CCI charges Rs 1,788 cr penalty on 5 tyre makers for cartelisation

Fair trade regulator Competition Commission of India (CCI) has inflicted a penalty of more than Rs 1,788 crore on five tyre firms and their Association Automotive Tyre Manufacturers Association (ATMA) for indulging in alleged cartelisation.

The five tyre firms comprise MRF Ltd, Apollo Tyres Ltd, JK Tyre & Industries Ltd, CEAT Ltd and Birla Tyres Ltd. The Commission inflicted penalties of Rs 622.09 crore on MRF Ltd, Rs 425.53 crore on Apollo Tyres, Rs 309.95 crore on JK Tyre, Rs 252.16 crore on CEAT Ltd and Rs 178.33 crore on Birla Tyres, besides passing a cease and desist order. Additionally, a penalty of Rs 0.084 crore was also charged on ATMA. ATMA was ordered to disengage and disassociate itself from collecting wholesale and retail costs via the member tyre firms or otherwise.

The Commission noted that the tyre producers had exchanged price-sensitive data amongst them via the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the costs of tyres.

The Commission also found that ATMA collected and compiled data relating to company-wise and segment-wise information (both monthly and cumulative) on production, domestic sales and export of tyres on a real-time basis.Therefore, the Commission stated that the sharing of such sensitive data made coordination easier amongst the tyre firms.

The fair trade regulator in a release told the media that CCI had passed a final order dated 31.08.2018 against five Tyre firms namely MRF Ltd, Apollo Tyres Ltd, JK Tyre & Industries Ltd, CEAT Ltd, Birla Tyres Ltd and their association i.e. Automotive Tyre Manufacturers Association (ATMA) for indulging in cartelisation by acting in concert to raise the costs of cross-ply or bias tyres variants sold by each of them in the replacement market and to limit and manage production and supply in the said market, thereby violating the conditions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Competition Act, 2002.

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