Today’s guest post is from Avinash Amarnath.
India Update 2015 Vol. 2
Trade associations continue to be the flavor of the day in the cartel space in India.
On 21 January 2015, the Competition Commission of India (CCI) imposed a penalty on the Dumper Owner’s Association (DOA), a trade association of dumper and hywa [unloading] machinery providers for intra-port transportation of cargo at Paradip Port and its individual officers for controlling the supply of dumpers and hywas at Paradip Port and fixing supply prices. The trade association was fined 8% of its average turnover (for the last 3 years) while the individual officers were fined 5% of their average income (for the last 3 years).
The complaint was brought by Swastik Stevedores Private Limited (the Informant), a company engaged in the business of stevedoring and intra-port transportation of cargo alleging that the DOA, in connivance with the Paradip Port Trust (PPT), the government authority managing Paradip Port had been refusing to provide dumpers and hywas to it.
In particular, the CCI found that:
- The DOA had been entrusted with the authority to issue gate passes for dumpers and hywas at Paradip Port by the PPT which gave it a unique advantage in controlling supply at the port as no machinery could enter the port without a gate pass. Further, the members of the DOA owned a substantial number of the dumpers used at Paradip Port. The DOA used this control over the supply of dumpers and hywas to refuse supply to the Informant thereby limiting output through collective action in violation of the Competition Act, 2002 (Competition Act); and
- The DOA collectively fixed the rates to be charged for provision of dumpers and hywas. The members were forced to abide by such rates and were not allowed to individually negotiate rates. This resulted in determination of sale prices through collective action in violation of the Competition Act.