CCI by its order dated June 10, 2015 imposed penalty @ 3% of their annual turnover for preceding three years against thirteen manufacturers/ suppliers of CN Containers (containers with disc required for manufacture of 81 mm bombs) for indulging in practice of cartelization. The Opposite Parties (OPs) involved were namely, Sheth & Company, Veekay Enterprises, Sai Trading, Sai Industries, Shree Polymers, Sai Enterprises, Mac Polymer, Miltech Industrial Pvt. Limited, Nityanand Udyog, Interplas (India) Private Limited, M/S Baijnath Plastic Products Private Limited, Narendra Explosive Limited, and Narendra & Company. CCI, while forming prima facie opinion observed that even though OPs were located at different places, some of them quoted identical prices in response to few tenders while others have refrained from participating in the tender process and referred the matter to the DG for investigation. DG concluded that the market conditions prevalent in this sector and supply of the containers are controlled by few entities operating under different names. Moreover, on account of relatively low demand for the containers and the high installed capacities of the existing players, the market has not seen any significant new entrant(s) in the last few years. Further, with small number of suppliers, little or no entry, stable demand conditions, identical products or services and few or no substitutes, etc., indicate that the market is conducive to cartelization. DG concluded that OPs acted in contravention of Section 3(3)(a) and Section 3(3)(d). CCI, accepting the view of DG, observed that the manufacturers indulged in anti-competitive practices i.e. collusion of bid prices; existence of an agreement between the parties since the price bids submitted were either identical or similar; existence of cross ownership of the few market players-out of the thirteen manufacturers, the modus operandi of at least ten of these firms was governed by mutual understanding; quoting identical/similar price bids along with enterprises with same owners, stringently standardized product, and predictable demand resulted in appreciable adverse effect on competition, and agreement between the OPs resulted in creation of barriers to new entrants, and held them violative of Section 3 and Section 4 of the Act. On the basis of abovementioned findings, CCI was of the view that the companies were engaged in the practices of determination of purchase price of CN Container and collusive bidding in contravention of the provisions of the Act. CCI while imposing the abovementioned fine, directed the companies to cease and desist from the practices that were found to be anti-competitive i.e., price fixing and collusive bidding.
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