10 May 2013

Parallel behavior of non-participation in bid is anti-competitive

The Competition Appellate Tribunal in a recent order has held that behaviour of the explosive manufacturers in boycotting the bid for supply to Coal India as anti-competitive but the deterrent punishment should not be so much as to affect their ability to deliver the goods in an efficient manner. The Tribunal hence reduced the penalty to 10% of the penalty imposed by Competition Commission of India (CCI).  


Existence of parallel behaviour 

The Tribunal said that it was not prepared to accept the plea that all the explosive manufacturers would refuse to quote price bids by way of a coincidence. It held that parallel behaviour of the manufacturers proved that the same was result of a concerted action amongst all of them and that all the appellants who formed a class of the explosive manufacturers, could not have taken individual decision, not to quote the price bid independently of each other. 


Proceedings against only some sustainable 

On the contention that only some of the opposite parties were proceeded against by the CCI, it was held that if out of 26 explosive manufacturers, the CCI chose to proceed against the 10 on the basis of the information against them put in by the CIL, there was nothing wrong in it, and hence there was no question of the Commission being selective in choosing the opposite parties.


CCI when not needs to reinvestigate matter  

The COMPAT also held that it is not that in every case where the CCI disagrees with the report of the DG, it has to proceed under Section 26(7) of the Competition Act to initiate further inquiry and that it is only if the CCI formulates an opinion on the basis of the report that the DG has either not done full investigation or that further investigation is necessary, then it proceeds under Section 26(7). It was noted that once the report comes under Section 26(3) and has exonerated the parties of the violation of the Competition Act, Section 26(5) gets activated and CCI has a full discretion to pass an order under Section 26(6). It was, therefore, held that the CCI was justified in writing its separate finding, independent of the DG's report and the findings therein.  


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