Competition panel fines 10 explosives manufacturers in Coal India case

The Competition Commission of India (CCI) today passed its final order in a case filed by Coal India Limited (CIL) against various explosives manufacturers for functioning like an oligopoly.

In a unanimous decision, the CCI imposed a fine equivalent to 3 per cent of average annual turnover for the last three financial years on the 10 explosives manufacturers, with fines amounting to Rs60 crore approximately.

The explosives manufacturers included inter alia, Gulf Oil Corporation Limited, Ideal Industrial Explosives Limited, Solar Industries India Limited, Blastec India Pvt Limited and Indian Explosives Limited.

CIL had alleged that the explosives manufacturers were engaging in anti-competitive conduct by collectively determining prices, threatening to stop supplies and boycotting auctions organised by CIL to finalise suppliers for explosives - a critical input for coal mining.

According to the CCI, the 10 explosives manufacturers named in the plaint had violated section 3 of the Competition Act by collectively boycotting the electronic reverse auction held in January 2010.

The CCI held that the explosives manufacturers had acted in concert by non-participation in the CIL reverse auction, which resulted in a collective boycott of the auction and manipulation of the bidding process.