The Competition Commission of India (CCI) on February 2 imposed a fine on 5 tire companies involved in factionalism. These 5 companies include MRF, Apollo Tyres, Birla Tyres, JK Tires and CEAT. CCI has imposed a total penalty of Rs 1788.06 crore on these companies. Due to this, there was a slight decline in the tire companies in the stock market on Thursday morning.
On February 3, at 10.30 am, CEAT shares were trading down 0.75% at Rs 1087.05. Shares of JK Tires was trading down 1.72% at Rs 133.95. Apollo Tires share price is trading down 0.16% at Rs 225. Birla Tires shares are trading 3.08% down at Rs 25.20. However, MRF shares were trading 0.25% higher at Rs 71,640.
CCI said that Apollo Tires Rs 425.53 crore, MRF Ltd. Rs. 622.09 crore, CEAT Ltd. Rs. 252.16 crore, JK Tire Rs. 309.95 crore and Birla Tyres. (Birla Tyres) has been fined Rs 178.33 crore.
“These tire companies shared price sensitive data among themselves through one of their tire associations, the Automotive Tire Manufacturers Association (ATMA) and based on that the tire prices were collectively fixed,” the CCI said.
The CCI said that these five tire companies and ATMA have been held guilty of violating the provisions of Section 3 of the Competition Act. This section is related to agreements between companies to eliminate competition through factionalism. Apart from tire companies, a fine of Rs 0.084 crore has also been imposed on ATMA.
CCI slaps ₹1,788 crore fine on 5 tire companies including Apollo and MRF, alleging ‘factionalism’
“The Commission also observed that the ATMA collected data on production, domestic sales and exports of tires on a company basis and segment basis and shared it with these companies,” the CCI said.
“ATMA has been directed to dissociate itself from collecting the wholesale and retail data relating to the sale of tires through its member tire companies or in any other manner,” the CCI said.
It is also necessary to mention here that CCI had given this order against these five tire companies and ATMA in August 2018. But the tire companies decided to go to court against this decision, due to which it was kept sealed since then. The Supreme Court dismissed the petition of tire companies on January 28, after which the CCI has now issued this order.
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