The Competition Commission is investigating alleged unfair business practices by hospitals and stem cell banks that restrict parents from preserving a new born's stem cells at banks of their choice.

Stem cells can be differentiated into specialised biological cells and also have the ability to regenerate on its own. These cells, which can help in treating a variety of diseases, are generally taken from cord blood and bone marrow.

Sources said that Competition Commission of India (CCI) is looking into allegations of unfair market practices among hospitals and stem cell banks.

The Commission received a complaint alleging that some hospitals are not allowing parents to choose the bank to preserve their new born's stem cells, they added.

"Instead, they (parents) are asked to keep the stem cells at a particular bank with which the hospital has a tie-up. This practice is anti-competitive and restricts available choices," sources noted.

The Director General (DG), the Commission's investigative arm, is looking into the issue, they added. Among others, the fair trade regulator is probing the case under Section 3 of the Competition Act, that relates to anti-competitive pacts.

A new born's stem cells are preserved so that if necessary, these cells can be harvested to treat diseases in the future. They are taken soon after birth from the umbilical cord blood.

According to sources, India is a growing market for stem cells preservation and is currently estimated to be worth about Rs 500 to 600 crore.

The Commission, which has the mandate to keep a tab on unfair trade practices, refers cases to the DG only after finding prima facie evidence.