FACTS OF THE CASE

• It was alleged by the Informant in this case that Hindalco Industries Limited and Vedanta Limited by forming a cartel were determining prices of certain copper products in India, sharing the market of certain copper products by way of allocation of customers and engaging in bid rigging which is in violation of Section 3(1) of the Competition Act, 2002 read with Sections 3(3)(a), 3(3)(c) and 3(3)(d).
• It was also alleged that the OPs (Opposite Parties) had a verbal agreement that in the event one of the OPs ended up with selling larger volume of copper products, such OP would be required to make purchases of copper products from the other OP in order to maintain parity. It is alleged that in order to avoid scrutiny by regulators, such purchases would not carry the name of the purchasing OP, but were instead billed under fake identities.
• The Commission considered the matter and observed that a bare review of the information reveals that aside from making the aforementioned allegations, the Informant has not made available any details of such documents or meetings to substantiate the same.
• The Commission directed the Informant to make available the details/documents along with an Affidavit within a period of 10 days. The Informant filed its response and reproduced the Information already filed before the Commission.
• The Informant has neither filed any details/ documents to substantiate the allegations made nor has filed any Affidavit, as directed by the Commission. The Informant has annexed a copy of the Affidavit which was previously filed at the time of filing of the original Information in the matter. 

ISSUE

The issue which arose out of this case was:

Whether Hindalco and Vedanta have engaged in anti-competitive conduct by determining prices of certain copper products in India, sharing the market of certain copper products by way of allocation of customers and engaging in bid rigging?

JUDGMENT

In response to allegations that Hindalco and Vedanta charged similar additional charges, the Competition Commission of India stated that mere price parallelism is insufficient to order a probe in the absence of any other material on record from which collusion or concert between the parties can be inferred, even though the informant was given the opportunity to file additional information.

The Commission noted that, despite claiming that the agreement was usually captured on excel sheets, the informant was unable to provide evidence of any communication or excel sheet to support the allegations that the officials of Hindalco and Vedanta communicate with each other frequently to set the price and also to decide on the time to mutually revise the price by way of price circulars. Furthermore, the names of the authorities were not disclosed, therefore the charges were deemed too “outlandish” to warrant an investigation.

The allegations regarding similar freight charges were dismissed by the Commission based on the information itself, which admitted that freight charges are another component of the cost and that buyers of copper products can also transport copper products from the manufacturers’ warehouse/depots using their own vehicles, indicating that buyers have the option.

Furthermore, the Informant failed to submit any documentation to back up the claim that the manufacturers had their own exclusive buyers. There was no evidence presented to the Commission that either manufacturer refused to supply the products to the customers of the other.

In the case of allegations of bid rigging in the defence industry, it was noted that it is neither feasible nor desirable to conduct a roving investigation into tenders that are said to have been concluded as early as July 2010 and as late as August 2017 in the absence of any evidence of even prima facie collusion or specific allegations of collusion.

As a result of the failure to submit evidence/documents to substantiate the claims contained in the information, the case was closed by the Commission under Section 26(2).

REFERENCES

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