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mrf: Fine on tyre companies: Supreme Court seeks CCI’s reply on MRF plea

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The Supreme Court on Monday sought response from the Competition Commission of India (CCI) on an appeal by tyre maker MRF Ltd challenging the National Company Law Appellate Tribunal’s December order asking the antitrust watchdog to reconsider and re-calculate the fine it imposed on tyre companies for alleged cartelisation and price manipulation.

The CCI had, in August 2018, imposed penalties totalling more than ₹1,788 crore on the tyre companies and also asked them to cease and desist from indulging in unfair business practices.

A bench led by Justice Sanjiv Khanna issued notice to the CCI and also tagged the MRF’s appeal with that of the CCI’s. In April, the top court, while hearing the CCI’s appeal, had refused to stay the appellate tribunal’s order.

The NCLAT, on appeal by the tyre manufacturers, had directed the CCI to pass a fresh order citing the need to re-examine arithmetical and inadvertent errors as well as to review the penalty to save the domestic tyre industry. The appellate tribunal had said that the promotion of domestic industry is also to be kept in mind by the watchdog as the objects of the Competition Act require to keep in view the economic development of the country. The CCI had imposed penalties of ₹425.53 crore on Apollo Tyres, ₹622.09 crore on MRF Ltd, ₹252.16 crore on CEAT Ltd, ₹309.95 crore on JK Tyre and₹ 178.33 crore on Birla Tyres. A fine of ₹8.4 lakh was imposed on the Automotive Tyre Manufacturers Association (ATMA) and it was directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise. The regulator had found that tyre manufacturers had exchanged price-sensitive data among themselves through the ATMA’s platform and had taken collective decisions on the prices of tyres.

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