; and Batra Hospital & Medical Research Centre of Ch. Aishi Ram Batra Public Charitable Trust, New Delhi.

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The CCI's decision was based on the DG's supplementary investigation reports, which were submitted in September 2024. The watchdog found that the DG failed to apply the legal standards as laid down in the United Brands (Supra) case, which is a two-stage test for determining whether a price charged by a dominant enterprise is abusive.

The CCI noted that the DG's findings of contravention were based solely on the observation that the hospitals charged higher prices and had significant profit margins, without applying the legal standard governing excessive pricing. The regulator emphasized that under Section 4 of the Competition Act, it is not enough to show that a price is excessive; it must also be proven that the price is unfair.