The All-India Tyre Dealer Federation (AITDF) has said it will challenge the CCI order which gave a clean chit to tyre companies accused of cartelisation. Speaking to FE, SP Singh, convener of AITDF, said: ??The majority order itself says that traces of cartelisation exist and only because there is lack of evidence, they have not been penalised. All the evidence provided by us were ignored and we are going to challenge the majority order before the Competition Appellate Tribunal within the stipulated time-frame.??
Singh said that the price of rubber have come down from R220 per kg to Rs 177 in the past few months. ??Despite the reduction in input prices, the tyre makers continue to keep the retail prices unchanged. Our lawyers are examining the matter on several grounds,?? he said.
On October 30, CCI order in the matter was made public which said it has not found any evidence of cartelisation among tyre manufacturers like Apollo, MRF and Ceat.
??There is no sufficient evidence to hold a violation by the tyre companies Apollo, MRF, JK Tyre, Birla, Ceat and ATMA (Automotive Tyre Manufacturers Association) of provisions of Competition Act,?? CCI said in its order. ??It is safe to conclude that on a superficial basis the industry displays some characteristics of a cartel there has been no substantive evidence of the existence of a cartel??, it said.
Cartelisation generally refers to entities entering into agreements whereby they decide not to compete on price or product or customers. Such practices, which adversely impact overall competition in the market, are prohibited under Section 3 of the Competition Act. The commission in June 2010 had directed its director general (DG) to carry out an investigation on the issue, specifically on the five major domestic tyre makers?Apollo Tyres, MRF, Ceat Tyre, Birla Tyre and JK Tyre. The DG, investigation arm of the CCI, had concluded that tyre makers violated some provisions of the Competition Act.
According to the fair trade regulator, as a tradable, the industry has always been open to competitive threats from imports. ??The commission holds that the available evidence does not give enough proof that tyre companies/ATMA acting together have limited and controlled the production and price of tyres in the market in India,?? the order said.
According to AITDF, the matter was first reported before the corporate affairs ministry in December 2007 which was then referred to MRTP. Later the complaint was transferred to the Competition Commission of India and the director general of investigations in CCI.