Competition watchdog to penalise tyre makers in cartel

CCI to penalise tyre makers in cartel The Competition Commission of India (CCI) will be imposing stiff penalty to tyre manufacturers involved in cartel. The body will be charging thrice the profit of the ‘erring’ company in cartelisation case.

The order has been issued following CII’s previous announcement that it has found evidences of cartel practices in the industry.

“The CCI has completed the hearing on tyre companies and order to this effect will be issued shortly. The Commission is modelling itself on the lines of the European Competition Commission, which has strict punitive actions against companies found guilty of violating competitive trade practices,” sources said.

The report regarding the issue has already been submitted by the Director-General of the Commission who also acts as the investigating arm of the commission.

“Major tyre manufacturers control as much as 95% of the trade and are a strong lobby. The Commission wants to send a strong message that the coordinated pricing behaviour is against fair trade and will elicit strict cohesive action. Such controlling tactics are detrimental to the consumers in particular and economy in general,” they said.

Meanwhile, sources from the tyre industry said this kind of penalty can be detrimental to them.

Rajiv Budhraka , Director-General of the Automotive Tyre Manufacturers Association (ATMA) said the association is denying the charges and any penalty can only burden the tyre industry further, considering that it is already suffering from the slow-moving growth and demand.

Currently, the competition body is putting out a TV ad against cartelisation in a bid to inform the public on its perils and how to discourage the practice.(RJA)