Mr. Dushyant (‘Informant’) filed an information under Section 19(1)(a) of the Act alleging contravention of the provisions of Sections 3 and 4 of the Act by National Accreditation Board for Testing and Calibration Laboratories (‘NABL’) and various other government affiliates bodies / public sector undertakings (all collectively identified as opposite parties (‘OPs’) along with NABL).^[1]

NABL (which is an accreditation body) was alleged by the Informant to form various exclusive supply agreements with OPs, as a result of which all suppliers to the OPs are mandatorily required to obtain testing or accreditation services from NABL/labs accredited by NABL. Such conduct is allegedly in violation of Section 3(4)(b) of the Act. According to the Informant, this exclusivity arrangement has also allegedly resulted in monopolisation of NABL’s services at the detriment of other accreditation bodies and organisations and is argued to be in contravention of Sections 4(2)(a) and 4(2)(c) of the Act.

CCI noted that no evidence was furnished by the Informant indicating the existence of an agreement by NABL with the OPs in relation to the alleged exclusivity arrangement. CCI perused the tenders / notices issued by the OPs and noted that these terms and conditions (mandating accreditation by NABL) appeared to have been framed directly by the OPs without any agreement with NABL. Accordingly, CCI did not come to any prima facie contravention of Section 3(4) of the Act by any of the OPs.

Relying on its decisional practice, CCI noted that each procurer availing such accreditation services must be given the freedom to exercise its choice freely in the procurement of goods/services. Therefore, while exercising their choice, OPs remain free to stipulate standards for procurement, and the same cannot be held to be outrightly anti-competitive. CCI has clarified that its scrutiny would be limited to those cases when such a procurer is a dominant player in its sphere of economic activity and whose unilateral conduct has the ability to distort competition in the supply side of such market. In the present case, there was no evidence that suggested that NABL had any role in framing. CCI also noted that there was no evidence to suggest that procurers other than OPs are also imposing similar conditions as the OPs. Accordingly, there was no real foreclosure for NABL’s competitors. As a result, CCI did not find any sufficient material to form a prima facie view in this matter and accordingly passed a closure order under Section 26(2) of the Act.

[1] Dushyant v. National Accreditation Board for Testing and Calibration Laboratories and Ors., Case No. 48 of 2021, Order dated February 24, 2022.