Saturday, May 14, 2022

CCI penalises firms found guilty of bid rigging, cartelisation in Railways tenders

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New Delhi: The Competition Commission of India (CCI) issued a final order against 11 companies which were found to have contravened the provisions of the Competition Act 2002, which proscribe anti-competitive agreements, through bid-rigging in tenders floated by the Railways. The case was initiated on the basis of a reference filed on behalf of the North Western Railways.

CCI found these companies/ firms to have indulged in cartelisation in the supply of High Performance Polyamide Bushes (HPPA) and Self Lubricating Polyester Resin Bushes (SLPR) to the Indian Railways by means of directly or indirectly determining prices, allocating tenders, controlling supply and market, co-ordinating bid prices and rigging the bid.

The evidence in the matter included regular e-mail communications and WhatsApp exchanges between the parties, quoting of identical/ similar prices by certain parties, filing of bids from the same IP addresses by certain parties in close proximity etc. Of the 11 entities, four were lesser penalty applicants before the CCI. Under Section 46 of the Act, a cartel member may approach the Commission by way of filing an application seeking lesser penalty, in return for providing full, true and vital disclosures in respect of the alleged cartel to the Commission.

Further, 14 individuals of these 11 entities were also held by the CCI to be liable for the anti-competitive conduct of their respective companies/ firms, in terms of the provisions of Section 48 of the Act.

The CCI imposed penalties at 5 percent of the average turnover/ income upon the companies/ firms and their respective individuals found guilty of violating the provisions of the Act. Giving the benefit of reduction in penalty under the provisions of Section 46 of the Act of 80 percent to the first lesser penalty applicant and its individuals, 40 percent to the second lesser penalty applicant, 30 percent to the third lesser penalty applicant and its individuals, and 20 percent to the fourth lesser penalty applicant and its individuals, CCI directed the parties to pay penalties totalling Rs 1.16 crore approximately, besides issuing a cease-and-desist order.

The order was passed in Ref. Case No. 03 of 2018 and a copy of the order is available at the CCI website at www.cci.gov.in.

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