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The Competition Commission of India has imposed a penalty of Rs 5.66 crore on the Indian arm of German firm Schott Glass India for anti-competitive practices.
In a case which lasted nearly two years, the competition watchdog charged Schott with abusing its dominant market position on a complaint by Mumbai-based Kapoor Glass Ltd.
Kapoor Glass, a family-owned firm engaged in the business of glass ampoules and “neutral USP Type-I borosilicate glass tubes,” alleged that Schott Glass India Pvt Ltd abused its dominant position in the industry by imposing unfair and discriminatory conditions on the purchase of goods related to glass tubes in India, thereby violating the provisions of the Competition Act.
Glass ampoules are primary packaging materials for liquid injectables and drugs, and are used by the pharmaceutical industry. Borosilicate glass is a special type of glass used in making glass ampoules.
Kapoor Glass alleged that Schott India, through joint ventures and acquisitions, became a major player in the borosilicate glass tubes business in India. Schott India then drove out competitors, including Kapoor Glass, by selling borosilicate glass tubes at very low prices, it alleged. Schott India went on to not only control the prices of borosilicate glass tubes but also to give loyalty discounts to other ampoule manufacturers and even poach Kapoor Glass' employees, thereby bringing the latter's glass ampoules production to a halt, it was alleged
“The Commission decided to impose penalty on opposing party (Schott) for its act of distorting competition in the market. Taking into account anti-competitive effects arising out of its (Schott Glass's) conduct in the relevant market(s) in India. The Commission feels that end of justice would be met if penalty at a rate of 4 per cent on the average of three years turnover (Rs 5.66 crore) of the OP is imposed,” the Commission said.
Schott's average turnover for three years stood at Rs 141.46 crore.
The Commission passed a ‘cease and desist' order against the company asking it to stop the practice within three months. Additionally, it directed Schott to deposit the penalty amount within 60 days of receipt of this order.
Schott India could not be reached for comments.
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