1. Background and Profile of the parties

1.1 information under the provisions of section 19(1) (a) of the Competition Act, 2002 (Act) was filed on May 25, 2010 by Kapoor Glass India Private Limited (hereinafter Kapoor Glass or the informant) alleging certain anti-competitive Acts by Schott Glass India Private Limited (hereinafter Schott Glass India or the Opposite Party or the OP). The information brings out allegations of various anti-competitive practices by Schott Glass India in the market of ‘neutral USP-1 borosilicate glass tubes’ and ‘glass ampoules’ made out of such glass tubes in India.

1.2 Neutral USP-1 borosilicate glass tubes are made out of borosilicate glass, which is a special type of glass with unique properties. Due to its low thermal expansion co-efficient and high resistance to chemical reaction, borosilicate glass tubes are used to make glass ampoules, vials, cartridges, syringes which are primary packaging material for liquid injectables and drugs by the pharmaceutical industry. Pharmaceutical companies generally specify the standards or quality/source for borosilicate glass tubes which may be used to make glass tubes ampoules, since the molecules in liquid injectables tend to leach with the surface of the glass container in which they are stored over a period of time, which may result in a change in their chemical composition, in turn resulting in reduced potency. This may also result in discharge of alkali from the glass container into the medicinal solution which might pose significant safety related concerns for the patients being administered with the liquid drugs packed in such glass containers. Only such borosilicate glass tubes which conform to United States Pharmacopoeia-I standard and are neutral with alkali release of less than 1.0 ml are recommended. Borosilicate glass can either be amber or clear depending upon the drug it is being used for. Since certain drugs require very low exposure to light, these are packaged in amber borosilicate glass.

Profile of Schott Glass India Private Limited -The Opposite Party

1.3 Schott Glass India is a wholly owned subsidiary of Schott Glaswerke Beteiligungs - GmbH, Germany ("Schott GmbH"), which in turn, is a wholly owned subsidiary of Schott AG, Mainz, Germany. Schott AG is the ultimate parent company of the Schott Group. The Schott Group is owned by the Carl- Zeiss-Foundation, Germany.

1.4 Schott Glass India Pvt. Ltd., as a wholly owned subsidiary of Schott Glaswerke Beteiligungs GmbH, Germany (Schott Germany) is engaged in the production of ‘neutral USP-I borosilicate glass tubes’ in India used for the purposes of manufacturing ampoules, vials, cartridges and glass syringes (Containers) for the filling of liquid injectables. Schott Glass India was registered as a Private Limited Company in the State of Maharashtra, India in December 1997 and in January 1998, it acquired the assets of M/s Bharat Glass Tubes Ltd., one of the existing Indian producers of borosilicate glass tubes at that time. The Tubing Division of Schott Glass India is located in Jambusar, Gujarat and sales division in Mumbai. The tubing division of Schott Glass India is part of its group business unit ‘Pharma’. The ‘Pharma’ business unit of Schott Group consists of business segments; ‘Tubing’ which manufactures and sells borosilicate glass tubes for pharmaceutical and technical applications for pharmaceutical use, and; ‘pharmaceutical packaging’ which manufactures and sells containers made out of Type I glass tubes.

1.5 Schott Glass India manufactures two qualities of borosilicate glass tubes, i.e. (i) Fiolax, (in clear version) with alkali release of 0.38 ml of H₂SO₄0.02 N per 10g powered glass and (ii) the basic Neutral Glass Clear (NGC) and Neutral Glass Amber (NGA) with alkali release of 0.50 ml which fulfils the USP - Type I standards. NGC and NGA tubes are produced exclusively for Indian market, while Fiolax clear is produced for Indian market as well as for export.

1.6 In May 2008, Scho