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CCI penalises three leading Indian dry cell manufacturers for anti-competitive conduct

CCI penalises three leading Indian dry cell manufacturers for anti-competitive conduct

India Blooms News Service | @indiablooms | 20 Apr 2018, 03:49 pm

New Delhi, Apr 20 (IBNS): The Competition Commission of India (CCI) imposed penalty on three leading Indian zinc-carbon dry cell battery manufacturers for colluding to fix prices of zinc-carbon dry cell battery in India.

The companies penalised are Eveready Industries India Ltd. (Eveready), Indo National Ltd (Nippo), Panasonic Energy India Co. Ltd. (Panasonic) and their association AIDCM (Association of Indian Dry Cell Manufacturers).

The CCI in its release said that it invoked the provisions of Section 46 of the Competition Act, 2002 ('the Act’) read with the Competition Commission of India (Lesser Penalty) Regulations, 2009 (‘Lesser Penalty Regulations’) to reduce the penalty imposed upon Panasonic, Eveready and Nippo by 100 per cent, 30 per cent and 20 per cent, respectively.

The case against these battery manufacturers was taken up by CCI suo motu under Section 19 of the Act based on the disclosure by Panasonic under Section 46 of the Act read with the Lesser Penalty Regulations.

During investigation, DG in exercise of the powers vested with it under Section 41(3) of the Act carried out simultaneous search and seizure operations at the premises of Eveready, Nippo and Panasonic on August 23, 2016 and seized incriminating material and documents therefrom, the release said.

Subsequently, while the investigation was in progress and report from the DG was pending, Eveready and Nippo, approached CCI as lesser penalty applicants.

From the evidence collected in the case, CCI found that the three battery manufacturers, facilitated by AIDCM, had indulged in anti-competitive conduct of price coordination, limiting production/ supply as well as market allocation in contravention of the provisions of Section 3(3)(a), 3(3)(b) and 3(3)(c) read with Section 3(1) of the Act.

It was observed that the conduct was continuing from 2008, which is prior to May 20, 2009, the date on which Section 3 of the Act became enforceable, and up till August 23, 2016 i.e. the date of search and seizure operations by the DG.

Considering contravention of provisions of the Act, an amount of Rs 245.07 crores, Rs 52.82 crores and Rs 74.68 crores was computed as leviable penalty on three battery manufacturers i.e. Eveready, Nippo and Panasonic, respectively, in terms of proviso to Section 27 (b) of the Act.

While computing leviable penalty, CCI took into consideration all relevant factors including duration of cartel, industry conditions, etc. and decided to levy penalty on the three battery manufacturers at the rate of 1.25 times of their profit for each year from 2009-10 to 2016-17.

Also, penalty of Rs 1.85 lakh was levied on AIDCM at the rate of 10 per cent of average of its receipts for preceding three years.

Additionally, considering totality of facts and circumstances of the case, penalty leviable on individual officials/ office bearers of the three battery manufacturers and AIDCM was computed at the rate of 10 percent of the average of their income for preceding three years.

Keeping in view the stage at which the lesser penalty application was filed, co-operation extended in conjunction with the value addition provided in establishing the existence of cartel, CCI granted Panasonic and its individuals 100 percent reduction in the penalty than was otherwise leviable.

Eveready and Nippo, along with their individuals, were granted 30 and 20 per cent reduction in penalty,
respectively.

Pursuant to reduction, penalty imposed on Eveready was Rs 171.55 crores and on Nippo was Rs 42.26 crores

No penalty was imposed on Panasonic.