CCI penalises firms for bid rigging and cartelisation in Railways tenders
14 Jun 2022
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The Competition Commission of India (CCI) on Thursday issued a final order against seven companies/firms which were found to have contravened the provisions of the Competition Act, 2002 (Act) by indulging in cartelisation in the supply of Protective Tubes to the Indian Railways.
The case was initiated on the basis of a lesser penalty application filed by one of the cartelising entities. Under Section 46 of the Act, a cartel member may approach the Commission by way of filing an application seeking lesser penalty, in return for providing full, true and vital disclosures in respect of the alleged cartel to the Commission.
CCI found these seven companies/firms to have indulged in cartelisation in the supply of Protective Tubes to the Indian Railways by means of directly or indirectly determining prices, allocating tenders, controlling supply and market, co-ordinating bid prices and manipulating the bidding process. The evidence in the matter included regular e-mail communications between the parties and filing of bids from same IP addresses by certain parties etc.
Further, ten individuals of these seven entities were also held by the CCI to be liable for the anti-competitive conduct of their respective companies/ firms, in terms of the provisions of Section 48 of the Act.
CCI imposed penalties at the rate of 5 per cent of the average turnover/ income upon the companies/firms and certain individuals found guilty of violating the provisions of the Act. However, benefit of reduction in penalty under the provisions of Section 46 of the Act of 100 per cent was given to the lesser penalty applicant. Post reduction, CCI directed the parties to pay total penalties of approximately Rs30 lakhs, besides issuing a cease-and-desist order.
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