Cartelisation: Competition Commission directs 8 MSMEs to cease, desist from unfair biz practices – The Economic Times

Clipped from: https://economictimes.indiatimes.com/small-biz/sme-sector/cartelisation-competition-commission-directs-8-msmes-to-cease-desist-from-unfair-biz-practices/articleshow/86967897.cmsSynopsis

The case, which pertained to the supply of axle bearings to Eastern Railway, was taken up by the regulator on the basis of a reference filed on behalf of the Eastern Railway.

NEW DELHI: Competition Commission on Tuesday directed eight MSMEs to cease and desist from unfair business practices after finding them indulging in bid rigging and cartelisation.

The case, which pertained to the supply of axle bearings to Eastern Railway, was taken up by the regulator on the basis of a reference filed on behalf of the Eastern Railway.

The watchdog found the eight firms indulged in cartelisation in the supply of axle bearings by means of directly or indirectly determining prices, allocating tenders, coordinating bid prices and manipulating the bidding process.

The Competition Commission of India (CCI) has directed the firms as well as their respective officials to cease and desist from indulging in such practices, a release said.

These firms are Chandra Brothers, Chandra Udyog, Sriguru Melters & Engineers, Rama Engineering Works, Krishna Engineering Works, Janardan Engineering Industries, V. K. Engineering Industries and Jai Bharat Industries.

“The Commission holds that OP-1 to OP-8 have contravened the provisions of Section 3(1) of the Act read with Section 3(3),” it said in an order.

OPs or Opposite Parties are the firms. The Act refers to the Competition Act, 2002, and Section 3 pertains to anti-competitive agreements.

In the order, the regulator noted that e-mails exchanged showed that the firms discussed quantity allocation with respect to the tenders of Indian Railways for the procurement of axle bearings, amongst themselves. The vendors were also found to have discussed the compensation mechanism in the event that some of them did not win the agreed quantities, it added.

However, CCI decided not to impose monetary penalties on the firms after taking into consideration certain aspects, including that the firms were MSMEs with limited staff and turnover. The cooperative and non-adversarial approach adopted by the firms in acknowledging their involvement as well as the economic stress wrought upon the MSME sector in the wake of COVID were also taken into account while deciding against imposing penalties.

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