In a major development, the Competition Commission of India (CCI) has imposed hefty fines on the five major Indian tyre makers: Apollo Tyres Ltd., MRF Ltd., CEAT Ltd., JK Tyre and Industries Ltd. and Birla Tyres Ltd. They also fined their association i.e. Automotive Tyre Manufacturers Association (ATMA).
According to CCI, these tyre makers have breached Section 3(3) (a) and 3(3) (b) read with Section 3(1) of the Competition Act, 2002 (‘the Act’). They were indulged in cartelisation by acting in concert to increase the prices of cross-ply/bias tyres as well as controlling the production and supply in that market.
The commission informed last week that the aforementioned tyre makers have exchanged price-related data with each other through the ATMA platform. By doing this, they took collective decisions on the prices of tyres.
It is learnt that this case was started on the basis of a reference received from the Ministry of Corporate Affairs (MCA) under Section 19(1) (b) of the Act. The reference in question was based on a representation made by the All India Tyre Dealers Federation (AITDF) to the MCA. After doing their checking and establishing the breach of the act, 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, during 2011-2012.
Accordingly, the CCI has imposed the following penalties on the involved tyre makers:
INR 425.53 crore on Apollo Tyres
INR 622.09 crore on MRF Ltd
INR 252.16 crore on CEAT Ltd
INR 309.95 crore on JK Tyre
INR 178.33 crore on Birla Tyres
In addition to this, a penalty of INR 0.084 crore was also imposed on ATMA.