CCI Conducts Raids On Tyre Companies

The Competition Commission of India (CCI) recently in an alleged instance of competition law infractions in the country has raided the headquarters of tyre businesses including CEAT, Apollo Tyres, MRF (Madras Rubber Factory) and Continental Tyre. According to nearby sources the raids were carried out by officers of the Competition Commission of India (CCI) in different locations.

The spokespersons from Apollo, Continental and CEAT have refrained from answering any questions from the media outlets. All the emails, messages and calls have remained unanswered. According to one of the sources, the issue involves an antitrust investigation regarding the use of unfair trading practices and bid-rigging when selling tyres for public transportation vehicles in Haryana’s northern state.

Earlier in February this year, we reported that the Supreme Court of our nation dismissed a petition filed by these prominent tyre manufacturers of the country that challenged the regulator’s order imposing penalties totalling over ₹1,788 crores on them because of price manipulation as a cartel.

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According to the statement, the Competition Commission of India (CCI) announced on February 2, 2022 that in August of 2018, it fined Apollo Tyres, MRF, CEAT, Birla Tyres, JK Tyre & Industries, and Automotive Tyre Manufacturers Association a total of more than 1,788 crores (ATMA). “The tyre producers had shared price-sensitive data amongst themselves through the platform of their organisation, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres,” the sanctions were levied on these firms. During 2011-2012, the CCI inferred that the corporations had breached Section 3 of the Competition Act, which forbids anti-competitive agreements.

Apollo Tyres received a fine of Rs 425.53 crore, MRF Ltd received a fine of Rs 622.09 crore, CEAT Ltd received a fine of Rs 252.16 crore, JK Tyre received a fine of Rs 309.95 crore, and Birla Tyres received a fine of Rs 178.33 crore. A punishment of Rs 8.4 lakh was also levied on ATMA, and it was ordered to disengage and dissociate itself from collecting wholesale and retail prices through member tyre firms or otherwise, while several persons from these tyre companies and the ATMA were also detained for misbehaving.

In retaliation, the tyre producers an appeal in the Madras High Court which was rejected on the January 6th of this year, while “Aggrieved with the same, the tyre companies preferred SLPs (Special Leave Petitions) before the Hon’ble Supreme Court, which were dismissed vide its order dated 28.01.2022,” CCI said in the statement.

The Competition Commission of India further stated that the probe was started on the basis of a referral from the corporate affairs ministry. The ministry subsequently revealed that it had received a referral on the issue after the All India Tyre Dealers Federation made a representation (AITDF). Following further investigation by the CCI, it was discovered that the corporations and the association had engaged in cartelisation by cooperating to raise the prices of cross-ply/bias tyre variations sold in the replacement market by each of them, as well as to limit and control market production and supply.

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