Apollo Tyres, MRF and others handed penalties by CCI for 'indulging in cartelisation'

On February 2, the Competition Commission of India (CCI) ordered a monetary penalty against five major tyre producers for "cartelization."

According to the CCI, the tyre manufacturers shared price-sensitive data through their association's platform, therefore breaking the legislation against anti-competitive agreements. Apollo Tyres was fined Rs 425.53 crore, MRF Ltd was fined Rs 622.09 crore, CEAT Ltd was fined Rs 252.16 crore, JK Tyre was fined Rs 309.95 crore and Birla Tyres was fined Rs 178.33 crore, according to the CCI.

The Automotive Tyre Manufacturers Association (ATMA) has also been fined by the fairtrade regulator for engaging in cartelization by acting in concert to raise the prices of cross-ply/bias tyres variants sold by each of them in the replacement market, as well as to limit and control production and supply in that market. The Commission found that ATMA gathered and consolidated data on production, domestic sales, and export of tyres on a real-time basis for each firm and category (both monthly and cumulatively).

The five tyre manufacturers and ATMA were held guilty of contravention of the provisions of Section 3 of the Competition Act, which prohibits anti-competitive agreements including cartels, during 2011-2012, it said.

The order was first passed by the regulator in 2018, according to the announcement. However, as directed by the Madras High Court in a suit filed by MRF Ltd, it was stored under a sealed cover. The tyre maker's petition was later denied by a division bench of the High Court, and the case was eventually taken to the Supreme Court, where it was dismissed on January 28, 2022.

The CCI noted stated that "The tyre manufacturers had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres. The Commission also found that ATMA collected and compiled information relating to company-wise and segment-wise data (both monthly and cumulative) on production, domestic sales and export of tyres on a real-time basis. ATMA was also directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise".