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SCHOTT India acquitted of anti-competitive conduct

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The Competition Appellate Tribunal (CAT) has cleared SCHOTT India from all penalties and charges made under an Order of the Competition Commission of India (CCI) that had been initiated by Kapoor Glass. SCHOTT India was falsely accused of abusing its strong position in the glass tubes market and granting discriminatory pricing and other favourable terms to its affiliated entity, SCHOTT KAISHA as compared to other converters in the market.

In July 2010, Kapoor Glass (Kapoor), a converter and former manufacturer of glass tubes, filed information with the CCI in which it complained of alleged anti-competitive practices of SCHOTT India which affected the competition in the market for Neutral USP Type I Borosilicate Glass Tubes as well as in the downstream market for the Containers. After the CCI initially decided against SCHOTT India, the case was referred to CAT.

In the CAT judgement, it was pointed out that SCHOTT KAISHA was a vertically integrated subsidiary of the SCHOTT Group and that the quantity purchased by SCHOTT KAISHA by far exceeded the purchases of any other converter company. Better terms for SCHOTT KAISHA were therefore justified. The tribunal also clarified that there was no negative impact on the downstream market for glass tube containers and that the ultimate consumer did not suffer any damage as alleged in Kapoor’s appeal.

The judges refuted CCI’s argument that favourable prices of SCHOTT India for SCHOTT KAISHA had resulted in reduced profit margins for the other converters and deprived them of their chance to grow. In addition, they rejected the allegations by Kapoor that SCHOTT’s Standard Trademark License Agreement was unfair and restrictive to the detriment of other converters.

Finally, CAT clearly denied any obligation of SCHOTT India to make deliveries to Kapoor, which had been stopped in 2008. The special Tribunal established that Kapoor had once forged SCHOTT India’s labels and thus committed a clear and unabashed breach of trademarks. It condemned such act of forging as the relevant products had a direct relation with human lives and serious consequences could ensue on account of usage of inferior quality of glass tubes. The Tribunal stated that it could not imagine the seriousness of the consequences if Kapoor could pass off inferior quality glass with the help of such faked labels.

EP News BureauMumbai

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