Laws and sections by number or title, due dates, pages, and updates.
The Competition Commission of India closes an information case against multiple central and state authorities regarding the mandating of National Accreditation Board for Testing and Calibration Laboratories accreditation in tenders. The Informant alleges that the opposite parties violate sections 3(4) and 4 of the Competition Act by creating anti-competitive conditions and entry barriers favoring a single accreditation body. The Commission finds no evidence of an agreement between the opposite parties and the accreditation body. The Commission notes that the market for testing services is broader than asserted and does not establish dominance or market foreclosure. The matter is closed without an investigation.
Key dates
Who is affected
If you do not comply
Ask about this competition order
[Image omitted. See the official document.]
[Image omitted. See the official document.]
In Re:
Prem Prakash
Proprietor, Venus Testing and Research Laboratory,
Industrial Area, Khurai Road, Bina,
Distt. Sagar, Madhya Pradesh-470113.
Informant
And
Director General, CPWD, Headquarter, A-Wing, Nirman
Bhawan, Maulana Azad Marg, New Delhi-110011.
Opposite Party No. 1
Managing Director, National Capital Region Transport
Corporation, Gati Shakti Bhawan, INA, New Delhi-110023.
Opposite Party No. 2
Engineer Member, Delhi Development Authority,
Vikas Sadan, INA, New Delhi -110023.
Opposite Party No. 3
Chief Engineer, Public Health Engineering Department,
Government of Madhya Pradesh, Jal Bhawan, Banganga,
Bhopal -462003.
Opposite Party No. 4
Engineer in Chief, Water Resources Department,
Government of Madhya Pradesh, Jal Bhawan, Tulsi Nagar,
Bhopal- 462003
Opposite Party No. 5
Chairperson, Madhya Pradesh Police Housing and
Infrastructure Development Corporation Ltd., Bhadbhada
Road, Bordi Kalan, Bhopal -462002.
Opposite Party No. 6
CORAM:
Ms. Ravneet Kaur
Chairperson
Ms. Sangeeta Verma
Member
Mr. Bhagwant Singh Bishnoi
Member
The present information has been filed by Mr. Prem Prakash (‘Informant’) under section 19(1) (a) of the Competition Act, 2002 (‘Act’) alleging contravention of the provisions of section 3(4) and section 4 of the Act by Director General, CPWD (OP-1); Managing Director, National Capital Region Transport Corporation (OP-2); Engineer Member, Delhi Development Authority (OP-3); Chief Engineer, Public Health Engineering Department, Government of Madhya Pradesh (OP-4); Engineer in Chief, Water Resources Department, Government of Madhya Pradesh (OP-5); and Chairperson, Madhya Pradesh Police Housing and Infrastructure Development Corporation Ltd. (OP-6) (OP-1 to OP-6) are collectively referred to as ‘OPs’).
The Informant is proprietor of Venus Testing and Research Laboratory located at Industrial Area, Khurai Road, Bina, Madhya Pradesh and is providing engineering material testing laboratory services. The Informant’s laboratory is stated to be ISO 17025:2017 accredited.
The Informant has submitted that International Organization for Standardization (ISO) is an independent, non-governmental international organization that develops voluntary, consensus-based, market relevant international standards that support innovation and provide solutions to global challenges. The Informant has also submitted that ISO standards are voluntary in India.
The issue involved in the present case is related to ISO/IEC 17025:2017 which is followed by engineering material testing laboratory. As per the information, ISO-17025:2017 allows laboratories to implement a sound quality system and demonstrate that they are technically competent and able to produce valid and reliable results.
The Informant submits that if a laboratory wishes accreditation to ISO 17025: 2005 standards for part or all of its testing and calibration activities it should select an accreditation body that operates in accordance with ISO/IEC 17011.
Further, it is submitted that there is no requirement mentioned nor are there any rules passed by Bureau of Indian Standards (BIS) or any authorised appropriate body which mandates accreditation from a single accreditation body or any single agency. However, the Informant has submitted that OPs through their circulars or through clauses in their Tender/ Expression of Interest prescribe to avail services for testing of materials through laboratories which are accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL). Informant has submitted that such conditions create an anti-competitive situation in favour of NABL. This is causing Appreciable Adverse Effect on Competition (AAEC) in the market as the conducts of OPs are directly creating an entry barrier for the new player. Further, existing player, if any, in the market would be forced to close their operations.
Based on the above and conclusion in earlier order of the Commission in Case No. 50 of 2014, the Informant has stated that each of the state/central authorities named as OPs in the present information falls within the definition of the term ‘enterprise’ under Section 2(h) of the Act. Further, it is stated that each of the enterprises are dominant in their respective relevant product which would be the work allocated to them and geographical markets would be their territorial jurisdiction.
The Informant has relied on previous order of the Commission in Case No. 50 of 2014 for defining relevant market and assessing dominance of OP-1 as the same entity was also arrayed as one of the OP in Case No. 50 of 2014. The relevant product market for OP-1 has been stated as “market for procurement of services of laboratories for testing materials used in the construction of roads and bridges, etc. in India.” The Informant further submits that dominance of OP-1 has already been adjudicated in Case No. 50 of 2014.
With respect to OP-2, the Informant has stated that the relevant market would be “market for procurement of services of laboratories for testing materials used in the implementation of Regional Rapid Transit System (RRTS) project across the National Capital Region (NCR).”
The Informant has further stated that NCRTC is dominant in the relevant market, for construction of RRTC as it is the only agency authorized to do so.
With respect to OP-3, the Informant has stated that the relevant geographical market would same as that of the territorial jurisdiction of DDA. Therefore, the relevant market for DDA would be “the market for procurement of services of laboratories for testing materials used in the development of Delhi.” Further, with respect to dominant position, the Informant has inter alia stated that no other player in the market is comparable to position of DDA in the overall development of Delhi.
With respect to OP-4, the Informant has stated that the relevant market would be “market for procurement of services of laboratories for testing materials used in the implementation of drinking water scheme in the state of Madhya Pradesh.” Further with respect to dominance of OP-4, it is submitted that OP-4 is the sole department which executes water supply scheme in the state of Madhya Pradesh. Hence the unique position of OP-4 makes it dominant enterprise in the relevant market.
With respect to OP-5, the Informant has stated that the relevant market would be “market for procurement of services of laboratories for testing materials used in the implementation of water resources projects for irrigation in the state of Madhya Pradesh.” As regards dominance, the Informant submits that it is in unique position by virtue of being the sole enterprise implementing the water resource projects for irrigation in Madhya Pradesh making it dominant in the relevant market.
With respect to OP-6, the Informant has stated that the relevant market would be “the market for procurement of services of laboratories for testing materials used in the construction of building for police station and houses for the police officials in Madhya Pradesh.”. Further, it is the only body responsible for building police stations and residential buildings for the police department in the state of Madhya Pradesh.
Informant has submitted that NABL and the OPs are at different level of production chain. Thus, the aforementioned conditions which allegedly favours only NABL violate provisions of Section 3(4) of the Act read with Section 3(1) of the Act.
Further, the Informant has submitted that the above conditions imposed by the aforesaid dominant enterprises in their respective relevant market are in clear violation of sections 4(2)(a)(i), 4(2)(b), 4(2)(c) of the Act.
