A PENALTY OF RS. 1, 788 CRORES IMPOSED ON FIVE TYRE MANUFACTURERS FOR CARTELISATION: COMPETITION COMMISSION OF INDIA The Competition Commission of India (CCI) imposed a hefty penalty of Rs. 1, 788 crores on Apollo Tyres, MRF, CEAT, JK Tyre, Birla Tyres and Automotive Tyre Manufacturers Association for cartelization. The Ministry of Corporate Affairs (MCA) observed that violation of Section 3 of the Competition Act, 2002 was done by these 5 tyre manufacturing companies and hence a reference regarding the same was made by MCA to CCI. Mr. SP Singh the convener of All India Tyre Dealers Federation (AITDF) made a representation to MCA alleging that these tyre manufacturers together controlled 90% of the tyre production in India and that they were engaged in price parallelism. Price parallelism is defined as a practice where there are “changes in prices by rivals that are identical, or nearly so, and simultaneous, or nearly so, it includes other forms of parallel conduct, such as capacity reductions, adoption of standardized terms of sale, and suspicious bidding patterns, e.g., a predictable rotation of winning bidders. This is looked upon as anti-competitive practice as it results in monopolistic pricing of goods and restricts new players from entering the market. In the present case these tyre manufacturers raised the prices of tyres with increase in price of natural rubber and other raw materials, but subsequent reduction in the prices of these raw materials was not followed by a decrease in the prices of tyres and thus they were maintaining their own price control practice on tyre pricing and hence disturbed fair play in the market. The CCI also passed a "cease and desist" order against these tyre manufacturers. Reddy and Reddy Law Firm advises corporate clients on a wide range of competition law and antitrust matters including anti-competitive agreements, restriction of trade, merger control, abuse of dominant position and competition compliance.