It’s a story of huge fines that began more than a decade ago and is now mired in challenges and counterclaims. The Supreme Court on Monday one of the fined companies MRF Ltd. sought a response to the appeal (CCI) filed by the Competition Commission of India.

The case is related to an order issued by the National Company Law Appellate Tribunal (NCLAT) December related to the CCI, India’s antitrust regulator Reconsideration and recalculation of fines imposed on tire companies for alleged cartel and price fixing. The Economic Times reported on the bench headed by Justice Sanjivkarna. Monday to the CCI issued a notice noting the MRF appeal and the CCI at 4 At that time, the Supreme Court was hearing the CCII appeal against the NCLAT order dismissing the appellate court.

How it all started

The CCI case began more than a decade ago when the Ministry of Corporate Affairs transferred the case to five tire companies on the basis of allegations of a cartel by the All India Tyre Dealers Federation (AITDF). AITDF controls 90% of the country alleging that five domestic tire companies had engaged in anti-competitive behavior and price matching.

These companies used the rise in prices of raw materials such as natural rubber as an excuse to increase tire prices, but also suspected of failing to reduce tire prices when raw material prices fell.

Tough penalties

On August 31, 2018, the CCI passed an order imposing a fine on tire companies. However, this order was not released until 2022 Year 2 after the final approval of the Supreme Court Monthly Supreme Court.

CCI had passed the order in 2018 The order was passed in 2000. However, as per the directions of the Supreme Court, the order is confidential. The Madras High Court disposed of the petition filed by MRF Ltd. The High Court Judge then dismissed the appeal of the tire manufacturer, which was later referred to the Supreme Court, which dismissed the appeal on 28.02.2022 dd.

Under this order, CCI tire companies totaling over Rs 178.8 crore were fined, including Apolloo Tires with a fine of Rs 425.53 crore, MRF Ltd with a fine of Rs 62.209 crore, MRF Ltd with a fine of Rs 25.216 crore. CEAT Ltd, JK Tire and Birla Tire contributed Rs 3,099.5 17.83.3. crore each. Their association Automobile Tire Manufacturers Association (ATMA) was also fined Rs 84 lakh.

CCI Observations

The competition regulator’s order states that ATMA participated in the cartel by cooperating to increase the price of bias tires. It noted that the tire manufacturers exchanged price-sensitive data through the Tire Manufacturers Platform. The regulator said in a press release on February 2, 2022 that ATMA makes collective decisions on tire prices.

The Commission also observed that ATMA collects and compiles real-time and sectoral data (monthly and cumulative) on tire production, domestic sales and exports related to companies. CCI “The Committee, therefore, believes that sharing this sensitive information will help tire manufacturers to coordinate more easily.”

Measures taken by NCLAT

NCLAT reversed the order in December 2022 and directed the European Commission to re-examine the arithmetic and accidental errors and reconsider the penalties to save the domestic tire industry which is facing various pressures.

The tribunal said that “punitive measures are being considered to save the domestic industry” as global tire makers who are not fully utilizing their capacity are under immense pressure. The tribunal ruled that the CCI “must also consider promoting the domestic industry”. The competition law also needs to take into account the economic development of the country.

The report said, “Domestic firms that violate the rules should be given unquestionable penalties and an opportunity to reform rather than leaving their organizations in a truly unhealthy state.”

Upon observation, CCI appealed to the Supreme Court. challenging the order of the court.

Miscalculation.

NCLAT’s observation in December 2022 said there were “unintentional errors” in the CCI order. “Since the cartel was discovered in December 2011 and there was a computational error, other flaws could have caused the error.” Conclusion.

NCLAT judges Rakesh Kumar and Ashok Kumar Mishra pointed out that the DG had made an error in calculating the percentage increase in prices and that the revised data clearly showed that there was no price parallelism. The DG is the CCI investigating agency.

“The correlation coefficient calculation has used the wrong FY 2009-13 instead of FY 2011-12. Had the correlation coefficient been calculated correctly, it would have looked much lower. It is also not parallel to the price.” NCLAT “This is the basis for sexual violence.”

Tire company CCI fined by NCLAT, claims no wrongdoing.

Being one of the fined companies, CEAT responded to the fine and CCI The company in its stand said that the company has not committed any misconduct. He said that he has never been part of a cartel or involved in anti-competition. In its exchange filing, the company said: “We strongly emphasize that CEAT has eliminated all illegal activities and assure all stakeholders that CEAT has never been a part of or involved in a cartel or engaged in anti-competition.”