The fairtrade regulator has also imposed a penalty on the Automotive Tyre Manufacturers Association (ATMA) for indulging in cartelisation by acting in concert to increase the prices of cross-ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the said market.
“The Commission noted that the tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association ATMA and had taken collective decisions on the prices of tyres,” said the regulator in its release on Wednesday.
The Commission observed 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. “Thus, the Commission noted that the sharing of such sensitive information made the coordination easier amongst the tyre manufacturers,” said the CCI.
The CCI has imposed a fine of Rs 425 crore on Apollo Tyres, Rs 622 crore on MRF Ltd and Rs 252 crore on CEAT Ltd. While JK Tyre and Birla Tyres have attracted penalties of Rs 309 crore and 178 crore respectively. The regulator has also imposed a penalty of 0.084 crore on the industry association ATMA.
“Detection and punishment of cartel is the top enforcement priority of the CCI for last decade. The order reinforces CCI’s strict approach towards cartelization,” said Vaibhav Choukse, Partner – Competition Law at JSA. “Given the significance nature of penalty, it is likely that the companies will challenge the CCI order before National Company Law Appellate Tribunal (NCLAT).”
According to the release, the order was originally passed by the regulator in 2018. However, it was kept in a sealed cover as per the direction of the Madras High Court in a petition filed by MRF Ltd. Later, the division bench of the High Court had dismissed the plea filed by the tyre maker and Subsequently, the matter reached the Supreme Court, which was later dismissed by the Apex Court on January 28, 2022.
Now, with the order, the CCI has also directed ATMA to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise.
