CCI fines five tyre-makers `1,788 cr for cartelisation
The Competition Commission of India has imposed a penalty of Rs 1,788 crore on five tyre companies, including Apollo, MRF, Ceat, JK and Birla, for indulging in cartelisation. The Automotive Tyre Manufacturers Association (Atma) also will have to pay a small penalty.
The commission imposed penalties of Rs 425.53 crore on Apollo Tyres, Rs 622.09 crore on MRF, Rs 252.16 crore on Ceat, Rs 309.95 crore on JK Tyre and Rs 178.33 crore on Birla Tyres, besides passing a cease and desist order. In addition, a penalty of Rs. 8.4 lakh was also imposed on Atma.
The case was taken up after the Ministry of Corporate Affairs made a reference to the CCI on receiving a complaint from the All-India Tyre Dealers Federation (AITDF) against the companies for acting in concert to increase the prices of cross ply/bias tyre variants sold by each of them in the replacement market and to limit and control production and supply in the market in 2011-12.
The commission had found that the tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, the Atma, and had taken collective decisions on the prices of tyres. It also found that Atma collected and compiled information relating to company-wise and segment-wise data (both monthly and cumulative) on production, domestic sales and export of tyres on a real-time basis. According to the CCI, the sharing of such sensitive information made the coordination easier amongst the tyre manufacturers.
Accordingly, the Commission held the five tyre manufacturers and Atma guilty of contravention of the provisions of Section 3 of the Act, which prohibits anti-competitive agreements including cartels.
The CCI had passed a final order on August 31, 2018 against the tyre companies and Atma for indulging in cartelisation.
The order of the commission had been kept in a sealed cover as per the directions of the Madras High Court on an appeal filed by MRF. The division bench of the Madras High Court on January 6, 2022 dismissed the writ appeal.
Aggrieved with this, the tyre companies filed a special leave petition before the Supreme Court, which were dismissed on January 28.
The Atma has also been directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise. Further, certain individuals of the tyre companies and the Atma were held liable for the anticompetitive conduct of their respective companies/association in terms of the provisions of Section 48 of the Act.