CCI Dismisses Allegations of Abuse of Dominance Against Directorate General of Foreign Trade & Ors.

On July 25, 2019, CCI dismissed allegations made by Beach Mineral Producers Association (‘Informant-1’) and Mr. V. Velmurugan (‘Informant-2’) against Directorate General of Foreign Trade (‘DGFT’), Director General, DGFT (‘OP-2’) and Indian Rare Earths Limited (‘Rare Earths’), alleging violation of the provisions of Section 4 of the Act. [1]

The DGFT is responsible for formulating and implementing the Foreign Trade Policy (‘FTP’). The DGFT published a notification under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, (‘FTDR Act’) read with the FTP for the year 2015 – 2020, Standard Operating Procedure (‘SOP’) with respect to export of Beach Sand Minerals (‘BSMs’). The Informants alleged presence of onerous conditions with respect to the SOP such as: (i) due diligence of foreign buyer by Rare Earths and end-under certification by private exporter; (ii) fixing of 3% of Free on Board (‘FOB’) value as commission payable to Rare Earths; (iii) sharing of commercial secrets with Rare Earths; (iv) indemnity in favour of Rare Earths; (v) provision of right to ban an exporter by Rare Earths etc. It was further alleged that the purpose of the SOP was to restrict competition.

CCI observed that policy formulation by DGFT regarding export of BSMs falls under the provisions of FTDR Act and the FTP, and therefore, it is not amenable for examination under provisions of the Act. Accordingly, CCI dismissed the complaint.

[1] Case No. 19 of 2019.

Published In:Inter Alia Special Edition- Competition Law - September 2019 [ English
Date: September 21, 2019