CCI Closes Abuse of Dominance Case Against Indraprastha Apollo Hospital, Finds DG's Pricing Analysis Unsustainable

The Competition Commission found the Director General's comparisons of hospital prices with hotel tariffs and standalone diagnostic labs methodologically flawed, closing the Section 4 case against Apollo Hospital after over a decade of proceedings.

The Competition Commission of India, in an order dated 21 May 2026, closed proceedings against Indraprastha Medical Corporation Ltd. (Indraprastha Apollo Hospital), New Delhi, finding no sustainable case of abuse of dominant position under Section 4 of the Competition Act, 2002. The Commission, comprising Chairperson Ms. Ravneet Kaur and Members Mr. Anil Agrawal, Ms. Sweta Kakkad, and Mr. Deepak Anurag, held that the Director General's supplementary investigation report failed to establish either limb of the excessive and unfair pricing test on any count. The case, originally filed in 2015 by informant Vivek Sharma against Becton Dickinson India and Max Super Specialty Hospital, had expanded through supplementary investigation to cover twelve private super-specialty hospitals in Delhi, with the present sub-case designated Case No. 77(10) of 2015 and assigned exclusively to Apollo Hospital.

How a Syringe Complaint Became a Twelve-Hospital Investigation

The original information, filed under Section 19(1)(a) of the Act, alleged that Becton Dickinson India (P) Ltd., a manufacturer of disposable syringes, colluded with Max Super Specialty Hospital, Patparganj, to print a higher Maximum Retail Price on syringes sold at the hospital's in-house pharmacy compared to the same product sold in the open market.

The Commission directed the Director General to investigate under Section 26(1) on 17 November 2015. The DG's initial investigation report, considered by the Commission in its order of 31 October 2017, found no exclusive agreement between Becton Dickinson and Max Patparganj and no contravention of Section 3(3). The Commission confirmed that finding in its order of 31 August 2018.

However, the Commission also noted in that same 2018 order that the DG had found Max Patparganj to be compelling in-patients to purchase products only from its in-house pharmacy and earning significant profit margins on syringes. The DG had flagged this conduct as akin to “aftermarket abuse” but had not analysed it in detail. The Commission directed a supplementary investigation under Regulation 20(6) of the erstwhile Competition Commission of India (General) Regulations, 2009.

The supplementary investigation, submitted in confidential version on 24 December 2021, covered twelve super-specialty hospitals in Delhi. The DG framed five issues: whether the hospitals were enterprises under Section 2(h); the relevant market; dominance; contravention of Section 4; and individual liability under Section 48. On each issue, the DG returned findings adverse to all twelve hospitals.

On 11 January 2022, the Commission deleted Becton Dickinson from the array of opposite parties, having found no contravention against it, and impleaded the eleven other hospitals alongside Max Patparganj. By order dated 22 of the present judgment, the Commission formally segregated Case No. 77 of 2015 into twelve sub-cases numbered 77(1) to 77(12), with Case No. 77(10) of 2015 assigned to Indraprastha Apollo Hospital.

What the DG Found Against Apollo Hospital

The DG defined the relevant product market as the “market for provision of healthcare services/facilities for in-patients admitted to Apollo Hospital in Delhi” and the relevant geographic market as Delhi. On that basis, the DG concluded that Apollo Hospital was dominant in its own relevant market, since no other hospital exercised any influence over its management or policies.

The DG then found contravention of Section 4 of the Act across five parameters for the period 2015 to 2018. On room rents, the DG compared Apollo's charges with those of nearby three-star and four-star hotels and concluded that Apollo charged more. On medical tests, the DG compared prices for thirteen routine tests with four diagnostic laboratories, Dr. Lal Path Labs, Goyal MRI, Focus Imaging, and House of Diagnostics, and found Apollo charged more for one or more tests at some point during the period. On medical devices, the DG examined stents, knee implants, hip implants, and imaging procedures. On consumables and medicines, the DG compared procurement prices with selling prices and found significant profit margins across twenty specific consumables, twenty top consumables by volume and value, nineteen specific medicines, and twenty top medicines.

The DG also identified several individuals of Apollo Hospital as liable under Section 48 of the Act.

Apollo Hospital's Case Before the Commission

Apollo Hospital, represented by Senior Advocate Shri Sajan Poovayya along with other counsel, challenged the DG's findings on multiple grounds in its objections, oral arguments, and written submissions.

On the relevant market, Apollo argued that the DG had failed to conduct the aftermarket analysis that the Commission had specifically directed in its 2018 order. Apollo contended that healthcare services constitute a single indivisible contract, a “cluster market” — where medicines, consumables, and procedures are jointly demanded and supplied, and cannot be unbundled into a primary and secondary market. It relied on the Shamsher Kataria case and on the Commission's own recognition of cluster markets in healthcare. Alternatively, Apollo argued that even if a primary and secondary market existed, the correct characterisation was a “systems market” where patients conduct whole-life cost analysis at the time of admission and Apollo provides cost estimates before admission.

On dominance, Apollo submitted that it does not operate independently of competitive forces, that patients have multiple hospital options and can switch without cost, and that it does not satisfy the dominance test under Section 19(4) of the Act. On geographic market, Apollo argued the correct market was at least the National Capital Region, not merely Delhi.

On the pricing analysis itself, Apollo challenged each of the DG's comparisons. Hotel room tariffs, it argued, fluctuate seasonally and cover leisure amenities, while hospital room rents cover nursing care, ICU backstopping, sterilisation protocols, biomedical waste management, and emergency readiness. Diagnostic centres, Apollo noted, operate for fixed hours, at higher volumes through collection centres, from smaller premises, and with lower fixed costs than hospital laboratories that invest in machinery and provide round-the-clock services. Apollo also pointed to its own financial evidence showing net losses on room rents between 2015 and 2018 and declining overall profit margins from 4.5% in FY 2015 to 2.8% in FY 2018.

Apollo further argued that the DG had not conducted any effects-based analysis, citing the Supreme Court's ruling in Competition Commission of India v. Schott Glass India Pvt. Ltd. & Anr. (Civil Appeal No. 5843 of 2014) that an effects-based analysis is an obligatory component of every inquiry under Section 4 of the Act. The DG, Apollo submitted, had not identified any consumer, competitor, or third party who had suffered harm.

How the Commission Reasoned

The Commission accepted that Apollo Hospital is an enterprise under Section 2(h) of the Act, being engaged in providing healthcare services in lieu of monetary consideration. It also accepted the DG's relevant market definition: “provision of healthcare services/facilities for in-patients admitted to Apollo Hospital in Delhi.”

On room rents, the Commission found the DG's comparison with three-star and four-star hotel tariffs to be an inappropriate benchmark. The Commission observed that hospital room rents cover nursing care, medical monitoring, and emergency infrastructure that hotels do not provide, and that the DG had not compared Apollo's room rents with those of other hospitals. The Commission held that the DG's finding of unfair room rents was not sustainable.

On medical tests, the Commission examined the DG's comparison of X-ray, MRI, and ultrasound charges with standalone diagnostic laboratories. For ultrasound tests, for instance, the data showed Apollo charging between 59% and 94% more than Dr. Lal Path Labs across the four years. The Commission acknowledged that higher charges at a hospital may be attributable to the cost of providing a 24-hour functional testing facility with available staff, infrastructure, and faster turnaround time. The Commission held that comparing Apollo's rates with only one standalone lab each was inadequate, and that charges would qualify as unfair only where significantly higher than those of other hospitals for comparable services. The DG had not made that comparison. The Commission therefore held the DG's finding on medical tests and imaging procedures unsustainable.

On consumables and medicines, the Commission found the DG's methodology of comparing procurement prices with selling prices to be inappropriate, since procurement prices do not account for overhead expenses including storage costs, supply chain management, operational costs, and inventory management. The Commission held that prices for consumables and medicines ought to have been compared with prices charged by other super-specialty hospitals or at least nearby pharmacies. The Commission also noted that there was no finding in the supplementary investigation report that Apollo had charged above the MRP fixed by manufacturers for any consumable or medicine, and that no law obliges a hospital to pass on procurement-side profits to patients. The sample size taken by the DG was also described as quite limited.

Applying the two-limb test from United Brands Company v. Commission, whether the difference between cost incurred and price charged is excessive, and whether the price is unfair in itself or compared to competing products, the Commission concluded that neither limb was established on any count from the evidence gathered in the supplementary investigation.

Order

The Commission held that no case of abuse of dominant position in contravention of Section 4 of the Act is made out against Indraprastha Medical Corporation Ltd. (Indraprastha Apollo Hospital) on the material and evidence available on record. The matter was directed to be closed. All pending interlocutory applications, if any, were disposed of.

The Commission also granted confidentiality to documents, data, and information filed by the opposite party under Regulation 35 of the General Regulations, 2009 (as amended), in terms of Regulation 36 of the General Regulations 2024, read with Section 57 of the Act, for a period of three years from the date of the order. The Commission clarified that nothing disclosed in the order itself is to be treated as confidential, having been used and disclosed for the purposes of the Act.

The Secretary was directed to communicate a certified copy of the order to the opposite party.