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Tyre cartelisation charges: CCI raids premises of CEAT, MRF and Apollo Tyres

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Tyre cartelisation charges: CCI raids premises of CEAT, MRF and Apollo Tyres

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The Competition Commission of India (CCI) conducted raids at the premises of tyre manufacturers, CEAT Limited, Madras Rubber Factory (MRF), and Apollo Tyres, competition violation and cartelisation, sources told CNBC-TV18.

The Competition Commission of India (CCI) conducted raids at the premises of domestic tyre manufacturers, CEAT Limited, Madras Rubber Factory (MRF), and Apollo Tyres, sources told CNBC-TV18 on Wednesday.

The raids were being conducted over alleged competition violation and cartelisation, they said.
The competition regulator searched CEAT headquarters in Mumbai, MRF in Chennai, and Apollo Tyres in Gurugram. Prominent dealers of the three tyre manufacturers were also being raided.
The tyre companies keep facing cartelisation charges every now and then. In February, CCI penalised five tyre manufacturers and a tyre makers' association for indulging in caterlisation.
It imposed a penalty of Rs 425.53 crore on Apollo Tyres, Rs 622.09 crore on MRF, Rs 252.16 crore on CEAT, Rs 309.95 crore on JK Tyre, and Rs 178.33 crore on Birla Tyres. The five tyre companies control over 90 percent of the tyre production in India.
The antitrust watchdog told the firms to cease and desist from unfair business practices. It also slapped a fine of Rs 8.4 lakh on their lobby Automotive Tyre Manufacturers Association (ATMA).
The CCI also directed AMTA to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise. Certain individuals of the tyre companies and ATMA were also held liable for the anti-competitive conduct, according to a statement.
The commission had then found that tyre manufacturers exchanged price-sensitive data and took collective decisions on prices of tyres. It also found that ATMA collected and compiled information relating to company-wise and segment-wise data on production, domestic sales and export of tyres on a real-time basis.
The tyre manufacturers had challenged the charge and the penalties. MRF also filed a writ petition before the High Court of Madras which was dismissed. Some firms even moved the Supreme Court through special leave petitions. The SC also refused to interfere with the CCI order.
Similar charges were levied and a fine of more than Rs 1,788 crore was slapped on Apollo Tyres, MRF, CEAT, Birla Tyres, JK Tyre and Industries and ATMA in August 2018.
Long back, in October 2012, the CCI had exonerated tyre companies of cartelisation charges as it found no evidence. It had then said though the industry displays “some characteristics of a cartel, there has been no evidence”.
But this time the CCI is conducting searches at the premises of a few tyre manufacturers.
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