Keeping up with Competition - July 2026
A monthly newsletter by Axiom5
Welcome to the latest edition of Keeping Up with Competition, where we discuss competition law developments from June 2026.
Last month, the Telangana High Court dismissed a writ challenge at an intermediate step in the CCI’s inquiry into the All India Organisation of Chemists & Druggists (AIOCD) and various pharmaceutical companies, paving the way for the CCI’s closure of the long-standing inquiry. The CCI’s closure order is the first published order under Section 26(9) of the Competition Act, 2002 (Act) since the statutory amendments in 2023. The CCI also found multiple truck unions guilty of bid rigging and initiated an inquiry to analyse labour market related issues from a competition lens.
We discuss these developments below.
1. Telangana High Court dismisses writ challenge by Dr. Reddy’s Laboratories stalling AIOCD inquiry (see here)
On 10 June, the Telangana High Court (Telangana HC) dismissed Dr. Reddy’s Laboratories’ writ petition objecting to the CCI’s direction seeking its response to the Director General’s (DG) investigation report.
The CCI’s inquiry involved allegations that AIOCD forced pharmaceutical manufacturers into Memorandums of Understanding (MoUs) that mandated No Objection Certificates (NOCs) or Letters of Cooperation (LOCs) for appointing stockists. The informant also alleged that regional chemist associations extorted mandatory Product Information Service (PIS) charges before companies could launch new drugs, enforcing these rules through coordinated boycotts, in violation of Section 3(3)(b) of the Act. We discuss the CCI’s order closing the inquiry below.
The CCI directed Dr. Reddy’s to respond to the DG’s investigation report, and submit its audited financial statements for penalty computation. Dr. Reddy’s filed a writ petition alleging violations of the principles of natural justice, including the alleged retrospective application of the CCI’s penalty guidelines to the inquiry, lack of access to the complaint and supporting materials as well as the delay in progressing the inquiry (after the Karnataka High Court vacated a 10 year stay in 2022).
The High Court dismissed these contentions.
On delay, it noted that the 60-day inquiry timeline prescribed in the General Regulations1 were merely directory and not mandatory. It also relied on Section 15 of the Act to support its conclusion that procedural irregularities such as a delay in submitting the DG’s report, do not vitiate CCI proceedings.
The Telangana HC also clarified that the CCI’s direction under Section 26(8) of the Act is not adjudicatory in nature, since it does not determine parties’ rights and liabilities. The High Court emphasised that entertaining a writ petition at that stage would amount to unwarranted interference with an ongoing statutory inquiry, and accordingly dismissed the writ petition.
2. CCI closes a decade-long inquiry into AIOCD and pharmaceutical companies (see here)
Not long after the Telangana High Court’s dismissal of Dr. Reddy’s writ challenge, the CCI closed its inquiry into the AIOCD, various regional chemist associations, and 22 pharmaceutical manufacturers. The inquiry was initiated in 2012, when the informant, the All India Chemists and Distributors Federation, filed information alleging violations of Section 3 and Section 4 of the Act.
As noted above, the inquiry related to restrictions imposed by pharmaceutical trade associations relating to the appointment of stockists and the introduction of new pharmaceutical products, mirroring several other previous inquiries conducted by the CCI. While the CCI has repeatedly penalised trade associations for imposing such restrictive conditions as being an anti-competitive quantity restriction under Section 3(3)(b) of the Act, it diverged from this approach in this case.
While the DG concluded that the associations and manufacturers contravened the Competition Act by actively implementing these practices, the CCI rejected these findings for evidentiary and factual reasons:
Historical compliance: The DG relied heavily on evidence from 2009 to 2012 to support its contravention findings. However, as a result of earlier CCI decisions, the AIOCD filed an affidavit of compliance in 2014, affirming that it has discontinued the anti-competitive practices, including the MoUs, mandatory NOCs and PIS charges. The DG failed to demonstrate any continuing contravention post-2014.
Independent commercial justifications: Pharmaceutical companies provided evidence demonstrating that they appointed stockists without demanding NOCs. Further, the DG had not examined any stockists to establish that the chemist associations actually enforced NOCs as a compulsory requirement. The pharmaceutical companies were also able to demonstrate that they paid PIS charges voluntarily to advertise and disseminate product information. This dispelled the finding that PIS charges were mandatory impositions. The CCI also noted that the DG had not sufficiently proved that the pharmaceutical companies engaged in coordinated boycotts.
Lack of manufacturer complicity: The CCI rejected the finding that pharmaceutical companies actively participated in an anti-competitive arrangement. Evidence indicated the companies made independent commercial decisions regarding trade margins and appointments, and at the most, acted as passive victims of prevailing trade practices rather than willing cartel members.
By holding the DG accountable for failing to interview actual market participants (like stockists) to corroborate documentary inferences, the CCI established a higher threshold for proving contraventions. The CCI also distinguished between active collusion and passive participation driven by industry mechanics, highlighting the importance of active documentation which demonstrates independent commercial decision-making on pricing and distribution. Interestingly, the CCI treated AIOCD’s compliance affidavit as a hard reset, shielding it from liability from historical conduct.
3. CCI finds truck owners’ associations guilty of cartelisation but defers penalty proceedings (see here)
On 9 June, the CCI found that 4 truck owners’ associations (OPs) in Odisha had engaged in anti-competitive price fixing and output restriction, violating Section 3(3)(a) and (b) of the Act.
The inquiry was initiated based on a complaint by the Indian Steel Association (ISA), alleging that the OPs colluded to fix and increase freight rates for trucks transporting raw materials to steel plants in specific districts in Odisha. The ISA also alleged that the OPs restricted independent truck owners from operating in these districts, by mandating registration and the payment of an entry fee. Finally, the ISA alleged that the OPs arbitrarily limited the quantity of freight transported by mandating the use of smaller trucks, and operating below state government mandated payload limits.
The CCI affirmed the DG’s findings:
Collusive price fixing - The OPs periodically and systematically colluded to fix and increase freight rates in violation of Section 3(3)(a), often at rates higher than the maximum prescribed by the State Transport Authority. The DG relied on documentary evidence, including rate charts and circulars issued by the OPs as well as admissions by their office bearers during DG depositions. The CCI rejected the OPs’ defence that they acted for the benefit of local truck owners and increased prices based on “real world” costs.
Output restriction - The OPs’ registration and entry fee mandate restricted the supply of transport services, in violation of Section 3(3)(b) of the Act. It specifically noted that the impact of extraneous factors (such as dispatch schedules at mines, among other things) did not negate the evidence that the OPs systematically restricted and controlled market entry by truck owners in their respective districts.
No evidence on payload restrictions - The DG did not find sufficient evidence to corroborate the third allegation, which was based on Jindal Steel having been refused the use of higher capacity trucks. The DG noted that this allegation was not corroborated by any third parties, nor supported by any documentary evidence. The CCI concurred with the DG on this issue.
Although the CCI found that the OPs and their office bearers contravened the Competition Act, it deferred penalty proceedings to a later date. This was because the OPs and individuals failed to submit their financial statements, despite the CCI providing multiple opportunities to do so. It decided to determine the penalty once the OPs and their individuals provided financial statements. The CCI’s order also records that the OPs did not file written submissions, and only presented oral arguments through counsel.
4. CCI initiates inquiry into restrictive conditions imposed by the Mrs. India pageant (see here)
The CCI initiated an inquiry based on a complaint received from a runner-up in the Mrs. India pageant, highlighting restrictive clauses in agreements with participants and winners imposed by the pageant organiser. These included bans from competing, judging, or mentoring in other pageants for five years, mandating financial contributions to a specific charity and a requirement to obtain the organiser’s written approval for all professional appearances and third-party contracts.
Defining a narrow market specifically for married women’s pageants as a pathway to international pageants, it found the organiser to hold absolute market dominance through exclusive licenses for specific international pageants. The CCI found on a preliminary basis that a five-year ban on joining other pageants limits professional mobility and service provision. Forcing contestants to support a specific social cause creates an illegal tie-in arrangement, linking unrelated obligations to the main contract. Additionally, the CCI considered that the restriction on a winner’s ability to sign external oral or written contracts was prima facie exploitative.
While the beauty pageant industry is niche, the CCI’s initiation order evaluated pageant contestants as service providers facing unfair employment-style restrictions, emphasising that companies operating in niche markets remain subject to competition scrutiny. Its order also marks one of the first instances of the CCI scrutinising non-competes and post-termination restrictions in employment contracts as a potential abuse of dominance under the Act.
Regulation 20 of the CCI (General) Regulations, 2009.