Covid-19 has left an indelible mark on the year 2020. Ithas impacted the business sector in a gigantic way all around the world. In this appalling pandemic situation, business factors should be well aware of certain challenges and opportunities that competition law presents. Businesses dealing in non-essential goods and services that are suffering from major losses due to shriveled market and plummeteddem and resulting in loss of revenue are facing tough times. Whereas other companies selling essential goods and services particularly medicines such as remdesivir, tocilizumab, favipiravir etc. are attempting to capitalize on the market in this situation by increasing pricing.  Meanwhile coordination between the market players or the competitors is throwing light on their behavioral tactics by the way of collaboration with each other or through concerted practices and imposing unfair prices or conditions to overcome the negative impact on their business.Certain agreements between the competitors have made an adverse effect on the society. This directly connects to section 3 of the Competition Act, 2002 which talks about the Anti-competitive agreements.

Oxygen is the most imperative component for the treatment of patients whose lungs are profusely affected by the novel Corona-virus. Recently in this medical crisis, there is a huge shortage of oxygen supply and in this critical time, the cost of oxygen has escalated from Rs. 8.5 per cubic meter to Rs. 25 cubic meter where the suppliers have imposed a 25% premium charge on oxygen cylinders. A sudden increase in the price of oxygen has generated several problems in the healthcare sector. In the normal scenario, a patient requires 1 liter of oxygen per minute whereas patients with severe symptoms require 15-20 liters of oxygen per minute. Earlier the circumstances were different, the usage of oxygen ratio in industries to hospitals was 60:40 and now it has changed to 20:80.

Vaccine is the last ray of hope that people look forward to in order to see a paradigm shift from the current trends.Globally, the pharmaceutical companies are running in a trailblazing race for being the first one to reach the finish line which is successful invention of vaccine to fight the malady. Alluding to the fact that the prices of the vaccine will skyrocket at the behest of the company who first develops it, the government is well within its powers to put a ceiling to the price of the vaccine in public interest under the Drugs Price Control Order. Under Section 3 of the Essential Commodities Act, the Centre has the power to control the production, supply and distribution of vaccines with the responsibility of equal distribution, and availability of fair prices. Taking these measures will help in preventing the abuse of dominant position in the market and thereby securing the Covid entrapped consumers from a deeper harm to their pockets. Simultaneously, on the same line, medical oxygen must also be brought under the ambit of Essential Commodities Act in all the states. With the months passing by and the number of positive cases surging, a lot of hoarding and black marketing of oxygen cylinders has been observed. At the time when there is dire need of oxygen cylinders in the hospitals treating Covid patients, cases of unreasonable and insane price rise and fictitiously created dearth have come forward. Cognizance of such incidents need to be taken under the competition regime at the earliest to pull the plug on these illicit activities.

Hoarding done by some anti-competitive practitioners coupled with frantic purchases done by the upper class has led to shortages in several essential products. These shortages have a direct impact on the behavior of market flow which lead to potentially exploitative prices in some cases. Distinguishing between legitimate and illegitimate price fluctuation creates a substantial challenge for the competitors. As such ripping off consumers by hefting up prices in the middle of a pandemic or public emergency is against the law.

Keeping in mind the spike in demands of medical oxygen and the inability of the manufacturers to fully cater to the needs of the hospitals, combinations or collaborations of major players internally or with other minor players must be sanctioned by the authorities under the competition law. This practice need not be perpetuated but transiently put in place until there is sufficient supply of oxygen cylinders across the nation. After normalcy is reinstated, these exemptions may be rescinded. This will help in ramping up the production and supply process and the resources will be jointly materialized effectively for the consumers’ betterment. The onus lies on these companies to emphasize on boosting supplies to meet with the requirements rather than indulging in malpractices and generating revenues. The cooperation and coordination amongst the collaborators must not be at the cost of consumers’ benefits and must be under constant vigilance of Competition Commission of India (CCI). Any and all kinds of decisions by the companies must be taken under the guidance of erudite legal counsels and in congruity with the Competition Act, 2002.


Forum Parekh


 Dhruv Oza

Disclaimer: The author bears sole responsibility for the accuracy of facts, opinions or view stated in the present blog.

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