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Competition Commission of India cautions Container Trailer Operators in Cochin for anti-competitive conduct

The Competition Commission of India (Commission) has found the Cochin based Container Trailer Owners Coordination Committee (CTOCC) and its four participating associations,  to be in contravention of the provisions of the Competition Act, 2002 (the Act).

It was brought to the notice of the Commission that these associations, under the garb of ‘Turn System’, have indulged in unilateral fixation of prices through a reference filed by the Cochin Port Trust

It was alleged that, during the Turn System, the users and Container trailers were obliged to book services only through this centrally-controlled system and that CTOCC was restraining outside transporters from lifting the containers, which was impeding the ability of the users to hire trailers of their choice.

Following a detailed investigation by the Director-General (DG), the Commission has found that CTOCC, along with the participating associations have resorted to price fixing under the garb of the Turn System.

The charge was not satisfactorily rebutted by these associations, despite being given ample opportunity according to commission's official release.

Thus, the Commission held them to be in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act. However, on the allegation pertaining to limiting and restricting the provision of services under Section 3(3)(b) read with Section 3(1) of the Act, the Commission found the evidence to be insufficient to hold CTOCC or any of its participating associations responsible.

Through this order, the Commission has unequivocally clarified that though forming an association for furthering legitimate trade activities does not fall foul of the Act, transgressing the legitimate boundaries and indulging in anti-competitive activities does.

When trade associations are used as a platform to promote anti-competitive ends, it becomes necessary for the Commission to intervene, for penalising the anti-competitive conduct.

Further, the Commission also mentioned in its order that though ‘Turn System’ may have efficiency justification in a particular trade, no such efficiency or redeeming virtue was shown by CTOCC or any of its sub-associations in the present case.

The Commission has therefore held Container Trailer Operators Coordination Committee and four of its affiliate organisations be in contravention of the provisions of Section 3(3)(a) read with 3(1) of the Act.

Further, the Commission has also found 10 office-bearers of the Cooridnation committee and the four affiliates responsible under Section 48 of the Act, on account of the positions of responsibility held by them in these associations during the period of contravention.

Accordingly, the office-bearers have been directed to desist from indulging in the anti-competitive conduct found to be in contravention of the provisions of the Act. But considering certain mitigating factors, the Commission decided not to impose any monetary penalty on any of the parties, the release said.

Container trailer operators on Cochin port went on a wild cat strike last month seriously hampering the handling of containers in the port.

 


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