CCI imposes fine on Apollo Tyres, MRF, other tyre makers for cartelisation

The Competition Commission of India (CCI) on Wednesday imposed monetary penalty on five major tyre manufacturers, including Apollo Tyres and MRF, for "indulging in cartelisation by acting in concert to increase the prices of cross ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the said market."

A penalty of Rs 425.53 crore was levied on Apollo Tyres, Rs 622.09 crore on MRF Ltd, Rs 252.16 crore on CEAT Ltd, Rs 309.95 crore on JK Tyre and Rs 178.33 crore on Birla Tyres, the CCI said in a statement.

"The tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres," the fair trade regulator noted.

The five tyre manufacturers and ATMA were held guilty of contravention of the provisions of Section 3 of the Competition Act, which prohibits anti-competitive agreements including cartels, during 2011-2012, it said.

"The Commission also found that ATMA collected and compiled information relating to company-wise and segment-wise data (both monthly and cumulative) on production, domestic sales and export of tyres on a real-time basis," the CCI added.

In addition, a penalty of Rs 8.4 lakh was also imposed on ATMA. “ATMA was also directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise," the statement added.

Further, certain individuals of the aforesaid tyre companies and ATMA were held liable for the anticompetitive conduct of their respective companies/association in terms of the provisions of Section 48 of the Act, CCI said.

Earlier today, CCI said that the Supreme Court has dismissed a petition filed by the tyre companies wherein they had challenged the regulator's order imposing penalties totalling over Rs 1,788 crore on them for anti-competitive practices.

In August 2018, the watchdog had imposed a total fine of more than Rs 1,788 crore on Apollo Tyres, MRF, CEAT, Birla Tyres, JK Tyre and Industries and Automotive Tyre Manufacturers Association (ATMA).

They were found to have violated Section 3 of the Competition Act during 2011-2012. The section prohibits anti-competitive agreements.