CCI Dismisses Allegations of Anti-Competitive Agreements against Hindalco and Vedanta

On October 8, 2020, the CCI dismissed an information filed by an anonymous complainant against Hindalco Industries Limited (‘Hindalco’) and Vedanta Limited (‘Vedanta’) alleging a contravention of provisions of Section 3(3) of the Competition Act, 2002 (‘Competition Act’). [1]

The complainant alleged that Hindalco and Vedanta engaged in cartelisation in production and supply of refined copper products and certain additional charges related to its sale. The complainant: (i) relied upon simultaneity in the issuance of price circulars; and (ii) alleged (a) discussion of granted discounts, (b) identical charging of premium on certain products, and (c) identical additional charges and freight charges (despite difference in costs), among Hindalco and Vedanta. The complainant further alleged that Hindalco and Vedanta engaged in customer allocation and entered into verbal agreements to maintain parity in sale volumes by making sales to each other whenever either entity failed to make desired sales, under fake identity billing. Lastly, the complainant alleged bid-rigging among Hindalco and Vedanta in tenders issued by the Indian Ordinance Factories, for supplies to the Indian defence industry, allowing them to quote invariably higher rates.

The CCI observed that mere price parallelism is not sufficient to order probe, in the absence of any material on record indicating collusion among Hindalco and Vedanta. Regarding the allegations of collusion on freight charges, the CCI noted that buyers of copper products have the option of using their own vehicles for transportation of copper products from the manufacturers’ warehouse/ go-downs/ depots. With respect to allegations on exchange of pricing information, customer allocation and bid-rigging, the CCI noted that the complainant failed to file any reliable source of information or documents indicating contacts among Hindalco and Vedanta to substantiate the allegations. Particularly, with respect to the unsubstantiated allegation of bid rigging, the CCI observed that the regulatory resources have to be optimally deployed so as to prioritise the enforcement task.

Accordingly, the CCI passed a closure order under Section 26(2) of the Competition Act.

 

[1] Case No. 18 of 2020, Order dated 8 October 2020

Published In:Inter Alia Special Edititon - Competition Law - November 2020 [ English
Date: November 13, 2020