Cartelisation In Respect Of Zinc … vs Eveready Industries India Ltd & … on 19 April, 2018 – Case Summary
In the case of “Cartelisation In Respect Of Zinc vs Eveready Industries India Ltd & Others on 19 April, 2018”, the Competition Commission of India (CCI) took up a suo motu case against Eveready Industries India Ltd., Indo National Ltd., Panasonic Energy India Co. Ltd., and the Association of Indian Dry Cell Manufacturers. The case was initiated following an application filed by Panasonic Energy India Co. Ltd., a subsidiary of Panasonic Corporation Japan, under Regulation 5 of the Competition Commission of India (Lesser Penalty) Regulations, 2009, read with Section 46 of the Competition Act, 2002.
Facts of the Case
The application submitted by Panasonic Energy India Co. Ltd. (OP-3) alleged the existence of a cartel among Eveready Industries India Ltd. (OP-1), Indo National Ltd. (OP-2), and itself. These companies were all engaged in the manufacture and supply of zinc-carbon dry cell batteries. The cartel was alleged to control the distribution and price of zinc-carbon dry cell batteries in India, in contravention of the provisions of Section 3(3) read with Section 3(1) of the Act.
The application also disclosed that these manufacturers were members of a trade association, namely, the Association of Indian Dry Cell Manufacturers (OP-4), which facilitated transparency between the manufacturers by collating and disseminating data pertaining to sales and production by each of the manufacturers.
Issues and Observations
The Commission noted that the alleged conduct of cartelisation took place through coordinated price increase by the manufacturers, active measures by the manufacturers to implement price control and reduce possibilities of price competition amongst them, and reduction of price competition at the stockist/ retailer/ wholesaler level by controlling and agreeing on the level of incentives to be provided.
The Commission directed the Director General (DG) to conduct an investigation into the matter and submit an investigation report. The DG carried out search and seizure operations at the premises of the manufacturers and seized incriminating material and documents.
The DG’s investigation revealed that the manufacturers had an arrangement whereby they exchanged commercially sensitive information amongst themselves for the purpose of price-coordination. Such arrangement was found to be in place since 2008, much prior to 20 May 2009, the date on which Section 3 of the Act became enforceable, and continued until 23 August 2016, the date of search and seizure operations by the DG.
The DG concluded that the manufacturers had indulged in anti-competitive agreement/ conduct and concerted practices, in the domestic dry cell battery market of zinc carbon batteries, during the period 20 May 2009 to 23 August 2016 and thereby contravened the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act.
Court’s Decision
The court’s decision is not mentioned in the extracted content. However, the case highlights the role of the Competition Commission of India in maintaining fair competition in the market and its power to investigate and take action against anti-competitive practices. The case also underscores the importance of companies adhering to competition laws to avoid legal repercussions.