India’s competition body shares news of tyre maker cartel

Yesterday the Competition Commission of India (CCI) finally made public the news that back in 2018 it found five tyre makers and India’s tyre industry association guilty of contravening the provisions of India’s Competition Act by indulging in cartel activities in 2011 and 2012. All protagonists have been fined for their actions.

According to the CCI’s final order of 31 August 2018, Apollo Tyres Ltd., MRF Ltd., CEAT Ltd., JK Tyre and Industries Ltd., Birla Tyres Ltd., as well as industry organisation the Automotive Tyre Manufacturers Association (ATMA), acted together to increase the prices of aftermarket cross-ply tyres and to limit and control production and supply of these products. Although the CCI made its order more than three years ago, MRF petitioned the Madras High Court to have the order sealed, a decision that was dismissed on 6 January 2022.

The CCI imposed penalties of Rs 4.26 billion (£42.0 million) on Apollo Tyres, Rs 6.22 billion (£61.3 million) on MRF, Rs 2.52 billion (£24.8 million) on Ceat, Rs 3.10 billion (£30.6 million) on JK Tyre and Rs 1.78 billion (£17.5 million) on Birla and issued a cease-and-desist order to each tyre maker. It fined the ATMA Rs 840 million (£8.3 million) and directed the association to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise.

The CCI also reports that “certain individuals of the aforesaid tyre companies and ATMA” were held liable for the anticompetitive conduct of their respective companies or association.

Tyre makers challenge CCI findings

In a letter dated 3 February, Apollo Tyres Ltd. writes that it “does not agree with the findings of the Commission” and will “take necessary steps to appeal against the order.”

Birla Tyres expresses a belief that “on merits it has sufficient grounds for an appeal.”

Ceat Limited states that “there has been no wrongdoing on the part of Ceat” and the tyre maker wishes to “reassure all the stakeholders that Ceat has never indulged in or was part of any cartel or undertook any anti-competitive practices.”

“We strongly reiterate that there has been no wrongdoing on the part of JK Tyre & Industries Ltd.” writes the tyre maker, adding that it wants “to reassure all the stakeholders that the company has never indulged in or was part of any cartel or undertook any anti-competitive practices.” JK Tyre is currently evaluating its legal options.

MRF Limited says it has been advised that “the order of the Commission is not based on a proper appreciation of facts and law” and it will “accordingly take appropriate legal recourse in this matter.” The company reassures all its stakeholders that it “follows high standards of governance in its business practices.”