‘No wrongdoing’: CEAT responds to CCI's Rs 252 cr fine for cartelisation

After the Competition Commission of India (CCI) imposed a Rs 252.16 crore cartelisation fine on the Mumbai-based tyre maker CEAT, it has said that there has been no wrongdoing on the company’s part. The company further reassured all its stakeholders that CEAT was never a part of any cartel and that the company has never undertook any anti-competitive practices.
 
“We strongly reiterate that there has been no wrongdoing on the part of CEAT and want to reassure all the stakeholders that CEAT has never indulged in or was part of any cartel or undertook any anti-competitive practices,” the company said in an exchange filing. It further noted that the CCI order against tyre companies is being studied for “appropriate legal recourse”.
 
CCI imposed penalties on tyre makers – CEAT, MRF, Apollo, JK Tyre, Birla Tyres and Automotive Tyre Manufacturers Association (ATMA). The competition watchdog imposed penalties of Rs 425.53 crore on Apollo Tyres, Rs 622.09 crore on MRF, Rs 252.16 crore on CEAT, Rs 309.95 crore on JK Tyre, Rs 178.33 crore on Birla Tyres and Rs 0.084 crore on Automotive Tyre Manufacturers Association (ATMA).
 
In addition, ATMA has also been directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise. The commission imposed these penalties on tyre makers and ATMA “for indulging in cartelisation by acting in concert to increase the prices of cross ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the said market.”
 
The five tyre makers and ATMA were guilty of contravening the provisions of the section 3 of the Competition Act, 2002 which prohibits anti-competitive agreements including cartels, during 2011-2012, the CCI said in its order. The commission further noted, “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.”
 
It further added, “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. Thus, the Commission noted that the sharing of such sensitive information made the coordination easier amongst the tyre manufacturers.”

Also read: CCI imposes fine on Apollo Tyres, MRF, other tyre makers for cartelisation