Siemen’s policy to share passwords of MRI and CT Scan machines after payments of fees isn’t anti-competitive: CCI

Case Details: Star Imaging and Path Lab (P.) Ltd. v. Siemens Ltd. - [2021] 131 taxmann.com 284 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member

Facts of the Case

In this significant ruling, the CCI held that the Siemen’s policy to share passwords of MRI and CT Scan machines after payments of fees isn’t anti-competitive.

The informants were engaged in the business of providing diagnostics and pathology lab services to patients in Delhi/NCR. The informants were a customer of the OP. Informants purchased CT Machine and MRI Machine, machines from the OP.

The Informants alleged that OP compelled them to take Comprehensive Maintenance Contract (CMC) by resorting to various means like overcharging for spare parts, not sharing passwords/encryption codes, etc., which were alleged to be in contravention of the provisions of the Act. They also alleged that OP forced the informants to sign on the dotted lines of the one-sided CMC agreement (in favour of OP) without any negotiations or alterations.

The informants had alleged that machines were protected by an encryption code, i.e., a password, which the OP did not share with informants. Hence the informants were unable to get the machine serviced from outside.

The informants also submitted that for a small item like a 10-meter optic fiber cable, of which the OP was not even the manufacturer, OP demanded One lakh ten thousand while the cable was available in the market for a maximum of Rs. 4,000 to 5,000. Informants had inquired several times as to why OP was charging an excessive price for the 10 metre optic fibre cable, for which informants never received a satisfactory response. Informants stated that they were not able to procure this optic fibre cable from the market because, in order to replace it, they required service passwords, which only OP could provide and which it didn’t.

CCI Held

On the aspect of dominance, the CCI noted that there were big players like GE, Philips having a strong presence in the market of MRI and CT scan machines and thus, OP was not in a dominant position.

With respect to the allegation of abuse of dominance, the CCI noted that OP used to provide passwords against payment of fee, however, informants did not take any steps to obtain same. Further, informants had not brought out any evidence to show that OP created any hurdles even upon the due willingness of the informant for obtaining such passwords after payment of fees.

The CCI held that no prima facie case of contravention of provisions of section 4 was made out against OP and, directed to close the information.

List of Cases Referred to

• • House of Diagnostics LLP v. Esaote S.P.A. [Case No. 9 of 2016] (para 32)
  • Shamsher Kataria v. Honda Siel Cars [Case No. 3 of 2011] (para 35)
  • Amitabh v. Kent RO Systems [Case No. 100 of 2014, dated 26-2-2015] (para 35)
  • Magnus Graphics v. Nilpeter India (P.) Ltd. [Case No. 65 of 2013] (para 37)
  • Schott Glass India (P.) Ltd. v. CCI [2014] 45 taxmann.com 157/126 SCL 330 (CAT) (para 49)
  • Esys Information Technologies (P.) Ltd. v. Intel Corpn. (Intel Inc.) [2014] 42 taxmann.com 466/[2015] 129 SCL 99 (CCI) (para 49)
  • Sonam Sharma v. Apple Inc. USA [2013] 32 taxmann.com 201/119 SCL 107 (CCI) (para 55).