ARTICLE
29 August 2024

Competition Commission Of India

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CCI dismisses complaint against Saint Gobain India Pvt. Ltd and Compagnie De Saint-Gobain for alleged anti-competitive practices
India Antitrust/Competition Law

Enforcement

CCI dismisses complaint against Saint Gobain India Pvt. Ltd and Compagnie De Saint-Gobain for alleged anti-competitive practices

CCI received a complaint against Saint Gobain India Pvt. Ltd1 and Compagnie De Saint-Gobain2 (together referred to as "Saint Gobain") for indulging in alleged anti-competitive practices, in contravention of Sections 3 and 4 of the Competition Act.

The complainant inter alia alleged that, Saint Gobain imposed exclusive supply obligation on its processors of glass3 in the propel project participation agreement proposed to be executed between the parties ("Propel Agreement") to source all glass products only from Saint Gobain and as consideration, allowed processors to use Saint Gobain's branding. By way of oral direction, Saint Gobain: (a) refused to sell the products to the processors who dealt with products of competitors; and (b) offered significant discounts to processors if they purchased exclusively from Saint Gobain; and (c) forced processors to issue invoices at the prices agreed between Saint Gobain and large customers (like real estate companies).

CCI dismissed the case and inter alia noted that:

  1. the allegations arose out of the unsigned Propel Agreement and the complainant failed to place on record a subsisting and valid copy of the Propel Agreement;
  2. the exclusivity was only imposed in relation to certain special kinds of glass, and processors could procure other types of glass from other glass manufacturers. Further, Saint Gobain provides necessary technical and marketing training and guidance to the processor to improve its production efficiency, technical and marketing capability and work methods so that it can render the desired products to the end-consumer. Thus, imposing exclusivity on the processors was objectively justified and not prima facie anti-competitive;
  3. offering discounts based on volume of purchase is not per se anti-competitive and the complainant failed to substantiate the allegation regarding dealing with competitors; and
  4. Saint Gobain does not have any control over the prices charged by the processors from the end consumers and processors were free to charge their price from the end consumers. On this basis, CCI rejected the allegation of resale price maintenance.

(Source: CCI Order dated July 22, 2024)

CCI dismisses complaint against India Bulls Housing Finance Limited for alleged anti-competitive practices

CCI received a complaint against India Bulls Housing Finance Limited ("India Bulls") and its office bearers for indulging in alleged anti-competitive activities, in contravention of Sections 3 and 4 of the Competition Act.

Mr. Anil Bansal ("Complainant"), a borrower, inter alia alleged that India Bulls: (a) arbitrarily and unilaterally increased the floating reference rate for the loans against property that the Complainant availed from India Bulls; and (b) charged pre-closure loan penalties which discouraged the Complainant from availing loans from another loan provider.

CCI dismissed the case and inter alia noted that India Bulls was not dominant in the market for provision of loan against property due to the presence of several significant players and rejected the allegation of any abuse thereof. Given that Section 3 of the Competition Act does not cover an agreement with an end-consumer, CCI also rejected the allegation under Section 3 of the Competition Act.

(Source: CCI Order dated July 22, 2024)

CCI reverses its earlier decision and exonerates sugar mills in a case involving bid rigging cartel

On September 18, 2018, CCI imposed a penalty on various sugar mills and their associations ("Opposite Parties"), for rigging bids in relation to tenders floated by Public Sector Oil Marketing Companies ("OMCs"), for procurement of anhydrous alcohol ("Ethanol").

During the investigation, the DG found sugar mills and their associations indulging in a bid rigging cartel and submitted its investigation report, which was forwarded to the Opposite Parties by CCI. Subsequently, few of the Opposite Parties filed an application before CCI seeking cross-examination of a few witnesses, which was allowed by CCI. Thereafter, DG submitted a separate report on cross-examination to CCI, which was forwarded to the parties for filing their reply and an opportunity of hearing was given to Opposite Parties on both the reports.

Upon hearing the parties, CCI directed the DG to further investigate the matter concerning bid rigging in Maharashtra. The DG submitted the supplementary investigation report to CCI ("Supplementary Report"), which was forwarded by CCI to the Opposite Parties for filing their reply.

After considering the reply, on September 18, 2018, CCI passed the final order (without affording oral hearing to the Opposite Parties) and imposed penalties of INR 38,05,00,000 (Indian Rupees thirty-eight crore five lakh) on the Opposite Parties ("CCI Order"). For a summary of the CCI Order, refer to JSA Newsletter of September 2018.

Proceedings before NCLAT

Aggrieved, the Opposite Parties challenged the CCI Order before NCLAT and inter alia contended that CCI failed to provide an opportunity of hearing to the Opposite Parties after the DG submitted the Supplementary Report.

NCLAT Observations

On October 10, 2023, NCLAT passed a judgment ("NCLAT Judgment") whereby it disposed of the appeal and inter alia held that the CCI Order was not in compliance with the principles of natural justice as CCI ought to have provided an opportunity of hearing to the Opposite Parties especially when further investigation was initiated pursuant to Opposite Parties' request. Accordingly, NCLAT remanded the matter back to CCI for fresh consideration. For a summary of the NCLAT Judgment, refer to JSA Newsletter of October 2023.

Proceedings before CCI

Pursuant to the NCLAT Judgment, CCI provided an opportunity of hearing to the Opposite Parties. CCI closed the case against the Opposite Parties and inter alia noted that:

  1. sugar mills were located in the nearby locality and therefore, owing to production costs being similar, the likelihood of sugar mills quoting prices in the similar range was high and justifiable;
  2. merely quoting identical prices by a few sugar mills is not sufficient to establish cartelisation as price parallelism is not sufficient to establish cartelisation in the absence of any plus factors;
  3. there was no evidence on record to establish that sugar mills discussed the depot-wise prices and quantities to be quoted in the tenders in association meeting; and
  4. there was no exchange of commercially sensitive information between sugar mills. In some instances, the production data was exchanged, however, the same was aggregated and dated.

(Source: CCI Order dated July 22, 2024)

CCI dismisses complaint against Toyota Kirloskar Motors Private Limited for alleged abuse of dominant position

CCI received a complaint against Toyota Kirloskar Motors Private Limited ("Toyota")4 and Uttam Toyota, the authorised dealer of Toyota for inter alia indulging in alleged abuse of dominant position, in contravention of Section 4 of the Competition Act.

Mr. Balbir Singh Nagpal ("Complainant") had booked a Toyota car, 'Innova Hycross Hybrid ZX(O)' with Uttam Toyota. The Complainant inter alia alleged that Toyota abused its dominant position in the market for 'strong hybrid passenger vehicles in India': (a) by arbitrarily changing the delivery of the car from 2 (two) to 8 (eight) months and compelling consumers to purchase accessories for the cars; (b) consumers who had booked the car around the same time as him or after him received delivery of their cars prior to him; (c) after substantial waiting time, one of the direct sales agents5 of Toyota assured early delivery on the payment of a premium of about INR 2,25,000 (Indian Rupees two lakh twenty-five thousand), which is unlawful.

CCI dismissed the case and inter alia observed that: (a) the allegations are in the nature of an inter se dispute between the Complainant, Toyota and Toyota Uttam, and do not have market wide anti-competitive effects; (b) long waiting period of cars cannot be the subject matter of antitrust scrutiny as delivery of cars is dependent on various factors; and (c) the Complainant was informed about the waiting time period of 8 (eight) months for the new car and he accepted the same.

(Source: Order dated July 12, 2024)

CCI dismisses complaint against of Indian Railways and other companies for alleged anti-competitive practices

CCI received a complaint against the Principal Chief Materials Manager, Integral Coach Factory, Indian Railways ("ICF"), Super Steels, and Alvind Industries for indulging in alleged anti-competitive practices, in contravention of Sections 3(3) and 4 of the Competition Act.

The complainant inter alia alleged that: (a) ICF abused its dominant position while laying down unreasonable eligibility criteria in the tenders for the procurement of lower spring beam with vertical brackets ("Brackets"); and (b) Super Steels and Alvind Industries have indulged in a bid-rigging cartel for supplying the Brackets to ICF as the aforesaid companies quoted their respective bid prices using the same IP address and the said companies have been the L1 and L2 bidders for last several years.

CCI dismissed the case and inter alia observed that there was a significant difference in the prices quoted by Super Steels and Alvind Industries in the tender. Further, CCI noted that ICF was a consumer of the Brackets and has the freedom to specify its requirements (i.e., the eligibility criteria) which requirements cannot itself be called anti-competitive. Accordingly, no case of cartelisation can be made out.

(Source: CCI Order dated July 12, 2024)

Footnotes

1. It is engaged in the designing, manufacturing and distributing materials and services including glass for construction and industrial markets in India.

2. It is the parent entity of the Saint Gobain group including Saint Gobain India Pvt. Ltd.

3. A processor prepares and processes sheets of flat glass into products such as windows and mirrors for installation in buildings and related structures.

4. It is the Indian arm of Toyota Motor Corporation

5. They act as middlemen in the market and normally work on commission basis.

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