Introduction
In May 2026, the Competition Commission of India (CCI) concluded a long-standing case involving 12 super-specialty hospitals in Delhi, concerning allegations of unfair practices and excessive pricing. The CCI’s decision to dismiss the case due to flawed investigation methods by the Director General (DG) sparked significant debate and scrutiny.
The Investigation: Key Findings
The Director General’s investigation uncovered several issues. It highlighted that once patients are admitted, they have limited choices but to utilize hospital services such as room rents, medical tests, devices, and medicines, effectively making them captive consumers. The DG also pointed out excessive pricing, comparing hospital room rents to hotel tariffs, medical tests to standalone diagnostic labs, and consumables’ procurement prices to their selling prices within hospitals.
CCI’s Ruling: A Different Perspective
The CCI refuted the claim that patients are locked in, stating that those seeking elective treatments receive cost estimates beforehand and can switch hospitals without significant costs. However, it acknowledged that a case for aftermarket issues could exist in specific elective treatment scenarios, such as post-surgical stays.
Regarding pricing comparisons, the CCI criticized the DG’s methodology. It argued that comparing hospital room rents to hotel tariffs was inappropriate, suggesting a comparison with other hospitals instead. Similarly, the Commission found the comparison of medical test rates with standalone labs unsuitable, as prices should be evaluated against those charged by other hospitals offering similar services. The CCI also noted the error in comparing consumable prices with procurement costs, emphasizing the need to factor in overhead expenses.
The Necessity of Data Accuracy
The CCI’s emphasis on correct data and methodology echoes Sherlock Holmes’ adage, “I can’t make bricks without clay.” This raises pertinent questions regarding the CCI’s role in overseeing investigations and whether it should have intervened earlier or remanded the case for further investigation.
Oversight in Investigation Processes
Effective communication between the DG’s team and CCI officials could have prevented the current situation. Discussing methodologies beforehand might have ensured proper data collection. However, this raises concerns about maintaining institutional fairness, as the adjudicator should remain impartial. Historically, the DG was appointed by the Central Government, but the 2023 amendment to the Competition Act transferred this power to the CCI, aligning with practices in the European Commission and other regulatory bodies.
Reconsidering Case Closure
Instead of closing the case, the CCI could have remanded it for further investigation, as it has done in past cases involving HP, JK, and CEAT for bid rigging. Given the critical role of hospitals in healthcare, a more thorough investigation could have provided a definitive resolution. If further inquiries reveal no excessive pricing, the CCI would be justified in its findings, rather than citing insufficient data.
Conclusion
The CCI’s decision not to pursue further investigation in the hospital case contrasts with its approach in other sectors, such as the tyre industry. A more comprehensive assessment, with accurate data, would strengthen its position and ensure fair competition practices. As Holmes would say, the pursuit of truth requires relentless probing until the facts are uncovered.
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About the Authors: Abdullah Hussain is a Partner, and Ishan Handa is a Senior Associate at DSK Legal.
Disclaimer: The views expressed in this article are the authors’ own and do not necessarily reflect those of Bar & Bench.
