CCI to enforce code of conduct on trade bodies

New Delhi, May 22 | Updated: May 23 2007, 05:30am hrs
After zeroing in on cartels and companies, which restrict the play of market forces, the Competition Commission of India (CCI) is now planning to bring under its purview trade and manufacturing associations that may be acting as cartels.

The commission will, however, distinguish between the lobbying functions of these associations with any cartel-like tendencies they may have developed, sources said. The CCI will only kick into action if these associations do anything to distort the market such as enforcing their rules on consumers, fixing prices or carving out markets for members, they added.

The commission is also mulling the practicability of coming out with a code of conduct for trade and manufacturing associations that would distinguish between anti competitive behaviour and lobbying.

The move comes in the wake of intense lobbying and protests by cement and steel manufacturers associations against the new duty structures announced in the Budget. High on the commissions scanner are the cement, steel and tyre industries-all of which have very strong associations.

In a case akin to what the CCI now proposes to do, the Monopolies and Restrictive Trade Practices Commission had recently pulled up the Multiplex Association of India for indulging in anti-competitive practices. At present, the countrys competition laws do not cover trade and manufacturing associations. In most countries, however, trade and competition laws do cover trade and manufacturing associations. For instance, the US justice department recently filed an antitrust suit alleging Switzerlands watchmakers group and US watch importers of scheming to control production and fix prices of Swiss watches being sold in the US. Similarly, Belgium recently pulled up its tobacco manufacturers association for indulging in anti-competitive behaviour.